Aggregator Perspective
Learnings from Integrating New Demand Response Mechanisms in California’s Energy Markets
Jennifer Chamberlin ‐ CPower
www.peakload.org
Who is CPower?
CPower is an energy management company.
We help businesses streamline how they use energy. We focus on demand response.
• Trusted Adviser: CPower is the largest DR‐focused CSP serving Utilities and C&I businesses
• Platform Strength: 3500 MW of curtailable load across 7000 sites
• Thought Leadership: Team of highly trained energy experts with decades of experience
• Customer First: Tools, wisdom, and support to help customers optimize DR + EE participation www.peakload.org
We can all learn from what is happening in CA
Source: Utility Dive
www.peakload.org
DR in CA – DRAM is born
• CA has chosen to integrate all event‐based DR into CAISO markets
• Piloting (transition to program) third‐party procured and managed DR via the Demand Response Auction Mechanism (DRAM)
• DRAM allows utilities to buy Resource Adequacy Capacity only
• Different than historical programs • In the past all programs were designed, managed and dispatched by the utilities with multiple event triggers
• DRAM provides program management and payment structures set by Aggregators –
not utilities
• Fully integrated into ISO markets with all other supply resources
• Dispatched economically www.peakload.org
DRAM evolution
• Pilot program – three phases
• 2016: ~42 MW • Delivering system and emergency resources now
• 2017: ~ 110 MW for delivery in calendar year 2017
• Expanded to offer local and flexible resources
• 2018‐19 filed for approval – RFO early 2017
Solicitations have been VERY successful! • All resource types may participate
• Pay as bid capacity – energy revenues from market activity
• Again only capacity is sold •
All dispatch rights remain with the aggregator through CAISO markets
www.peakload.org
DRAM product comparison ‐ reference
Parameter System RA Local RA Flexible RA
RDRR – Emergency Season January‐December Can be offered monthly
January‐December Can be offered monthly
January‐December Can be offered monthly
June‐September
October to May –
Offered annually
Resource Type
And Definition
PDR – 100 kW minimum –
per LSE per sublap
PDR or RDRR Must be in IOU local reliability area
PDR – 100 kW minimum per LSE per sublap
Capable of sustaining a minimum 3 hour ramp
RDRR – 500 kW minimum, per LSE per sublap
Test 1 Test for 2 hrs. Seller choice
Expand to 2 tests in 2018
1 Test for 2 hrs. Seller choice 1 Test for 2 hrs. Seller choice
Expand to 2 tests in 2018
Expand to 2 tests in 2018
One unannounced, called by CAISO
Notified as exceptional dispatch –
paid at market energy price
Availability Hours
1 to 6 PM summer
4 to 9 PM winter
1 to 6 PM summer
4 to 9 PM winter
12‐5 PM Summer
3‐8 PM Winter
Economic ‐ 1 to 6 PM summer
4 to 9 PM winter
Reliability – all hours
Monthly Limits
Limited to 3 consecutive (per CPUC RA Rules) days
24 hours/month
Limited (3) consecutive days
24 hours/month
Limited (3) consecutive days
24 hours/month
Max 15 events/48 hours per year
Notification Day Ahead and Real Time
(+/‐) 30 Minutes
Day Ahead and Real Time (+/‐) 30 Minutes
Day Ahead and Real Time
(+/‐) 30 Minutes
Day ahead
www.peakload.org
Parameter System RA
Local RA
Flexible RA
RDRR ‐ Emergency
Dispatch Trigger Single ‐ Economic; managed by aggregator
Economic – DA and RT
Can be called for local grid contingencies
Single ‐ Economic; managed by aggregator
Day Ahead economic bid – 95‐
100% of bid cap ($950‐1000)
Real Time – CAISO or local grid emergency/contingency
Curtailment Assets No Generation No Generation
No Generation
Auto DR desirable for timing Auto DR desirable for timing
Measurements
10 in 10 baseline with 20% day of adjustment
10 in 10 baseline with 20% day of adjustment
10 in 10 baseline with 20% day of 10 in 10 baseline with 20% day of adjustment
adjustment
Compensation
As Bid capacity Economic energy
As Bid capacity Economic energy
As Bid capacity Economic energy
Penalties
•
•
•
Reduced capacity if MOO •
not met
Market availability •
incentive if MOO doesn’t match supply plan
Uninstructed energy for •
real time variance
Reduced capacity if •
MOO not met
Market availability •
incentive if MOO doesn’t match supply plan
Uninstructed energy for •
real time variance
No Generation
Must be dispatchable by CAISO Automatic Dispatch system
As Bid capacity Economic DA Energy – $950‐1000
Clear Contingency energy at bid cap ($1000)
Reduced capacity if MOO •
not met
Market availability incentive •
if MOO doesn’t match supply plan
Uninstructed energy for real •
time variance
Reduced capacity if MOO not met
Market availability incentive if MOO doesn’t match supply plan
Penalty Energy at $1000/MWh
www.peakload.org
Not just DRAM: More load response opportunities
• Distributed BTM Storage procurements act as Demand Response
• Supply Side Pilots
• Aliso Canyon procurements
www.peakload.org
Lessons Learned And some challenges –
What do we need to do better to get this all right?
www.peakload.org
DRAM attracted many different participants
Along with a broad swath of technologies
www.peakload.org
Customer experience
• High customer engagement and satisfaction • Customers love(d) choice and control
• Economic bids gives customers greater flexibility and control
• Opportunity to look at all customer assets as a part of a load management strategy
• Challenges setting up PDR resources
• Limited MW in pilots meant some customers with smaller sites couldn’t participate
• Different “products” will need different customer baselines
• Not all customers are set up to be local or flexible resources
• “One size fits all” baseline approach is a challenge
• Can leave some customers out and others undercompensated for load drops
Load only works as a reliable resource if customers have a positive experience!
www.peakload.org
There are challenges
• Initial pricing may not be sustainable or truly indicative of cost to provide service
• Current auction mechanism called for “shots across the bow” – did bidders ‘buy’ an opportunity to play?
• ISO Integration and scheduling coordinator costs are significant – and not always factored in
• Telemetry and Metering can be challenges
• Fast response resources will need new less expensive solutions to become major market assets
www.peakload.org
And more challenges…
• Existing AutoDR systems • Not designed for faster (10 min and under) ramp‐down or ramp‐up
• Incentive programs need to keep up with market needs
• Systems are not static and take time to build out
• Regulatory lead times end up with “just in time” systems availability
• Registration hurdles, mid stream systems changes
• Data exchange and enrollment challenges • Can hamper success of getting resources into the markets
• Put pilot and RA success at risk
www.peakload.org
Looking ahead
• Testing new mechanisms – bi directional resources
• Contract cycles have to get longer
• Durable programs provide stability for customers, supplier and utilities
• Assist in planning and investment cues
• Supports technology and infrastructure investment
• Enrollment and data exchange are critical
• Distributed loads will play a critical role in grid resiliency
Customers are making investments in distributed resources – we want to harness them!
www.peakload.org