Prepared by the Center of Commercialization of Electric Technologies
Proven Technology. It is possible to successfully integrate many of today’s most advanced technologies for monitoring electricity usage, communicating with thermostats controlling air conditioner operation at homes, networking devices within homes, and controlling customer appliances through a voluntary residential demand response program. This pilot program has also demonstrated that demand response programs may be successfully implemented in an “unbundled” competitive electricity market where separate organizations are responsible for the various activities that must be coordinated in order to operate a voluntary demand response program.
KW Impacts. In curtailments called in the late summer and fall of 2008, an average demand reduction of 0.6 kW was estimated for participating homes in Dallas. The demand reduction that was achieved varied depending upon the curtailment strategy employed and customer-specific factors. Had Hurricane Ike and other delays not prevented the deployment of the program during the hottest period of the summer, and had more effective curtailment strategies been employed, we believe that an average demand reduction closer to 1 kW per home would have been attained.
Settlement Implications. Despite the fact that not all curtailment events for this pilot were timed to coincide with daily or seasonal demand peaks, comparison of averaged participant load shapes to the ERCOT load profiles for curtailment events showed that, during modeled curtailment events, participant energy use averaged between 1 and 2 kWh less than that predicted by the load profile. As load control and DR programs are brought to scale, the potential savings on marginal purchases on the balancing energy services market may become significant, particularly when curtailments are timed to coincide with periods of peak prices.
Demand Response in Off-peak Seasons. Given the importance of timing curtailment to periods of peak prices, it is important to note that many of the significant price spikes that have occurred in recent years in the ERCOT market have been due to constraints occurring in the fall and spring “shoulder” months. Because curtailments were called for this project in September and October, this study indicates that DR programs in Texas could provide additional value if market participants contract with participant customers not only for a certain number of summer peak hours, but also for additional hours in the shoulder months.
Market Effects. Had a “commercial-scale” demand response program been in effect during spikes in the price of balancing energy during the summer of 2008, wholesale prices could have been reduced by over 60% during the period of the spikes by enabling ERCOT to “slide down the bid stack”.