[BETA] Fortnightly

Demand Response: An Overview of Enabling Technologies

 

Oak Ridge National Laboratory engineers say residential and commercial customers must bear the true price of power, through new technologies, for electric competition to work.

Recent electricity price spikes in California are a painful example of how customers are overly impacted by the changing electricity markets. Unfortunately, these customers have little or no control over the electricity market. In general, the present U.S. electricity markets are not typical by any standard, at least not for small customers. While both homeowners and small businesses freely shop around for many commodities and buy items on sale or at quantity discount prices, this has not been possible in the case of electricity. And why not? If the markets were open, available on a "real-time" basis, and users could avoid blindly purchasing during price spikes, it would not only benefit them financially, it would greatly reduce the spiking and improve the availability of electricity. Allowing customers to actively manage/change their loads in response to system conditions might be thought of as the ultimate reliability resource.

Customers presently do not experience directly the time-varying costs of their consumption choices. While electricity suppliers may be riding a wild roller coaster of rapidly changing prices, the customers may see only a fixed rate that rarely increases. Consequently, they have no incentive to modify their choices in ways that might lower their bill, enhance reliability, or improve the efficiency of the markets in which electricity is traded. Even if they were not so thoroughly isolated from the gyrating price swings, they would need additional tools such as, (1) a communications link to inform them of real-time prices, (2) accurate metering, and (3) a control system that facilitates either manual or automatic modification of their consumption. Drawing from a recent study, ¹ much of this article will describe these technologies.

If a large aluminum smelter can drop 100 megawatts (MW) of load in an afternoon when price spiking exists and save over $50,000, clearly there must be some attractive potential savings for small businesses and homeowners. In a future market, hotel managers could have a control system programmed to monitor the Internet for market spikes and shut down water heaters and air conditioners in selected rooms (i.e., unoccupied and/ or occupied and time-of-day dependent), and homeowners could shut off the hot water heater, turn down the air conditioning, and turn off the pool pump for a few hours.

Load as a Resource:
Can Energy Shortages Really Be Made Up Through Customers?

Power companies need help from the customers whether they know it or not. Many companies have come to acknowledge this out of desperation and others may simply succumb to changing market forces. Ancillary services include a wide array of load reduction, power generation, and power quality improving actions. Ancillary services can be provided by electricity customers to the power companies and are of monetary interest to the power companies or, to be precise, they should be of interest. For the sake of argument, let us assume that the difficult issues (i.e., barriers)