FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy...
California: Mandating Demand Response
California’s load-management experience argues for formal DR standards
proceeds, stakeholders have a chance to help California achieve even greater DR goals.
1. These projections are in addition to the current peak reductions achieved through reliability-triggered demand response.
2. Much higher responses are possible in specific facilities that have time-flexible production processes, energy storage systems and back-up generation. Since these are highly facility-specific, they have not been included in our estimate of technical potential.
3. These turbines come in sizes generally ranging from 50 MW to 100 MW.
4. In R.02-06-001, the CPUC specified a value of $85/kW-year. That value is widely accepted throughout the mainland United States. However, once the revenue stream associated with energy sales from the operation of the turbine is subtracted, a value of $52/kW-year is obtained.
5. Sam Newell and Frank Felder, “Quantifying Demand Response Benefits in PJM,” Study Report Prepared for PJM Interconnection, LLC and the Mid-Atlantic Distributed Resources Initiative (MADRI), Jan. 29, 2007.
6. As proposed by PG&E.
7. Note that this estimate assumes that these benefits will accrue over a 20-year period during which all residential customers have PCTs installed in their homes. There would be an initial period during which the PCTs would need to be rolled out to customers.
8. Note that some of the figures may not add up due to rounding.