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Green Transition

Integrating distributed resources into the smart grid.

Fortnightly Magazine - May 2011

the grid during high-cost peak demand periods. Customers with EVs will be prime candidates for becoming active participants in the grid. In addition to V2G’s ability to balance intermittent resources, it also will allow vehicle owners to maximize their economic welfare by charging their vehicles during low-cost, off-peak hours—then feeding stored energy back to the grid during high-cost, on-peak hours.

These transformational potentials can be harnessed the moment we install smart grid systems that enable the aggregation of a large number of small and large customers so they can actively participate in balancing supply-and demand in an interconnected network in real time.

All the various components and functionalities of an integrated smart grid system have large and small-scale companies driving them toward deployment in the marketplace.

A critical step for integrating demand response and distributed resources from all these different companies into a large regional grid marketplace is the deployment of a distributed resources management system or DRMS. DRMS integrates and coordinates the other technology components, creating an end-to-end solution for participation of distributed resources into wholesale energy markets. Without a workable DRMS, it wouldn’t be feasible to integrate millions of small distributed resources into wholesale markets.

With rapid advancements in software technology, market operators are now able to benefit from the participation of increasing numbers of customers, load aggregators and other intermediaries. FERC has taken the unusual step of actively promoting the rapid evolution of demand side resources, not just through public pronouncements, but more importantly, through published reports, studies, surveys as well as a number of orders. Over the past two years, FERC has published several seminal studies documenting the substantial potential for DR in the United States, 9 and has issued a number of orders prompting fundamental changes within organized U.S. electricity markets. 10

Responding to these initiatives, the PJM Interconnection, which operates the grid system for 13 states and the District of Columbia, has now implemented DRMS in several markets in its vast network, with immediate and impressive results. By aggregating the contribution of an estimated 1 million customers including some 10,000 large commercial and industrial users, PJM is reportedly able to effectively manage some 9,000 MW of load or roughly 7 percent of its system peak demand 11 ( Figure 6 ). The energy savings are equivalent to the output of seven nuclear power plants. These programs have grown significantly in the past few years, making PJM the national leader in facilitating the entry of demand-side resources.

Lessons from the past

Business as usual isn’t an option for the future. The status quo will lead to increased U.S. reliance on imported oil, increased energy vulnerabilities, increased energy insecurity, more economic woes, and more emissions of greenhouse gases and other pollution. The sooner we get off this dead-end path, the better for our country and her people. The rapid deployment of DRMS to facilitate the development of an intelligent grid is the key to change.

We need to move toward a more democratic and more sustainable energy future with higher reliance on domestic, clean and green renewable energy.