The U.S. electricity grid powered through a record-setting heat wave last week with an assist from demand response, an efficiency technique poised for broader use.
The heat wave pummeled large parts of the Eastern and Southern U.S. last week, causing a spike in peak-time demand from added air conditioning loads. Three grid operators, or regional transmission organizations (RTOs), set new records for the highest peak demand load, with the New York grid only slighting missing its peak.
Grid operators met soaring demand by ordering power from addition generators, called "peaker plants," which only operate a few days a year. But ratcheting down power demand across many locations, sometimes called a virtual power plant, is increasingly being used to maintain grid stability--and keep a cap on energy prices. Demand response provider EnerNoc today said it curtailed 1,230 megawatts of power through utilities across the U.S. last week, the most it has done yet.
"Over the last few years, it's become a bigger and bigger thing, and the technology has helped that," said Mike Wilczek, senior markets editor for North American power at Platts, an energy, petrochemicals, and metals information provider. "The combination of technology and the sophistication in how grid operators run the energy markets has allowed it."
Grid operator PJM, which operates from Illinois to Pennsylvania, last Friday called in between 2,000 and 3,000 megawatts of demand response to ensure it had adequate capacity to meet surging demand in the Mid-Atlantic region, said company representative Ray Dotter. A large power generator, such as a nuclear power plant, generates about 1,000 megawatts, or roughly enough to supply 1 million homes.
Rather than contact large energy users individually as they used, grid operators now work through third-party demand response companies, such as EnerNoc and Comverge. By participating in the voluntary programs, customers, who can be businesses or consumers, receive a payment or have reduced rates. Demand reductions can be automatic, such as adjusting lighting in a warehouse or changing the settings for an air conditioner.
On Friday, hourly demand forecasts pointed to pockets where there could be problems getting power to certain areas, Dotter said. At 10 in the morning, it contacted third-party demand response companies which aggregate thousands of users who agreed to cut back power usage during peak times and respond within two hours.
"What our operators said was to be certain that we have enough reserves, we were going to call in load management to give us a cushion, because we need a reserve for spikes, or if we lose generation," Dotter said. "It's one of the tools we use to manage the grid and the power supplies."
Demand response is just one reason that grid was able to weather the heat wave, explained Platts' Wilczek. The economic recession has resulted in flat power growth over the past couple of years, which made it easier to cope with peak demand.
Efficiency programs from utilities also helped keep a cap on power use. New York utility ConEdison removed 500 megawatts from the grid--the equivalent of a medium-size power plant--through its commercial demand response program. It also has efficiency incentives, such as free programmable thermostats, which can be operated over the Internet, for consumers with centralized air conditioners.
Not all demand response programs worked out as well as hoped last week. Baltimore Gas and Electric has a PeakRewards program, where it can reduce load by dialing down consumers' air conditioner thermostats in exchange for annual credits worth $200 in the first year and then $100 per year. Making use of the voluntary program reduced 600 megawatts from the grid, which prevented blackouts or brownouts, BGE said.
But the utility admitted yesterday that it needs to review its procedures after people were left without air conditioners for several hours on Friday when temperatures hit 108 degrees, according to reports. BGE said it intends to improve communication, including potentially calling affected consumers. It's also investigating why the air conditioning cycling didn't restore cooling in about 30 minutes after the end of the emergency demand response event.
Even with this problem and isolated outages, the grid as a whole performed reliably in the area hit by the heat wave. Scaling back demand also reduces pollution and has the effect of dampening prices.
When grid operators call on peaker plants, the least expensive power generators are tapped first and, as demand grows, more expensive generators come online. Lowering peak demand means that those most expensive generators don't need to come online.
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Power prices did still go up. The wholesale power prices for peak hours from the mid to late afternoon were up from about $100 per megawatt-hour on Monday and Tuesday last week to almost $350 per megawatt-hour Thursday and Friday in parts of the East, according to the U.S. Energy Information Administration. Overall, though, the effect on prices was "mild" considering the extent of the heat wave, said Platts' Wilczek.
Although demand response is cost-effective, it is limited to those 100 hours or so a year where emergency reductions are needed, according to analysts. But its use is spreading among utilities and grid operators concerned with peak demand. PJM now has 11,000 megawatts of demand-side reductions available to tap into to ensure it has adequate capacity. In 2006, it had less than 2,000 megawatts available and by 2014, it expects to increase that number to more than 14,000 megawatts.
Last year, utility Constellation Energy bought demand response company CPower. While noting that it has been able to meet demand in the face of soaring heat, Midwest Independent Transmission System Operator (MISO) last week filed a proposal for a "permanent approach" to using demand response to keep the grid in balance.