Prepared by the Center of Commercialization of Electric Technologies
Settle ERCOT Wholesale Prices on 15-Minute Intervals. Market participants level of interest in aggressively pursuing demand response may be determined by whether and how ERCOT decides to use 15-minute interval data for wholesale settlements. Rule 25.130 (h) established for ERCOT the objective of being able to use 15-minute interval data for this purpose by January 31, 2010, and ERCOT has been working for some time to establish the procedures that will allow them to accomplish this objective.
Deemed Savings or Stipulated Values for Use in ERCOT Settlement. A cost-effective and viable “interim solution” is needed while ERCOT’s settlement system is being enhanced and while TDSPs are developing and implementing their AMI deployment plans, so that DR program participants’ load shed during curtailment events may be better recognized. Such a solution could facilitate the development of residential demand response programs in the ERCOT market in the short term.
Establish a Preferred Method for Quantifying Savings. Even with advanced metering, quantifying savings requires a method to establish the counterfactual – what would have been consumed absent the curtailment event. In this pilot, savings were estimated according to two general methods: day-matching techniques and regression analysis. While each method has its advantages, in this pilot regression techniques were preferred, in part because this pilot was interested not only in estimating savings, but also in explaining the estimates. The inclusion of additional explanatory variables (e.g. temperature, hour of day) provides a greater level of understanding. However, day-matching methods may be more appropriate when estimating the savings associated with a specific individual event (e.g. for reporting).
Plan to Provide REPs and Curtailment Services Providers better information on market prices and appropriate times for deploying demand-side resources in the future. To maximize the value of investments in residential DR-enabling technology, market participants must be able to anticipate periods of peak prices. In the planned nodal wholesale market system, 15-minute advance price signals will not be provided. Any steps taken to provide advanced notice of wholesale prices in the nodal market would increase the future effectiveness of demand response efforts.
Expand Opportunities for Residential Demand Response. The value of residential demand response is not limited to the annual value of reduced generation purchases on the balancing energy services market. Currently, residential direct load control can participate in some programs, such as the Emergency Interruptible Load Service (EILS) program, but has limited ability to provide ancillary service, such as non-spinning reserves. Technological challenges would have to be overcome and revisions to protocols made, for residential DR resources to provide non-spinning reserves.
Promote “smart appliances” in Texas. Future opportunities for Residential Demand Response are likely to include direct load control programs like the CCET DR Pilot, but will also include the introduction of information (e.g. prices, real time power use) to households via the “Smart Grid,” with the advanced meter providing a gateway into the home and using home area networks for communication between appliances and devices in the home. Promotion of smart appliances that can communicate on a home area network (HAN) will increase consumers’ ability to manage their energy use and increase the loads available to DR programs.
Address the “Stranded Investment” Problem. Investments in customer-sited DR technology may be “lost” to the market when customers change retail provider or move out because the subsequent provider may not be able to communicate with the resource. PUCT Project #34610 is establishing business rules for access to HAN devices, which should address the information issue. Technological issues are also being addressed via continued development of standards in the communications protocols, including requirements that devices be tested by 3rd parties for interoperability.