Demand Response Programs

Various DR Programs

For the sake of simplicity, we will focus on the more popular Curtailment Service Provider offered Demand Response programs. There are essentially four types of programs available that offer secondary revenue streams. Additionally, the way in which FADRS^® offers the ability to save money 24/7 by significantly reducing daily energy use allows the end user to experience dramatic savings. Which programs are offered in a region will vary, as will the name of the program, the requirements and the compensation for participation.

Capacity

In the Northeast, many Aggregators offer a DR Capacity where within ~2 hours' notice, the end users are asked to curtail electric usage once or twice a year on average. This curtailment period typically lasts approximately 2 hours, although it can be as long as 6 hours. Currently the financial incentive to the end users is approximately $25,000 - $100,000 per Megawatt (MW) per year.

Synchronous Reserves

Although most ISO's offer these programs, only a few CSPs also offer a Synchronous Reserves DR program that requires end users to curtail electric load with 10 minutes advance notice, for a duration of about 10 minutes. Most facilities are not able to participate in such a program without a Fully Automated Demand Response and Reduction System like FADRS™. Currently the financial incentive to the end users is an additional $35,000 per Megawatt per year. In ERCOT (Electric Reliability Council of Texas) there are two programs available that fall under this heading and pay a bit more.

Real-time Pricing and Day Ahead

These DR programs offered in many regions allow the end user to adjust their electric consumption based on the cost of electricity. These DR events typically require a 5 minute response and last just one (1) hour. They are totally market driven programs but it is not unusual for the end user to generate an additional $30,000 per MW per year.

Frequency Regulation

As renewable electric generation such as wind and solar continue to be deployed, the electric grids throughout the world are forced to adapt their operations. These renewable technologies are intermittent generators, meaning they cannot generate constant electricity. Every time a cloud gets between a solar array and the sun, its production drops, and then picks up again once the cloud passes, the same happens with wind farms when winds die down. This poses a special kind of problem for grid operators like the PJM Interconnection, a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

Organizations like PJM are mandated by FERC (Federal Energy Regulatory Commission) to maintain 60hz ± 1Hz as the frequency for transmission of electricity throughout their grid. When the supply of electricity and the demand for electricity are the same, this is a relatively easy task, but this rarely happens. If supply exceeds demand, the frequency will begin to rise over the 60hz, and if supply falls below demand, then the frequency in the grid will fall below the 60hz. This opens the grid up to significant fines, but can also cause significant damage to equipment connected to the grid including computers, motors and more.

Historically, as demand for energy increased, the gird would basically throttle up the generation plants and as it went down, they would reduce generation. However, as wind and solar started to become more prevalent and a larger portion of the generation pool, the grid operator is forced to now watch both sides of the equation (supply generation and consumption demand) and adjust the traditional generation plants to not only meet demand, but to adjust for fluctuations of solar and wind farm production.

The complexity of making these adjustments has caused the grid operators to be able to adjust for small changes in supply and to accommodate this, they have opened up Frequency Regulation Programs. For the last 11.5 years, the PJM has paid polluting and inefficient "Peaker" power plants to help them with this effort by the are inaccurate (57% score) and very slow responders (Every 10 minutes or so). That ends up resulting in great air pollution and higher utility rates for the ratepayer. FERC has come up with Order No. 755 (October 2011) to now pay for Frequency Regulation based on performance. FADRS^® Frequency Regulation has the highest score in the nation (100% every 4 seconds without any air pollution using Advanced Battery Storage) meaning FADRS^® clients now have the ability to collect the highest incentives of up to $550,000 - $800,000 per MW per year.

With the introduction of the Fully Automated Demand Response/Reduction System (FADRS^®), this game changing technology is now available to a significantly larger group of facilities, and from office buildings that can utilize Variable Speed Drives on HVAC systems, to Hospitals, university and corporate campuses, Hospitality, manufacturing plants, etc. By adjusting up and down the amount of energy being taken from the grid every 4 seconds, the facility can participate in the program.

FADRS® can utilize systems already in place, or work with the facility to install new systems that can not only make a facility more energy efficient, but rather than just saving money, can provide a way turn those energy consuming assets into revenue generating assets.

Although not necessary, a great application would be to use Solar PV and/or Wind Turbines in conjunction with Advanced Energy Storage and FADRS^® Frequency Regulation.