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Current Sustainable/Renewable Energy Reports

01-06-2015 | Power Sector (E Martinot, Section Editor)

Current Practice and Thinking with Integrating Demand Response for Power System Flexibility in the Electricity Markets in the USA and Germany

Author: Benjamin Bayer

Published in: Current Sustainable/Renewable Energy Reports | Issue 2/2015

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Abstract

Regulators worldwide are aiming to increase system flexibility by leveraging the untapped potential of demand response. In this article we review and compare the literature on current practice and thinking about the role of demand response in three distinctly different markets that represent leading global examples of demand response: two regional electricity markets in the United States (PJM and ERCOT) and the national market in Germany. Furthermore, we describe the share of demand response in each market segment and the corresponding market design. We found, firstly, that interruptible loads and emergency generators (demand response) are used as a contingency reserve only, for no more than 30 h per year. Secondly, the share of demand response is about 4 % of the unforced capacity requirement (including emergency generators). Thirdly, the discussion of demand response also shows that there is a lot of uncertainty on how an appropriate level playing field between flexible resources should look in detail. Nevertheless, regulators are aiming to further enhance the reliability and competiveness of demand response programmes.

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Footnotes
1
PJM defines unforced capacity as follows: “Installed Capacity (ICAP) represents the maximum generating capacity of a given facility. Unforced Capacity (UCAP) represents the amount of ICAP that is actually available at any given time after discounting for time that the facility is unavailable due to outages such as repairs.” [9]
 
2
To determine the PLC, at the end of each year, the ISO calculates the hours with peak load for the year across the electricity market. The average electrical power consumption in these hours (taken from the electricity meter data) is then used to calculate the PLC. In PJM, five hourly values are used to calculate the PLC.
 
3
PJM uses the term Synchronized Reserve instead of Responsive Reserves and NERC uses the term Spinning Reserve [30].
 
4
The dispatch frequency and annual dispatch duration can vary significantly between years [41]. For example in 2012, positive tertiary reserve was used for 749 h in total, and the upper 50 % (ca. 1200 MW) was used for a total duration of 232 h.
 
5
The ancillary services market in Germany is a pay as bid market. The average capacity price of all accepted bids for positive tertiary was € 4700/MW per year.
 
Literature
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Hurley D, Peterson P, Whited M. Demand Response as a Power System Resource: Program Designs, Performance, and Lessons Learned in the United States. 2013. http://​www.​raponline.​org/​document/​download/​id/​6597. Accessed 4 Jun 2013. Comprehensive overview on the regulatory framework for demand response in the various US electricity markets.
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Ott A. Case Study: Demand-Response and Alternative Technologies in Electricity Markets. In: Jones LE, editor. Renewable energy integration: Practical management of variability, uncertainty and flexibility in power grids. London: Academic Press. p. 265–74. doi:10.​1016/​B978-0-12-407910-6.​00021-1. Good introduction about demand response participation in the electricity market of PJM.
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Metadata
Title
Current Practice and Thinking with Integrating Demand Response for Power System Flexibility in the Electricity Markets in the USA and Germany
Author
Benjamin Bayer
Publication date
01-06-2015
Publisher
Springer International Publishing
Published in
Current Sustainable/Renewable Energy Reports / Issue 2/2015
Electronic ISSN: 2196-3010
DOI
https://doi.org/10.1007/s40518-015-0028-7