Aug 03 2009

Piloting the Future of Energy Management

Posted by: Jonathan Marshall

What kind of magic would it take to convert millions of air conditioners into a cleaner, cheaper equivalent of gas-fired power plants? The magic envisioned in two automated "demand response" pilot projects that PG&E launched last week.

The basic idea is simple. Every electric utility must balance supply and demand on a minute-by-minute basis to prevent instability and power outages. Traditionally, power companies relied on fossil-fueled plants that could ramp generation up or down as needed to match the rise and fall of demand and the ups and downs of wind and solar power. These specialized plants are expensive (because they remain idle most of the time) and polluting (because they burn natural gas or coal).

In recent years, more and more utilities have experimented with "demand response" programs, which provide customers with incentives to curb usage during periods of peak demand, typically hot summer afternoons. While these programs help prevent grid overload, they generally aren't designed to replace combustion turbine plants for fine balancing of supply and demand.

That's about to change--and when it does, utilities and their customers stand to reap big rewards. "Demand response is clearly the 'killer application' for the smart grid," said FERC Commissioner Jon Wellinghoff last December. A report by the North American Electric Reliability Corporation (NERC) added, "Growing use of these (demand-side) resources to meet daily capacity requirements, as well as their critical role in supporting the integration of variable renewable resources, will only increase their importance as climate change initiatives progress."

On July 29, PG&E began a pilot program with large commercial and industrial customers to test the ability of automated demand response systems--which use high-speed communications networks to signal customer energy management devices to adjust air conditioning, lighting and other loads--to act reliably enough to help manage day-to-day grid operations.  If so, customers could actually earn money for this valuable contribution to the state's electrical system.

In parallel, PG&E plans to test whether residential and small commercial customers can play in the same market by enrolling in the SmartAC program. This voluntary program provides customers with free radio-controlled thermostats or A/C switches that can be signalled to slightly reduce the amount of electricity air conditioners use during periods of peak energy demand, without sacrificing customers' comfort.

Currently, PG&E has amost 120,000 small business and residential customers actively participating in the program, translating into a total load of more than 87 MW.

PG&E has nearly finished recruiting two groups of 400 SmartAC customers in separate hot inland areas to test the feasibility of using the program as a kind of "spinning reserves," the capacity of traditional generation plants to step up output on a minute's notice.

The key question is whether PG&E's signals to customer thermostats can trigger a quick, reliable, and definable change in demand, or if the system is too sloppy for fine-tuned control. The pilot team also hopes to learn what kinds of communications networks work most reliably for such a task--for example, wireless paging networks or the Internet.

The success of these and other pilot projects will hasten the day, envisioned just last year by Rick Sergel, President & CEO of NERC, "when my home's electronics and appliances will automatically react to changes in price signals and wind forecasts on the grid, reducing my energy usage to help bring on more renewables and manage my bill. The innovation and technology to do this already exists. The challenge remains, then, for us to let it loose."

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