Demand response is allowing utilities to fundamentally rethink how they view the customer side of their business. e-terraDRBizNet gives utilities the ability either to reduce load temporarily, or to shift it to another time when supply is plentiful. In some cases, it completely changes the traditional relationship utilities have with customers, who can now be paid incentives for being flexible about when they use power.
Alstom is deploying e-terraDRBizNet at utilities to enable large-scale demand response programmes that reduce energy costs and improve grid reliability. It supports the continued growth of renewable energy resources by giving utilities more control over load to better match the avail-ability of supply. DR is a key component of Alstom’s smart grid solutions.
The US regional transmission organisation PJM Interconnection is the largest grid operator and electricity market in the world (after China), with a system load of over 150,000 MW during summer peaks.
It was an early adopter of demand response as an alternative way to manage seasonal capacity and emergency reserve needs. Since it started working with e-terraDRBizNet in 2008, its demand response portfolio has grown to over 15,000 MW, or
roughly 10 % of its system load. e-terraDRBizNet helps PJM manage its 6 different programmes – each with different participation rules and incentive structures. During a heat wave in July 2012, it had an unusually high system load of 155,000 MW, with 6,000 MW of generation offline. Demand response helped PJM in 2 ways. First, a large number of customers voluntarily participated in demand response in exchange for being paid the spot price for the energy, just like generators. This reduced system load by
over 1,000 MW, which was enough to suppress skyrocketing energy spot prices. Second, operators called on their emergency reserve demand response customers to deliver another 1,500 MW in one of their highly congested transmission areas. This allowed them to avoid more serious frequency problems or involuntary customer interruptions. Demand response is now a $500 million market at PJM. There are over 1 million end-customers participating directly and indirectly – everything from industrial manufacturers to shopping malls to homeowners. But all customers in the PJM service territory benefit in the form of lower electricity prices, more reliable supply, and reduced environmental impact compared with building new fossil fuel generators or transmission lines.