PJM©2009PJM Confidential

Demand Response in the PJM Synchronized Reserve Market: Experience and Prospects

Andrew Ott Senior Vice President – Markets May 21, 2009

PJM©20092PJM Confidential538840

Ancillary Services

• Regulation - a automated response service that resources offer to provide fine tuning for power balance that is necessary for effective system frequency control

• Synchronzed Reserve – quick response service that resources offer to maintain grid reliability during system events (i.e. large generator trip or low Area Control Error)

PJM©20093PJM Confidential538840

Energy is Co-optimized with Regulation and Synchronized Reserve in Unit Dispatch Software

Unit MW & Regulating Capability

Resource Instructions/AssignmentsDispatch

InstructionsSync. Res. / Reg. Assignments

EMSUDS

Dispatch,Sync. Res.,RegulationSignal

Markets Database

ResourceOwner

State Estimator Solution

DMT

DMT=Dispatcher Management Tool

UDS =Unit Dispatch System

EMS=Energy Management System

Web Interface

Settlement Database

Bids / Offers Assignments

PJM©20094PJM Confidential538840

Resource Dispatch in Real-time Operations

PJM generates dispatch Signal, synchronized reserve

assignment and regulation signal

GenerationOperation

CenterGeneration Operation

Center

Curtailment Service Provider

GenUnit

GenUnit

GenUnit

GenUnit

GenUnit

Flex. Load

Flex. Load

Unit Dispatch Instructions

Unit Dispatch Instructions

Load Dispatch Instructions

Response Total MW Spin and regulation

Response Total MW Spin and regulation

Response Total MW Spin and regulation

PJM©20095PJM Confidential538840

Demand Response Participation in Ancillary Service Markets

• Examples of Customer Response to provide synchronized reserve

Industrials – required more automated controls on production lines and processes Hospitals – installed control systems on backup facilities and integrated them with building control systemUniversities – Installed more advanced building control systems, also installed integration technology for building control systems to manage demand across multiple buildings

PJM©20096PJM Confidential538840

Participating Resources

Generation• Steam• Hydro• CT• Nuclear• Landfill• Other• Wind

Demand Side Response• Business Services• Chemical• College/University• Foodservice• Hospital• Manufacturing• Metalworks• Nursing Home

• Pharmaceuticals• Recreational• Scrap Metal• Stone/Cement• Telecommunications• Tools/Machinist• Waste Management• Water Utility

PJM©20097PJM Confidential538840

0

100

200

300

400

500

2006 2007 2008

116 129

410

MW Certified Maximum MW offered in single hour

Demand Resources Certified as Synchronized Reserve

As of December, 2008 the Market had 81 Active Registered DR Participants, some of these have multiple sites

PJM©20098PJM Confidential538840

Demand Side Response as Synchronized Reserve

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Aug-

06

Sep-

06

Oct

-06

Nov-

06

Dec

-06

Jan-

07

Feb-

07

Mar

-07

Apr-0

7

May

-07

Jun-

07

Jul-0

7

Aug-

07

Sep-

07

Oct

-07

Nov-

07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr-0

8

May

-08

Jun-

08

Jul-0

8

Aug-

08

Sep-

08

Oct

-08

Nov-

08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

MW

H Cl

eare

d

Dolla

rs

DSR Participation in PJM Synchronized Reserve Markets

Total Payments MWh Cleared

PJM©20099PJM Confidential538840

Synchronous Reserve Event Participation 10+Min Events, 2002 - Present

Generators Demand Side Response

PJM©2009PJM Confidential

Mid-Atlantic Grid Interactive Car Consortium Demonstration Project

• Mid-Atlantic Grid Interactive Car Consortium (MAGICC) – electric companies, research institutes, and vehicle manufacturers

• Over one year experience with the MAGICC battery electric vehicle responding to the PJM regulation signal

10

PJM©200911PJM Confidential538840

AES grid-scale energy storage system

Operational Details• Altairnano, Inc – Lithium Ion nano titanate battery

• Energy: 300 kWh• Efficiency: 90% round trip

• Power: 1 MW for 15 minutes • Usable Charge Range: 5% - 99%

Ancillary Services Unit

Powered by:

Delivering grid stability…

Hosted by:

PJM©200912PJM Confidential538840

Findings: RTO REG signal does not take full advantage of the capability of the resource

PJM©200913PJM Confidential538840

PJM proposed modified REG signaling should allow for very high service rate from limited energy resources

RTO REG RTO ACE EAST REG Modified

Consistently net negative (with long durations in one direction) which fill or drain the battery

Very balanced and could make a great signal for limited energy resources

A PJM proposed, frequency focused, REG nearly as balanced as pure ACE

Performance:Model: 52%Actual: 52%

Performance:Model: 92%Actual: Not available for test

Performance:Model: 93%Actual: TBD