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ISO New England – Results of
Ancillary Service Pilot Programs:
Jon Lowell and Henry Yoshimura
ISO New England
October 25-26, 2011
• Alternative Technology Regulation Pilot Program
• Demand Response Reserves Pilot Program
Alternative Technology Regulation Pilot
Program • Why?
– Stakeholder request
– Low risk opportunity to evaluate new
technologies
– Allow new technologies to experience realistic
operation
– Minimal impact on the existing regulation
market
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• What?
– Limited to 13 MW total to ensure no threat to reliability
– Incremental to existing regulation market
– Participants operate as “price-takers”
– Will continue until permanent market changes are approved and implemented
• When?
– Commenced 11/2008; closed to new entrants after 11/2009
• Expected to re-open Q2 2012
– Will continue until permanent market changes are approved and implemented
Principal Issues
• Can these new technologies perform as advertised? – So far, the answer is yes
• What issues have been identified? – Managing state-of-charge for storage resources with limited energy storage (i.e.
less than 2 hours)
– Cost-effective metering and communications for geographically dispersed
resources (electric vehicles, demand response)
• Benefits of “fast response” vs. “sustained response” – AGC dispatch sends new set points every 4 seconds
– Many/most of the new technologies can move from top to bottom of their
regulating range within a single 4-second cycle
– NERC compliance criteria based on 15-minute intervals
• “Fast” is better than “slow”, but: – Faster response is unlikely to reduce noncompliance risk
– Might allow reduced regulation requirement
– Current New England requirement is ~65MW for a 28,000 MW summer peak
system.
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Impact of Response Rate
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0
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1,000,000
2,000,000
3,000,000
4,000,000
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<3 3-5 6-10 11-20 >20
$/m
ile o
r $
/MW
of
Cap
pe
r h
ou
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An
nu
al M
ileag
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r A
nn
ual
Co
st
Response Rate MW/min
ISO New England Regulation Market - 2010
Mileage
Payment
Payment/Mile
Pmt / MW of Delvd Reg Cap
Factors Affecting Regulation Market
Economics
• Late-2005 – implemented service payment and
separated resource-specific
opportunity costs from the
Regulation Clearing Price
• Early-2007 – Bidders fully adjusted to market
design
– minor improvements in selection
algorithm
• 2009 – Reduction in requirements
– Lower gas prices reduced
opportunity costs
• Future? – Uniform clearing price
– New technologies
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2005 2006 2007 2008 2009 2010
Re
g P
mts
$m
Re
g R
eq
m M
W
Regulation Market
Reg Requirement MW Reg Pmts to Resources
Pilot Program – Interested Technologies
• Currently participating – Flywheels
– Residential electric thermal storage
• Qualified to participate, but not online – NaS batteries
– Commercial/industrial load control
– HVDC power electronics
• Expressions of Interest – Lithium-ion batteries
– Electric vehicles
– Buoyancy energy storage
– Wind-powered microgrid
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Where Are We Heading?
• ISO-NE is moving to eliminate the “pilot” status and allow full
participation of these new technologies in the regulation market – Timing mostly depends on scope of forthcoming rules related to FERC’s
February 2011 Regulation NOPR
• May preserve the Pilot Program infrastructure as a technology
sandbox – Innovation doesn’t occur on schedule
– Will shorten or avoid delays related to stakeholder and regulatory
processes
• Develop cost-effective approaches to metering and settlement
to accommodate geographically dispersed “smart-grid”
applications – Expensive solutions will be a significant barrier to entry
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ISO-NE’s Regulation Market - Design
Improvement Goals
• Uniform clearing price that incorporates opportunity costs
of the marginal resource
• Cost-effectively integrating limited energy storage
resource
• Cost-effectively integrating geographically dispersed,
aggregated resources – Examples: vehicle-to-grid, demand-response
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Demand Response in Reserve Markets
• Demand Response is currently not eligible to provide
reserves to the wholesale electric system
– Dispatchable demands are eligible to provide reserves
• Demand Response Reserves Pilot started in 2006
• 50 MW test over a multi-year period to demonstrate
performance during reserve activation events
• Can Demand Response provide a product similar to 10
and 30-minute spinning and non-spinning reserves?
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Participating Asset Types
• Load Reduction – The most common load reduction technology/strategy included
lighting and HVAC usage
– Asset performance was assessed by comparing actual metered
load during an event to an asset-specific estimated baseline
• Behind-the-Meter Generation – Asset performance assessed solely on the metered generation at
the time of an event
• Direct Load Control – Centralized control of a specific end-use across a large number
of small customers – e.g., residential air conditioner curtailment
– Asset performance was assessed by comparing actual metered
load during an event to a control group
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Participating Industries
• Grocery Stores
• Manufacturing
• Large Retail
• Education Sector
• Wastewater Treatment Facilities
• Aggregated Air Conditioning Curtailment
• Behind-the-Meter Generators (regardless of their industry
of origin)
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Demand Response Reserves Pilot Summary
• Pilot ran from October 2006
to May 2010
– Asset types include load
reductions, Behind the Meter
Generation, direct load
control (i.e. aggregated air
conditioner curtailment)
• 109 assets participated in at
least one season; 35 assets
participated in all seasons
– Assets enrolled in six
seasons; 26.4 MW per
season on average
– 107 events
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0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
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/16
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/22
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/13
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/26
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/30
/20
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/08
/20
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/22
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/05
/20
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/25
/20
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/07
/20
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/13
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/15
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/05
/20
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/26
/20
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/06
/20
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/29
/20
07
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/28
/20
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/22
/20
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/29
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/26
/20
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/17
/20
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05
/01
/20
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/12
/20
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/23
/20
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/02
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/16
/20
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07
/28
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/12
/20
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/02
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/17
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/03
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/25
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/07
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/28
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/07
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/27
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/17
/20
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Total Load Relief as Percent of DRR Contract Amount (Mean MW) Session Average Linear Trend
DR Reserve Pilot Performance
Comparing the Performance of Pilot Program
Assets and Generation Resources
• Participating pilot program assets showed less reliability
than generation resources (i.e., in-front of meter
generators)
• In-front-of-the-meter generation resources showed a
moderate increase in reliability since the pilot program
started, while pilot program assets showed a decrease in
reliability during the same time frame
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Recommendations for Further Research
• Investigate / implement: – Performance erosion
– Audit day behavior
– Weather-based performance metrics
– Penalties for over-performance
– Tools to assist asset providers to set goals and
maintain performance
– Change rules regarding re-submission of data
– Special metering requirements for behind-the-meter
generation assets
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