Market Participant Experiences with Demand Side Bidding

and Future Direction

Linda Roberts, EA Technology

Richard Formby, EA Technology

Overview of Presentation

The role of the IEA

Definition of DSB

Description of DSB products

Experiences with DSB

Developing DSB

The Role of the International Energy Agency (IEA)

To improve the world's energy supply and demand structure by developing alternative energy sources and increasing the efficiency of energy use

Stimulates the development and deployment of new energy technologies through a vast network of Implementing Agreements

IEA Implementing Agreement on Demand Side Management and

Technologies ‘Promoting Energy Efficiency and Demand-

Side Management for global sustainable development and for business opportunities'

Task II: Communications Technologies forDemand Side Management

Task VIII: Demand Side Bidding in aCompetitive Electricity Market

http://dsm.iea.org

What is Demand Side Bidding?Is it different to Demand Side Management?

DSB:Encouraging consumer flexibility for cost reduction

DSM:Encouraging load reduction or other long term changes to consumption

patterns

Market Driven Mostly Regulatory Driven Involves short-term

discrete actions

Shared control,monitoring andcommunicationstechnologies

Involves sustainable andpermanents changes todemand profile

Demand Side Bidding Products

Characteristics Category DSB ProductsDSB involving thebulk purchase ofelectricity

DSB for price setting Spot market Bilateral contracts Supply contracts

DSB to maintainquality of supply

Ancillary services(of various types)

DSB to solvenetwork constraints

Distribution constraints Transmission constraints

DSB for electricitybalancing

Balancing market

DSB requiringconsumers tochange theirelectricity demand

DSB for access tomarket prices

Spot markets

Time-Frame associated with Demand Side Bidding Categories

Months / days ahead trading Day ahead trading Within day trading

Time of delivery

Price setting

Access to market prices

Balancing market

Network constraints

Quality of supply

System Operator

Market Operator

Supplier TraderBroker

Balancing Market

generation

transmission distribution

end-use

BalancingBalancin

g

Ancillary Services Ancillary Services

ConstraintCon

stra

int

Bilateral Contract

BilateralContract

Supply Contract

Spot market trading

Spot markettrading

DSB and the market place

Experiences withDemand Side Bidding

Regulating power market Norway

Frequency response UK

Interruptible supply contracts fordomestic customers

Finland, Norway, UK

Fuel substitution Norway, Sweden

Standing reserve UK

Load management in refrigeratedwarehouses

New Zealand

Use of standby generators for peakprice avoidance

UK

Real time domestic loadmanagement

USA

Frequency response in the UK

Technical Rules– available load must be at least 3MW

– control must be instantaneous

– load must be available for up to 30 minutes

– consumer can specify times that load is available

Frequency Response

Aggregator

Cementproduction

Cementproduction

System Operator

0

5

10

15

20

25

49.5549.649.6549.749.75

Frequency relay trip setting

Num

ber

of t

rips

per

year

Cementproduction

Frequency ResponseArc Furnaces

0

20

40

60

80

100

120

140

160

180

0 12 24

MW

Frequency ResponseArc Furnaces

0

20

40

60

80

100

120

140

160

180

0 12 24

MW

Total arc furnace demand

100MW of firm load

Standing Reserve

15

20

25

30

35

40

45

50

00:0

0

01:3

0

03:0

0

04:3

0

06:0

0

07:3

0

09:0

0

10:3

0

12:0

0

13:3

0

15:0

0

16:3

0

18:0

0

19:3

0

21:0

0

22:3

0Time

Dem

and

(G

W)

Technical Rules– required within 20 minutes of receiving notification

– load control can be automatic or manual

– load must be available for up to 2 hours

– System Operator specifies ‘windows’ of service

F le x ib leG a te w a y

P e rs o nm o n ito r in g

R e m o teD ia g n o s t ic s

S e c u rity , F ire

E n e rg y D e m a n dB id d in g

E n e rg y M a n a g e m e n t

M e te r in g /D is a g g re g a t io n

C U S T O M E R S E R V IC E S A N D C O M M U N IC A T IO N B U S

In fo r m a t io n d is p la y /

S u p p lie r c h o ic e

C H PM a n a g e m e n t

P o w e rlin eR a d io

T P

~~

H e a tS to re

Communications for Demand Side Bidding

DSB and energy efficiency?

Does DSB involve a short-term reduction or increase in demand (kW)?

Is total energy(kWh) the same, increased or reduced?

What is effect on generating mix– does it avoid the use of inefficient generation?

Effect of generation mix on energy efficiency

0.35

0.4

0.45

0.5

0.55

0 4 8 12 16 20 24

Time

kg C

O2

per

kW

h d

eliv

ered

Weekday, December 1996

Conclusions

DSB enables consumers to become active participants in the electricity market

DSB has been successfully operating for a number of years

Need to explore ways of enabling more consumers to participate