Posts
There
seems to be an influx of policy these days focused around reducing energy
consumption and demand. One such policy is the Pennsylvania Public Utility
Commission Energy Efficiency and
Conservation Program or Act 129. So what
can utilities do today to meet these new policy requirements?
There are some simple techniques
to reduce consumption regardless of when the load occurs such as
weatherization, LED and
compact florescent light bulb replacement, energy star appliances,
high-efficiency HVAC equipment, etc. All
of these actions reduce electric consumption, reduce carbon footprint and lower
consumer bills.
Another way to meet these requirements
is by reducing peak demand which has the benefit of reducing the need for
generation and T&D capacity. Since
the last generation to be dispatched typically is the least efficient, there
are ties between energy efficiency and peak demand reduction. In addition to
the above benefits, energy efficiency does have the added benefit that if a
consumer load is 20% more efficient, generally that consumer's contribution to
peak demand will also be reduced by approximately 20% depending on the type of
loads and the energy efficiency improvements that are implemented.
For utilities without smart meters,
direct load control of air conditioners, hot water heaters, pool pumps, and other
loads that the utility can control have been around for at least two to three
decades. Peak demand reduction is
typically very important for co-ops and munis with power purchase agreements
that include a peak demand charge. Smart
meters enable more sophisticated load control programs based on time-of-use
rates, critical peak pricing rates, or providing pricing signals to home
automation systems with programmable, communications-enabled thermostats and
controllers for other loads. Peak demand
reduction does not necessarily reduce consumption, but it does shift
demand. EV charging infrastructure is a
good example of a demand response program to avoid having the charging of
electric vehicles contribute to system peak demand (there can also be local cluster
issues with EVs).
Volt/var optimization (VVO) is another
tool that can be used for both energy efficiency and peak demand
reduction. VVO is typically a two-step
process involving correction of power factor by offsetting inductive loads with
capacitor banks. Switching the capacitor
banks reduces reactive power losses and flattens the voltage profiles on the
utility feeders. This does two things -- it increases power delivery efficiency
by lowering the losses (which extrapolates to less generation capacity, less
fuel consumption, and lower carbon footprint) and the flatter voltage enables
conservation voltage reduction. With a
flatter voltage profile, utilities can lower the substation voltage at the
source end of the feeder without causing low-voltage problems for customers at
the far end of the feeder. Lower feeder
voltages reduce consumption (at least for constant impedance loads -- not the
same for constant power loads) which further improves energy efficiency. For utilities with rates based on kWhs as
measured at the meter, CVR also reduces revenue. Like the energy efficiency programs listed
above, conservation voltage reduction also reduces demand, including peak
demand.
Another example of utility energy
efficiency is to deploy low-loss distribution transformers or to implement a
transformer load management program (TLM) to make sure that distribution service
transformers are correctly sized to minimize losses based on individual
transformer load profiles. AMI data can
be analyzed when available to assess transformer loading. Transformers can also be monitored –
Power
Partners is launching an Intelligent
Distribution Transformer that can capture the necessary information.
One growing segment of the market is using
VVO as a grid tool to reduce peak demand.
OG&E is an example of this.
By rolling out VVO to 400 feeders, OG&E is on track to avoid building
an 80 MW peaking plant. The business
case is often stronger for utilities like OG&E which are vertically
integrated and can leverage avoided generation capacity costs. In de-regulated markets, I think that PUC
policy is required for T&D wires companies to implement VVO which has
societal benefits but does not necessarily help the bottom line of the wires
company. The ERCOT market in Texas is
de-regulated and ERCOT is asking the IOUs to look at VVO for grid-based demand
response given the Texas resource constraints -- the question is how will ERCOT
and the Texas PUC address compensation for the wires companies in Texas to
offset revenue impacts and infrastructure costs?
Regardless of policies like the one
listed above, our current resource constraints and the onslaught of coal plant
closures are driving the need to reduce energy consumption and demand. At least
with the breakthrough of smart grid technology, utilities have a choice in how
they are going to deal with the issue.
