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.