The PJM Interconnection faced
possibly the greatest reliability stress
of any independent system operator (ISO). This organization manages
interstate-grid operations, including
bulk electricity auctions and purchasing, for a service territory that includes
much of the Midwest and East Coast. The
extreme conditions created havoc with
operations, and the system only narrowly
avoided brownouts or rolling blackouts.
As temperatures fell to – 15°F in PJM’s
territory, a number of natural gas and
coal plants were forced out of service due
to mechanical problems and frozen coal
piles. At the same time, heating customers were placing their own exceptional
demands on a limited natural gas supply.
The lights stayed on, but at an enormous
cost, with electricity prices on the spot
market spiking to new highs.
Since this near-disaster, PJM has
begun treating peak demand as a year-round occurrence, and it now requires
suppliers bidding to participate in peak-period “capacity” markets to guarantee
their availability year-round. The ruling
is seen as a boon to operators of newer
coal and natural gas plants capable of
firing up on relatively short notice any
time of year. However, the plan poses a
threat for solar and wind plants along
with aggregated demand-response (DR)
suppliers. These resources each have a
seasonal sweet spot but are challenged
in year-round rapid response.
For example, solar and wind arrays
only operate when their resources are
available, but that availability is some-
what predictable. As a result, solar
operators have been able to bid into
summer capacity markets with strong
confidence the sun will be shining dur-
ing those peak periods. Conversely, wind
blows strongest in winter but often drops
out entirely during hot summer days.
Under PJM’s new requirements, each
of these resources is only eligible to put
forward the capacity it can deliver during
its least productive time of year. For example, a solar-array owner can only promise
38 percent of its highest rated capacity
and a wind-farm operator only 15 percent.
Now, a pilot program in Illinois seeks
to address the potential loss of such
carbon-free power resources by pooling them together for capacity-auction
purposes. The effort, spearheaded by the
Environmental Defense Fund (EDF) and
the Accelerate Group consulting firm—
with assistance from PJM and Citizens
Utility Board—is first focusing on how
various combinations of Chicago buildings can be pooled to provide maximum
DR capabilities any time of year.
“Our fear is that about 80 percent of
demand response could leave the market,
unless they find a way to create combined
assets and partner up,” said Andrew Bar-
beau, Accelerate Group’s president and
a senior clean-energy consultant with
EDF. Interest in participation is high,
and the initial 5–10 building program
has expanded significantly. “That quickly
grew to 60 [buildings], and we’re on the
way to reaching 150,” he said.
To help determine actual DR poten-
tial and develop business plans based on
the resulting data, program managers are
analyzing energy-use patterns of every
building enrolled in the program. A mock
emergency event in February will test
how well buildings and building pools
might respond to an actual call for winter
demand reduction. Beginning in June, a
year-long effort will monitor actual DR
performance in real-world conditions.
Following analysis of those results, the
next step could be partnering building-based DR with the solar and wind arrays,
so those producers also have an opportunity to participate in the capacity market.
For example, combining a wind farm’s
potential output with a commercial
building’s DR capabilities could mean a
higher allowed combined bid, because
wind potential is highest in winter, when
heating needs might make load reduction
more difficult for the building owner.
Conversely, in summer, the building’s
DR potential could make up for seasonally lower wind production.
The larger aim of this effort is to
minimize the demand for new fossil-fuel-fired generation, but Barbeau also sees
the plan as an opportunity for a facility’s
electrical engineers and contractors to
bring new value to an owner’s bottom
line. Traditionally, building owners and
managers have not seen energy use as
something they could easily control, but
this effort will give staff new tools to
reverse this perception.
“Empowering engineers to become
a revenue driver for a facility is a major
shift in the industry,” he said.
The Difference a Winter Can Make
Grids demanding more response from DR providers
IN JANUARY 2014, a weather front known as a “polar vortex” descended from Canada’s
arctic north and brought frigid temperatures and heavy snow and ice as far south as
Texas and eastward to the Mid-Atlantic and New England. Along with the cold came
concerns that electricity supplies could run short, leaving millions without light or
heat. Over the course of those several weeks, electricity-grid managers learned an
important new truth: peak demand is no longer simply a summer phenomenon, and
market practices need to change to reflect this reality.
ROSS is a freelance writer located in Brewster, Mass. He can be reached at firstname.lastname@example.org. DR