Feature

Heat waves: Demand response's time to shine

Efficiency and demand response can keep a hot weather from turning into a price spike for individual customers and the larger grid.

A heat wave this week created unseasonable and record-breaking temperatures in parts of the Northeast and Midwest, and utilities took the shoulder-season anomaly as a systems check. Grid operators for New York and the Mid-Atlantic reported no operational issues, and only moderate movement in power prices.

In the Northeast there were three days of temperatures above 90 degrees, meaning that in addition to being miserable the stretch also met the "official" definition of a heat wave, The Washington Post reported. In New York City, temperatures went to 93. 

But regional grid operators took it in stride, with ample supplies to meet the extra cooling demand. All say they are prepared to meet peak demand on a hot August day, and so an early test in the waning days of spring barely registered.

"Prices were fairly flat except during the peak on Monday, when you’d expect the more expensive units to be called on," PJM spokesman Ray Doddard said in an email. "We had no operational issues."

New York ISO's peak load on Monday was 29,049 MW — compared with an all-time high of 33,956 MW in July of 2013.

"We expect to meet the peak demand and maintain adequate operating reserves over the peak hour," ISO spokesman David Flanagan said. Prices "generally track higher on higher demand days," but he also said the operator's demand response programs had not been initiated Monday or Tuesday.
 
The financial implications of a heat wave can be significant, particularly on small business customers. According to energy intelligence provider FirstFuel, higher cooling loads due to a heat wave can increase building energy consumption by 20%.

By FirstFuel's math, a municipal building in the Washington D.C. area typically uses 200 kW per summer day, but might use 251 kW during a heat wave. At more than $300/day in extra cooling costs, the tab can rise quickly. That can create an incentive to take action, but if customers wait until it shows up on their bill then the moment has been missed.

"A heat wave can be a motivating force for a lot of people," said Indy Ratnathicam, FirstFuel’s vice president of strategy. By ramping up engagement efforts around weather events, he said utilities can find some opportunity in the sweaty misery.

About 30 utilities use FirstFuel's software and the company crunches data from 4 million meters, which Ratnathicam said can "help utilities figure out what they should be recommending to customers." Be it rate programs or retrofits, the improved engagement increasingly means customer personalization can improve satisfaction, boost revenues and reduce costs."

"Personalization of these things, particularly in the business sector, is incredibly important," said Ratnathicam. Depending on a variety of factors, a pre-cooling online banner that has a personalized or targeted message can be from four- to 10-times as effective than a non-targeted ad, he said.

"If you have that level of understanding of the customers, it can help drive effectiveness," said Ratnathicam. "We’re providing business customer engagement software for utilities ... to help them use their data, to improve customer interactions, and improve uptake of services."

Fostering the growth of various energy resources can help make grid operations more efficient. And while we tend to focus on the challenges created by the most extreme weather — from the Polar vortex or triple-digit heat — milder shoulder seasons bring their own difficulties beyond just keeping the lights on.

ISO-New England has published a blog post focused on one hot day last month, to illustrate the broader challenges of operating in spring and fall: "When unseasonable weather drives a spike in demand while major energy infrastructure is offline for maintenance."

ISO-NE explained that on May 18, over 7,600 MW of generation were unavailable, "mostly due to planned outages and reductions." Additionally, several transmission upgrade projects were going on in the Boston areas and in northeastern Massachusetts, leading to planned plant outages.

New England temperatures spiked to record highs that day, and the ISO's system peaked at just over 20,000 MW. For reference, a typical spring peak ranges from about 15,000 MW to 16,900 MW.

The system continued to operate reliably, the grid operator explained. But at a cost. Real-time prices ranged from almost $760/MWh in the northeastern Massachusetts and Boston pricing zone, down to -$71/MWh for power from New Brunswick (yes, negative power prices).

Prices rose in many places as constraints blocked out cheaper power. Conversely, prices rose in New England areas where "transmission limitations and outages locked in energy that day." There are areas where the transmission system is too constrained to carry wind power and on particularly windy days not all of it can be moved.

"The negative prices essentially indicated resources’ willingness to pay to keep operating, rather than being dispatched down or off line to prevent overloading the transmission system," ISO New England explained. 

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Filed Under: Efficiency & Demand Response
Top image credit: Flickr user eflon