End Use Monitoring and Feedback (EUMF)
One of the ways in which customer motivation to save energy can be developed is by identifying and presenting to customers a breakdown of their individual end uses of energy, its cost and environmental impact.
Feeding back disaggregated energy end use information to smaller customers using a range of methodologies has been shown to motivate energy savings of the order of 10%. A survey in one country showed that 70% of smaller customers were prepared to make changes to save energy if they were advised how to do it and it involved little inconvenience. Monetary savings resulting from the application of EUMF to direct electric heating customers have been estimated to be worth €100 per year per customer. Direct measurement of specific customer end uses of energy on a continuous basis is probably too expensive for wide scale application to smaller customers. Estimates of the costs of face-to-face and Internet interviews with customers to collect data and feedback end use information and advice show this to be an attractive option. EUMF motivator messages have also been shown to encourage customers to replace energy inefficient end uses with efficient ones.
Time of Use Pricing (TOU)
Time of Use electricity pricing is another mechanism for encouraging energy demand and profile shape change. This is already a normal pricing, billing and settlement mechanism for larger customers. Mobilising customer demand changes and shifting energy use to different time periods has the potential to save energy and money for customers as well as system capacity. The financial savings result from customers taking advantage of lower price energy at non-peak times through tariffs and other more dynamic measures offered by Suppliers. Energy and CO2 savings can result from reduced system losses, the extent of the savings being determined by the generation mix in different countries.
IEA, DSM, Task XI, Subtask 2 estimated the financial viability of implementing different TOU and Dynamic TOU pricing regimes by equating reliable and flexible demand shift, including operation of embedded generation, with scheduled generation, transmission and distribution network construction costs. In order to do this, the study estimated the costs of implementing TOU pricing régimes per kW of demand shift as well as the costs of new supply side construction.
The study identified that thermostat reductions of direct space and water heating and air conditioning for a few hours per year are able to make significant contributions to reducing system peak demands. It also identified that small scale micro generation could easily be controlled on the basis of TOU pricing to reduce unscheduled peak demands. Results of field trials of dynamic pricing identified that automatic intervention is preferred by customers for shifting demand, rather than requiring manual actions.
Demand Side Bidding (DSB)
Demand Side Bidding is a mechanism enabling the demand side of electricity markets to participate directly in energy trading. Micro DR Demand Aggregators (DAG) deliver demand changes at customer premises and these benefit System Operators, Suppliers and customers. DSB allows demand changes to be predicted, made to happen on a reliable basis, be validated and built into schedules as alternatives to generation in meeting system demand and offsetting wind generation intermittency.
Examples of DSB products are illustrated below.
Provision of Demand Response and Energy Saving Services to Smaller Customers
The provision of Demand Response (DR) and energy saving services to smaller and SME customers, in terms of demand disaggregation information and “smart” metering and controls, offers opportunities to Energy Saving Service Providers(ESSPs)/DAGs for potentially profitable business. The business model is likely to be different to that of Energy Services Companies (ESCOs) and based on delivering services to millions of micro loads and customers rather than hundreds or thousands. A very low cost of service will be a requirement of ESSP/DAG businesses.
Task XI, Time of Use Pricing and Energy Use for Demand Management Delivery
Conclusion of the previous Task XI work, mid-2007, showed that EUMF, TOU pricing and DSB all have the potential to deliver valuable demand profile change and financial benefits. The work demonstrated that relatively small amounts of demand flexibility can have large benefits in reducing peak capacity requirements.
The basis for an extension of this work, via a new Task (Task XIX), was therefore proposed at the October 2007 DSM ExCo meeting, held in Brugge, Belgium. Eleven candidate participants indicated interest in this proposed activity and it was therefore agreed to develop the basis for the work programme, via a dedicated Task Definition Meeting.
The Task Definition Meeting, EA Technology, Capenhurst, Chester, UK, 23rd-24th January 2008
EA Technology therefore convened a Task Definition Meeting, at its Capenhurst offices, 23rd-24th January 2008. Representatives and experts participated from four countries and received keynote addresses from National Grid (UK) and Defra (UK). They then discussed the essence of the proposed new Task, with detailed consideration being given to the content of each of the proposed work packages (or subtasks). The conclusion of the workshop, provided a clear steer for the development of the new Task, as embodied in the present paper.
The proposed Task XIX will define DR and energy saving products and how to actually deliver them into the residential and SME markets on a commercial basis using ESSP/DAG businesses. Funding mechanisms and the provision of information and controls infrastructure will be studied and evaluated. The potential for these measures to be accredited for financial support by Governments and Regulators, (White Certificates, EEC/CERT, etc) will also be evaluated. Accreditation to enable Suppliers to include DR measures towards meeting their energy saving targets is an important consideration and will also be evaluated.
Proposed ESSP/DAG business tasks are expected to include the following:-
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The aim of Task XIX is to investigate the implementation of TOU pricing, remote/automatic demand switching and energy end use monitoring for SME and residential customers so as to quantify the costs, benefits and business viability of such measures from the System Operator, Demand Balancing and energy saving perspectives.
Specific objectives of Task XIX are to:-
· Define DR and Energy Saving products to meet System Operator, Supplier, Government and Customer requirements;
· Make an overall assessment of common ground and technologies to be shared with smart metering infrastructure;
· Estimate incremental costs of implementation of product delivery systems
· Quantify the business case for the provision of DR and Energy Saving products.
Participation in Task XIX will enable Task Participants to:-
· understand the advantages and disadvantages of TOU pricing, Demand Response and demand disaggregation and feedback for residential and SME customers in competitive energy markets;
· gain an independent view of technology and benefits available for TOU pricing and demand disaggregation
· quantify the value and technologies for end use monitoring and feedback, Time of Use Pricing and DR to customers and its potential for achieving DSM objectives;
· develop national policies to encourage time of use metering, pricing and demand disaggregation within competitive energy markets;
· understand the role of demand side participation in energy markets through the use of DSB/DR programmes and mechanisms;
· quantify the need for time of use metering or developed profile metering in order to validate DSB/DR implementation;
· quantify infrastructure needs for alternative load control options and savings calculations;
· understand the contribution that Dynamic DR can have on the improving the utilisation of wind generation capacity.
Subtask 1 (DR and Energy Saving Products)
Subtask 2 (End Use Demand Changes)
Subtask 3 (DR and Energy Saving Delivery Mechanisms)
Subtask 4 (SME Customer Costs and Benefits)
Subtask 5 (Residential Customer Costs and Benefits)
Subtask 6 (Business Case Estimation)
The principal deliverables associated with Task XIX are one or more reports, addressing:-
· Definition of requirements for Micro DR and Energy Saving Products
· Analysis of End Use Demand Changes for delivery of DR and Energy Saving
· Analysis of DR and Energy Saving Delivery mechanisms and Technologies
· Costs and Benefits for SME Customer DR and Energy Saving
· Costs and Benefits for residential Customer DR and Energy Saving
· Business case assessment of the provision of DR and Energy saving products for SME and residential Customers
· Regulator and energy policy overview
It is anticipated that Task XIX will require 15 months to complete.