What is Demand Response and How Are Virtual Power Plants Connected
Part 1 of 2
Demand Response and Virtual Power Plants are the buzz words of the day on the new, better, and cleaner, power system of the future. But what exactly do these terms mean, and how do they affect you? With any good story we need to start at the beginning, and learn where these programs originated.
History
Demand response first began to appear in the 1970’s during the Energy crises. Utilities looked for ways to limit loads over the peak to avoid cycling expensive generation and control fuel reserves. This was during the analog days of communication protocols, digital communications, and when the public Internet was still in the future. System Data Acquisition and Control (SCADA) was done over leased analog phone lines, over analog radio, or over analog power line carrier via serial RS232 communication links that were slow and had limited bandwidth.
Demand response generally was a contract with a large electric customer that agreed to turn off (or be turned off) significant loads when the utility needed to reduce demand. The large customer usually received a reduced energy rate, and sometimes a performance bonus when actually called upon. The contracts usually contained language that limited the demand response requests to X requests and a penalty for non-performance. Customers that were/are directly controlled usually have a comm relay installed in their equipment controlled by the utility that directly shuts down the contracted load. In the beginning these were analog phone relays.
In the 1980’s and early 1990s, radio controlled relays became very popular, and utilities started using demand response as a tool to control load as part of their overall energy management program instead of just a few cycles a year with large customers. This example of a couple of California based utilities is typical of what was happening at the time. Both Sacramento Municipal Utility District, (SMUD) and Pacific Gas & Electric, (PG&E), moved heavily into this program with contracts of industrial/commercial customers of all sizes. SMUD also began a large consumer program called Peak Corps installing thousands of radio-controlled relays on residential and commercial HVAC air conditioning compressors. When cycled, the SMUD relays would shut off the compressor 5, 10, or 20 minutes depending on what the customer agreed to. SMUD could cycle the relays up to once an hour by contract. Both SMUD and PG&E began working with customers with standby generators to switch loads to generator during peak on request, or by comm relay. These programs were extremely successful, and generators could be heard everywhere on hot days. Then the California Air Resources Board (CARB) stepped in. As they say, all good things must come to an end. CARB decided all these generators were polluting the California air because they were exempt from certain emissions equipment as standby generators. CARB issued sweeping new regulations on how much a standby generator could run during a non-outage and implemented a raft of new reporting requirements. Those new regulations eventually influenced the EPA to issue new rules on new generator certifications regarding air pollution.
Technology also moved on quickly, the radio controlled relay system became obsolete, and parts are difficult to find. The program is still active, but only for the original signers. Then Enron deregulated power and turned everything on it’s head.
Now that we’ve covered the history, let’s dive into where we are today.
Modern Demand Response Implementation
Gone are the days when utilities directly controlled customer loads for demand response. The utilities learned the hard way that equipment support was short lived, proprietary systems quickly became obsolete and had to be abandoned. Analog is all but dead. Now demand response is largely vendor provided by contract, and interfaces to the utility system via an Application Programming Interface (API) over a Virtual Private Network (VPN) tunnel over the Internet. The utility sends the implementation command to the vendor, it’s up to the vendor to execute it, and send back a confirmation of execution. Now if a vendor goes out of business, only some man hours for computer programming are lost.
Note on Load Curtailment Service
Out of this new era, a new service is now offered that is essentially the same as the old 1970’s Demand Response. Load Curtailment may still be executed directly from the utility but is moving in the same direction as Demand Response. The difference is what it is for. Where Demand Response has become more of a cost control tool, load curtailment exists only to meet North American Electric Reliability Corporation (NERC) required performance parameters. This is strictly an emergency only program. Specifically, EOP-011-4, Attachment 1-EOP-011-4 Energy Emergency Alerts, section 2.5 (EEA2):
2.5 Requesting Balancing Authority actions. Before requesting an EEA 3, the energy deficient Balancing Authority must make use of all available resources; this includes, but is not limited to:
2.5.1 All available generation units are on line. All generation capable of being on line in the time frame of the Emergency is on line.
2.5.2 Demand-Side Management. Activate Demand-Side Management within provisions of any applicable agreements.
The mega watt (MW), available for this section has to be clearly documented, and non-compliance has significant financial penalties for all involved.
Where Demand Response is Now
Demand response has become much more of an economic tool in the modern grid than a reliability tool, although it still gets that duty as well. Implementations are more about reducing load, or shifting load to shape the economics of what generation is needed. If demand response can reduce the procurement costs of the energy supplied, it results in a better bottom line for the utility.
Types of Demand Response For Consumers
By far, the most common demand response programs are based on the new Internet connected smart thermostats. The revolution really began with the Nest thermostat from Google, it was clearly a shift in how home automation was going to work going forward. Joining the pond quickly were the ecobee Smart Thermostat and Honeywell. Honeywell has been in the thermostat business for at least 60 years, but they were able to pivot as the market changed. Now the list of smart thermostats with demand response programing is long and getting longer, everyone is getting in the game. I asked Pilot and counted about 20 on what is probably an incomplete list. However not every utility works with every thermostat.
I personally have an ecobee premium, and I must say, it’s a pretty cool piece of kit. Even without connecting to the utility it has a number of energy saving features including room sensors, and real feel adjustment for humidity. I use an integration with Flair smart vents to control air flow to help balance room to room temperature. I also use the integrated home security system as opposed to someone like ADT. If Robert Bryce had one he could integrate with his Generac generator or, your Generac solar inverter, and get status information over his ecobee app (Generac owns ecobee), then he could review that status straight from his phone. So, there are lots of reasons to have one of these new thermostats if you don’t already.
As an odd entry that didn’t make the cut, SCADA/EMS vendor Open Systems International Inc., (OSII) launched a smart thermostat product in 2020 that was designed to be owned by the utility and distributed for free to the customers. It was called TINA, short for Thermo Intelligent Network Appliance. It was most definitely designed by electrical engineers because it was about as ugly as they come, including a faceplate to display a silkscreen utility logo. It hailed back to the old direct control days a bit. Here is a link to the press release https://www.pressreleasepoint.com/osi-launches-utility-owned-smart-thermostat-tina-empowering-utilities-and-their-environmentally . TINA died a quiet death after OSII was purchased by Emerson, who has their own smart thermostat called Sensi.
Consumer Thermostat Programs
The smart thermostat vendors figured out there is money to be made providing this service. The utility sends the command via an API and the thermostat vendor does the work, for a fee. In basic terms, they change your thermostat setting a few degrees to back off your HVAC, both for cooling and heating. They go from community programs provided by the vendor to opt in programs with your utility. Many have an event opt out feature so you can choose not to play for a given event, but it is tracked. The more serious utilities do not allow you to opt out, you are in no matter what (rare). Some utilities exercise a pre-cool where they turn your air conditioning down several degrees to super cool your home, then turn it up several degrees during the demand reponse event. Most do 2-3 degrees, but the serous ones have a specific setpoint they want regardless of your setting. The pre-cool swing can be pretty dramatic. As time goes on these programs are getting more and more aggressive.
Part 2
In part 2 we will talk about some other consumer programs as well as what is being done in the commercial/industrial sector. Then we will bite off the Virtual Power plants and what is really going on with that new catch phrase.
Thermostat Links
Here are links to a number of the smart thermostat vendors in the market, trust me when I say there are more. I did not include any HVAC manufacture models that are probably for their own equipment. If you plan to use the Demand Response feature, make sure it’s a brand listed with your utility. If you want to know more about what your utility is doing, do a web search for “[your utility] smart energy program”.
The last thing I want in my house is a "smart" thermostat. I want a dumb thermostat that does exactly what I tell it to do.
Very nice article my friend