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Demand Response Reserve Pilot Project (DRR Pilot)

Demand Response Reserve Pilot Project (DRR Pilot). Markets Committee March 24, 2005. Statement of the Problem. Some DR resources that are willing and able to provide reserve products may not be able to participate in the Ancillary Service Market

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Demand Response Reserve Pilot Project (DRR Pilot)

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  1. Demand Response Reserve Pilot Project (DRR Pilot) Markets Committee March 24, 2005

  2. Statement of the Problem • Some DR resources that are willing and able to provide reserve products may not be able to participate in the Ancillary Service Market • The proposed ASM design requires reserve resources: • Be at least 5 MW • Receive dispatch instructions via a RIG and comply with OP-18 telemetering requirements • Typical demand response (DR) resources are small and dispersed • In New England, most DR resources are less than 5 MW • The cost of installing and maintaining a RIG and complying with OP-18 requirements is not cost-effective or practical • Some DR resources have operating characteristics that differ from typical generators

  3. Objectives of the DRR Pilot • Demonstrate whether customer loads can reliably provide 30-minute operating reserve and 10-minute non-synchronized reserve • Determine the requirements for communications, dispatch, metering, and telemetry sufficient for DR resources to provide reserve services • Identify and evaluate lower cost communications and telemetry solutions that meet the requirements and are more suitable for DR reserve resources

  4. End State • Assuming acceptable DR resource performance, fully integrate DR resources into the market and system operations: • Modify market rules and requirements where necessary • Implement functionally equivalent dispatch and telemetry alternative for DR resources • Upgrade System Operations and Settlement software where necessary • DRR Pilot terminates when integration is complete • Assuming unacceptable DR resource performance, immediately terminate the DRR Pilot

  5. Process to Date • September 29, 2004 – Presentation to the NEPOOL Markets Committee by Tom Atkins of Pinpoint Power outlining alternative approaches for DR participation in the Forward Reserve Market • Demand Response Working Group (DRWG) and ISO New England commences development of DRR Pilot • Presentations to NEPOOL Markets Committee on: • 11/10/2004; 01/11/2005; 02/08/2005 • The DRR Pilot Design Basis Document (the subject of today’s meeting) reflects consensus of the DRWG

  6. Project Details • DRR Pilot consists of two related sub-projects: • Sub-Project 1 (DR Performance Evaluation): Evaluate DR resource performance in response to reserve activation events • Sub-Project 2 (Alternative Dispatch and Telemetry): Identify and develop a functionally equivalent dispatch and telemetry alternative for DR resources

  7. Sub-Project 1 Details(DR Performance Evaluation) – 1 • Performance Evaluation Period – 1 year • Program Size – Total of 50 MWs. Resources from among three resource types would be recruited: • On-site generation • Weather-dependent load (e.g., air conditioning) • Non-weather-dependent load (e.g., manufacturing processes) • DR Resource Size – preference given to resources less than 5 MW; allow aggregations within a zone

  8. Sub-Project 1 Details(DR Performance Evaluation) – 2 • Enrollment – Participating resources must enroll in 30-Minute RTDR Program • Availability • Seasonal: Forward Reserve Market procurement period • Daily: Business days 7 a.m. to 6 p.m. • Dispatch • Resources dispatched during ISO-NE Reportable Events • To the extent Reportable Events do not cover all important DR test conditions, additional events may be called to test such conditions

  9. Sub-Project 1 Details(DR Performance Evaluation) – 3 • Metering & Communication – requires use of the IBCS-OS, as defined in Manual M-LRP • Performance Measurement for Settlement Purposes – determined in same manner as existing DR programs • Payments • Availability Payment • Performance Payment • Performance Penalties • Loss of Availability Payment • Replacement Energy Payment

  10. Sub-Project 1 Details(DR Performance Evaluation) – 4 • Allocation of Program Costs • Availability Payment • Pro rata based upon Participant's share of previous month's ISO Tariff charges under schedule 1,2, & 3 • Energy Payment • Real-Time Load Obligation Deviation in appropriate Load Zone • Penalties charged to DR participants would be credited back to parties allocated to pay

  11. Sub-Project 2 Details(Alternative Dispatch and Telemetry) – 1 • Evaluate low-cost, two-way communication alternatives • Define requirements for communication frequency, latency, security, reliability, adaptability to interface to current ISO systems, etc. • A separate white paper is being developed by System Operations to further define the above-mentioned requirements.

  12. Sub-Project 2 Details(Alternative Dispatch and Telemetry) – 2 • Conduct research to determine what existing systems might potentially fulfill the requirements • Depending on the outcome of the above-mentioned research: • Modify existing ISO-NE systems to meet the requirements, and/or • Develop and issue an RFP to produce proposals that meet the identified requirements • If an RFP is developed and issued, evaluate responses to the RFP including the functionalities and cost consequences of the proposed solutions

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