Task XIII

1

• Task XIII
• Demand Response Resources
• APEC Workshop
• June 8, 2004
• Ross Malme, Operating Agent

2
Demand Response Resources

• Definition Demand response is the ability of
  electricity demand to respond to variations
  in electricity prices in 'market' or 'real'
  time.
• Market economic/bidding structures
• Real time reliability response
• It can be achieved through load reductions
  or utilizing alternative onsite generation
  sources.  Inclusion of Demand Response Resources
  (DRR) in energy markets can take the form of
  reduced energy costs, direct payments for energy
  not consumed, and/or a reservation payment for
  being available to reduce consumption upon
  request.

3
Conclusion from Prior IEA Work

• Three conclusions from IEAs Power to Choose
  white paper
• Current market designs do not enable demand
  response due to
• out-dated metering and related technologies,
• a lack of real-time price information reaching
  consumers,
• regulated retail prices while wholesale markets
  have largely been deregulated,
• system operators focused on supply-side
  resources and,
• a legacy where demand response was not considered
  important.
• Significant investment is needed in DR
  infrastructure to enable markets to communicate
  the value and cost of electricity.
• Governments and regulators are key in enabling DR
  
• benefits of DR are dispersed among different
  market players
• current markets will not develop a meaningful DR
  capability without facilitation.

4
Task XIII Demand Response Resources

• Initiated by IEA DSM ExCo on 10/15/03
• Project lead by USA through US DOE
• 11 Countries Committed with expectation of 12-15
• Project Prospectus released 11/03
• Work began on project 2/04 on initial contract
  with US DOE
• Annual Task Work Plan approved by ExCo on April
  15, 2004
• First Experts Workshop in Valencia Spain
  Completed on May 10-11, 2004
• Next Experts Meeting scheduled for Milan,
  September 20-21st

5
Task XIII Objectives

• 1. Identify and develop the country specific
  information needed to establish the existing
  stock of and potential for demand response.
• Collect relevant market data (e.g. market
  structure, sector makeup, etc)
• Develop econometric models to assess market
  potential
• 2. Perform the market and institutional
  assessment needed to set realistic goals for the
  contribution of DRR to sector objectives.
• Evaluate and recommend best practices
• Business case assessments
• 3. Mobilize the technical and analytic resources
  needed to complete the project.

6
Task XIII Project Scope

• Project length 30 months
• Cost Share portion of project 1.8M US
• USA funding majority of project management costs
• Country cost share 90K over three years
• Task Share estimated at 1200 hours per country
• Project to be managed over Internet Portal
• Staged release of deliverables and IP
  approximately every 6 months
• IP ownership an issue
• Method for NMC and private parties to participate

7
Project Tasks Deliverables

• Eight proposed activities and project tasks
• Task 1 -- Finalize Principles and County-Specific
  Objectives
• Product Project plan and Country Objectives/Work
  Plan
• Task 2 -- Define the DR Resource Base and Market
  Characterization
• Product Best practice database
• Task 3 Market Potential of DRR
• Product A set of tools to help member countries
  estimate the magnitude of DRR in their country
• Task 4 Demand Response Valuation
• Product DRR valuation model to assess the public
  and private value associated with different
  levels of DRR.

8
Project Tasks Deliverables

• Task 5 Role and Value of Enabling Technologies
• Product A catalogue of existing, new and
  potential DR enabling technologies
• Task 6 Priorities and Barriers Solutions and
  Recommendations
• Product Information repository that tracks the
  identification and resolution of DRR market
  barriers.
• Task 7 Develop DRR Network of Methods, Tools
  and Applications
• Product A website that holds all information
  developed from the project.
• Task 8 Deliver Products and Intellectual
  Property (IP)
• Product Regional workshops to explain findings
  and demonstrate how to use the econometric tools

9
DRR Project Approach

• DRR qualitative and quantitative resource
  assessment by Region
• Establishing DRR goals by country or region
• Assessment of economic value of DRR
• Determination of Best Practices by Application
• Role of enabling technologies
• Identifying barriers to implementation
• Recommending Target levels of DRR per region
  based upon resource assessment and value created
• Recommendations for implementation

10
2004 Action Items

• Operating Agent
• Develop methodology for assessing DRR market
  potential
• Determine and request data
• Create technical work groups for project tasks
• Develop best practice evaluation criteria and
  present recommendations
• Develop methodology for assessing the economic
  value of DRR
• Each Country
• Complete Marketplace Overview questionnaire
• Establish Country DRR Objectives
• Create Country Stakeholder process and In-Country
  Project Communication Plan
• Participate on at least one technical work group

11
Country Stakeholder Groups Example US DRCC

• Intended to represent USA interests in DRR
  Project
• Additional funding vehicle for USA
• Letter sent out by FERC/DOE in January to CEOs of
  top 150 electric utilities, ISOs and private
  sector
• Empowered by DOE to act on behalf of US on DRR
  project
• Organized as nonprofit in March 04
• Partnership of Public and Private Sectors
• Expect participation by 4 ISOs, 10-12 utilities,
  two state agencies and 5-10 private companies
• Suggest each country establish similar
  stakeholder group

12
Experts Meeting May 10-11

• Location is Valencia Spain
• Hosted by Red Electrica and Polytechnic
  University of Valencia
• Data templates released in April
• Individual workshops sessions for each
  participating Country
• Focus on defining Demand Response Resources

13
Task XIII Project Portal

• Primary project management tool
• Will reduce travel costs and accelerate schedule
• Used to distribute Project documentation, and IP
• Used by participants as a collaborative tool
• Inventory of best practices, applications and
  technologies
• Track development of pilot projects
• Used to manage project working groups
• www.demandresponseresources.com/portal

14
Recommendations for APEC and Australia in Task
XIII

• Review Minutes and Action plans from Spain
  Experts Workshop
• Develop specific objectives for APEC and
  Australia in Task XIII
• Create Australian Stakeholder Group for Task XIII
• Begin using Project Internet Portal as a tool for
  communicating with Country Stakeholders, Other
  Country Experts and OA
• Plan to participate in next Experts Meeting in
  September