Battling Load Growth in NYC

1
Battling Load Growth in NYC

• Chris Smith
• NYSERDA
• NARUC 2007 Summer Meeting

2
NYSERDAs Role

• Administrator
• Design and Implement Programs
• Support Regulators
• State Appliance Standards and Energy Code
• Green Building Tax Credit
• Renewable Portfolio Standard
• Facilitator
• Robust Network of Energy Service Providers
• Leveraged Financing
• Policy Maker
• Executive Order Green Clean
• Innovator
• RD Technologies

3
New York State Policy Environment

• New York Energy martsm Program
• By Regulatory Order of the NYS Public Service
  Commission
• NYSERDA as the system-wide, non-utility
  administrator
• 8-year program (thru June 2006) 962 million
• Public purpose goals of energy efficiency and
  cleaner environment
• SBC Advisory Group Independent Evaluator
• SBC Renewed thru June 2011 895 million

4
New York State Policy Environment (Contd)

• Utility Rate Settlement Cases
• NYC gas efficiency program NYSERDA 5m 14m
• NYC demand management starting 2006
• Offset load growth by 2008 300 MW
• 120m to NYSERDA for system wide program
• Directives/Laws
• Executive Orders EE goals product purchasing
  standards
• NY Green Building Tax Credit - 50 m
• Appliance/Equipment Standards codes
• Renewable Portfolio Standards
• Gov. Spitzers 15 by 15 Clean Energy Strategy

5
Need for Demand Based Programs

• NYC is required to have a majority of its
  generation in city
• Load growth has created the need for near term
  distribution upgrades in NYC
• NYC is an underground network distribution system
• High electricity demand days coincide with high
  ozone days

6
NYC Capacity Market

• NY has an administratively set demand curve
• Capacity surplus results in lower prices
• Capacity shortfall results in higher prices
• Summer 2006 Capacity Prices
• Upstate Roughly 2.50/kW per month
• NYC Roughly 12.50/kW per month
• Capacity prices significantly impact the social
  value of demand reduction measures

7
New Yorks Energy Market

• Day Ahead hourly market accounts for /- 50 of
  energy sold
• Bilateral contracts account for the other half
• Real Time Market is used for balancing
• Locational Marginal Pricing The highest priced
  unit selected to run sets the price for all
  selected units in that geographic zone

8
New Yorks DR Market

• DR is treated equal to generation
• Emergency Demand Response Program (EDRP) Energy
  based and voluntary
• ICAP Special Case Resource Program (SCR)
  Capacity based and mandatory energy payments
  are also made for events
• Day Ahead Demand Response Program (DADRP)
  Energy based and mandatory DR competes with
  generators in day ahead market

9
NYISOs ICAP SCR Program

• Provides availability payments for DR capacity
  resources to be available for deployment
• Capacity payments are made whether or not an
  event is called
• Energy payments are made for event performance
• Penalties and future deratings are assessed for
  underperformance
• A majority of resources are provided by third
  party Demand Response Providers

10
NYSERDAs Role in DR

• NYSERDA encourages DR through either structured
  DR programs (ICAP/SCR) or dynamic rate options
  (Real Time Pricing)
• NYSERDAs focus is on overcoming market barriers
  by providing enabling technologies,
  education/outreach

11
NYSDERDAs Peak Load Reduction Program

• Reduces load by funding energy efficiency and
  demand response projects
• Incentives are kW based, not kWh
• Demand response funding is for technologies that
  enable customers to participate in ICAP/SCR
• Incentives available for controllable appliances
• Service Providers or end users may apply

12
1211 Avenue of the Americas

• Rockefeller Center
• Installation of Digital Energy Monitors that
  track the chillers, chiller water pumps, and
  condenser water pumps in real time
• Equipment installed increased reliability to
  curtail buildings load while maintaining tenant
  comfort
• 500 kW reduction
• NYSERDA incentive 90,000

13
Home Depot

• 43 store participation
• Interval meters installed at each location along
  with upgrading its Energy Management System
• Average reduction for each store of 130kW

• Reduction for all stores totals 5.5 MW
• Technology allowed for direct control of all
  stores from a central office
• NYSERDA incentive approximately 300,000

14
Macys Staten Island

• New control system software to integrate variable
  frequency drives (VFDs)
• HVAC system renovation

• Allows for prioritized load control during NYISO
  demand response events
• 18,962 incentive from NYSERDA
• Less than 3 year payback period

15
The Social Value of DR

• In NY, DR capacity clears in the same auctions as
  generation capacity
• More DR More Capacity Available
• More Capacity Lower Prices For Ratepayers

16
NYs Capacity Demand Curve
DR has a price dampening effect
17
Results

• NYISO has roughly 1,800 MW in EDRP SCR
• NYSERDA has provided technology that enabled over
  500 MW of demand response
• NYSERDA has permanently reduced load by 562 MW
  through Energy Efficiency
• Annual Emissions Reductions (tons)
• NOx 2,430, SO2 4,450, CO2 1,900,000

18
Next Steps in DR

• Use Direct Load Control Technology to unlock
  smaller scattered resources ie. retail chains
• Advance load control technology for use in
  appliances ie. window wall AC units
• Smart Grid Smart appliances with standardized
  communication platform
• Expand the use of DR ie. spinning reserves

19
Keys to Success

• Use all the tools in the toolbox Energy
  Efficiency, Load Management, Demand Response,
  Combined Heat and Power
• Work to create markets with strong business cases
  this will attract project developers
• Work with the middle market ESCOs, Demand
  Response Providers, etc.
• Value Demand Response equal to generation