Demand Response A Resource Alternative

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Demand Response A Resource Alternative

• Greg Padden
• Great River Energy

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Great River Energy

• 4th largest GT in nation
• 28 member cooperatives
• 725 employees
• 2,500 MW of generation
• Serve nearly 2/3rd of the geographical area of MN
  
• 615,000 members
• Energy Sales
• 62 residential
• 38 commercial industrial, agriculture

3
GREs daily peaks for an entire year
1200 MW
1200 MW
June - August
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GRE's challenges

• Rapid load growth
• Summer demand has grown 1,000 MW during last 10
  years
• Future load growth is 110 MW and 15,000 MWh per
  year
• Energy sales far exceed GREs base load
  generation many hours
• Cost of supplying the load growth is tremendous
• GRE will need 1,000 MW of new generation over
  next 10 years
• Regional needs for additional transmission (gt
  6,000 MW)
• MISO
• Dynamic and complex energy market
• Regulatory, environmental, and technological
  uncertainty

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How can demand-side solutions help?

• Demand-side solutions can provide flexible supply
  alternatives in an ever more complex world
• Demand response
• Primary goal is to save capacity (kW)
• Cost is often less expensive than new peaking
  generation
• Becoming a very effective tool for avoiding
  high-cost energy purchases in the wholesale
  market
• Energy efficiency
• Primary goal is to save energy (kWh)
• Less expensive than building new base load
  generation or purchasing energy in the wholesale
  market
• Becoming more cost effective as incremental
  load-serving costs rise
• Rate design
• Potential to change load requirements using price
  signals

6
Demand response in action
11 Hours
255 MW
2168 MW
AC PSWH 1100
ETS Restore 2300
CI 1300
Irr. 1600
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What is GRE doing to change the future?

• Aggressive promotion of demand response programs
  that reduce summer peaks
• Cycled air conditioning
• Controlled irrigation
• Commercial industrial interruptible programs
• Peak shave water heating
• Building support for energy efficiency programs
  that encourage the saving of kilowatt-hours
• Air conditioning quality installation
• Compact fluorescent lighting
• Revising wholesale rate structure
• Encourage behavior changes in demand energy
  usage
• Time of use energy rates - on-peak, off-peak
  critical peak
• Seasonal demand rates

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How is GRE doing?

• Demand response
• Over 270,000 loads are under centralized load
  control
• 335 MW or 12 of summer peak can be interrupted
• 260 MW or 13 of winter peak can be interrupted
• Energy efficiency
• Each year, GRE saves 35,000 MWh or .3 of energy
  sales
• These savings accrue at this level for 10 -15
  years
• Since 2001, GRE has issued over 16M in energy
  efficiency rebates
• In 2007, GREs rebate budget is 4.5M
• Rate design
• New cost of service methodology and rate design
  to begin in 2008

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Future of demand response at GRE

• Continue support for demand response and energy
  efficiency programs that are proven least-cost
  resources
• Monitor and evaluate costs of existing demand
  response programs
• Target use of demand response to reduce peak
  demand and high-cost energy needs
• Deploy cost effective energy efficiency programs
  to help meet some portion of expected future
  growth
• Continue long-term commitment to implementing
  cost- effective demand response and energy
  efficiency efforts
• Provide sufficient, timely, and stable funding of
  programs
• Continue to communicate the benefits and
  opportunities for demand response and energy
  efficiency
• Work with members to maintain balance between
  customer satisfaction and program optimization

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Conclusions

• "Real" integrated resource planning must include
  both supply-side and demand-side options
• Time-based scarcity is a reality
• Better understanding of energy use and costs will
  be critical
• Demand response, energy efficiency and rate
  design can provide strategic and competitive
  advantages by
• Providing appropriate incentives for changing
  energy use
• Reducing the need for new supply resources
• Reducing overall power supply costs
• Demand-side supply options are a key component of
  GREs triple bottom line
• Reliable service
• Competitive rates
• Environmental stewardship