An exploratory analysis of California residential customer response to critical peak pricing of electricity

This paper summarizes the results from an exploratory analysis of residential customer response to a critical peak pricing (CPP) experiment in California, in which 15 times per year participating customers received high price signals dispatched by a local electricity distribution company. The high prices were about three times the on-peak price for the otherwise applicable time-of-use rate. Using hourly load data collected during the 15-month experiment, we find statistically significant load reduction for participants both with and without automated end-use control technologies. During 5-h critical peak periods, participants without control technology used up to 13% less energy than they did during normal peak periods. Participants equipped with programmable communicating thermostats used 25% and 41% less for 5 and 2 h critical events, respectively. Thus, this paper offers convincing evidence that the residential sector can provide substantial contributions to retail demand response, which is considered a potential tool for mitigating market power, stabilizing wholesale market prices, managing system reliability, and maintaining system resource adequacy.     

Residential response to critical-peak pricing of electricity: California evidence

This paper analyzes data from 483 households that took part in a critical-peak pricing (CPP) experiment between July and September 2004. Using a regression-based approach to quantify hourly baseline electric loads that would have occurred absent CPP events, we show a statistically significant average participant response in each hour. Average peak response estimates are provided for each of twelve experimental strata, by climate zone and building type. Results show that larger users respond more in both absolute and percentage terms, and customers in the coolest climate zone respond most as a percentage of their baseline load. Finally, an analysis involving the two different levels of critical-peak prices – $0.50/kWh and $0.68/kWh – indicates that households did not respond more to the higher CPP rate.     

Direct load control of residential water heaters

In Norway there is a growing concern that electricity production and transmission may not meet the demand in peak-load situations. It is therefore important to evaluate the potential of different demand-side measures that may contribute to reduce peak load. This paper analyses data from an experiment where residential water heaters were automatically disconnected during peak periods of the day. A model of hourly electricity consumption is used to evaluate the effects on the load of the disconnections. The results indicate an average consumption reduction per household of approximately 0.5 kWh/h during disconnection, and an additional average increase in consumption the following hour, due to the payback effect, that may reach up to 0.28 kWh/h per household.     

The effect of utility time-varying pricing and load control strategies on residential summer peak electricity use: A review

Peak demand for electricity in North America is expected to grow, challenging electrical utilities to supply this demand in a cost-effective, reliable manner. Therefore, there is growing interest in strategies to reduce peak demand by eliminating electricity use, or shifting it to non-peak times. This strategy is commonly called “demand response”. In households, common strategies are time-varying pricing, which charge more for energy use on peak, or direct load control, which allows utilities to curtail certain loads during high demand periods. We reviewed recent North American studies of these strategies. The data suggest that the most effective strategy is a critical peak price (CPP) program with enabling technology to automatically curtail loads on event days. There is little evidence that this causes substantial hardship for occupants, particularly if they have input into which loads are controlled and how, and have an override option. In such cases, a peak load reduction of at least 30% is a reasonable expectation. It might be possible to attain such load reductions without enabling technology by focusing on household types more likely to respond, and providing them with excellent support. A simple time-of-use (TOU) program can only expect to realise on-peak reductions of 5%.     

Option value of electricity demand response

As electricity markets deregulate and energy tariffs increasingly expose customers to commodity price volatility, it is difficult for energy consumers to assess the economic value of investments in technologies that manage electricity demand in response to changing energy prices. The key uncertainties in evaluating the economics of demand–response technologies are the level and volatility of future wholesale energy prices. In this paper, we demonstrate that financial engineering methodologies originally developed for pricing equity and commodity derivatives (e.g., futures, swaps, options) can be used to estimate the value of demand-response technologies. We adapt models used to value energy options and assets to value three common demand–response strategies: load curtailment, load shifting or displacement, and short-term fuel substitution—specifically, distributed generation. These option models represent an improvement to traditional discounted cash flow methods for assessing the relative merits of demand-side technology investments in restructured electricity markets.     

Demand response in electrical energy supply: An optimal real time pricing approach

In competitive electricity markets with deep concerns for the efficiency level, demand response programs gain considerable significance. As demand response levels have decreased after the introduction of competition in the power industry, new approaches are required to take full advantage of demand response opportunities.This paper presents DemSi, a demand response simulator that allows studying demand response actions and schemes in distribution networks. It undertakes the technical validation of the solution using realistic network simulation based on PSCAD. The use of DemSi by a retailer in a situation of energy shortage, is presented. Load reduction is obtained using a consumer based price elasticity approach supported by real time pricing. Non-linear programming is used to maximize the retailer’s profit, determining the optimal solution for each envisaged load reduction. The solution determines the price variations considering two different approaches, price variations determined for each individual consumer or for each consumer type, allowing to prove that the approach used does not significantly influence the retailer’s profit.The paper presents a case study in a 33 bus distribution network with 5 distinct consumer types. The obtained results and conclusions show the adequacy of the used methodology and its importance for supporting retailers’ decision making.     

Fostering economic demand response in the Midwest ISO

The Midwest Independent System Operator (MISO) runs the power grid in 14 states and one Canadian province and has a peak demand of some 116,000 MW. Its operational area is richly supplied with reliability-triggered demand response programs such as direct load control of residential appliances and curtailable/interruptible rates for commercial and industrial customers. However, economic demand response programs are lacking. This paper discusses three different ways in which such programs can be introduced in the wholesale energy markets run by MISO. These include, first, an approach in which utilities and load serving entities move retail customers to dynamic pricing and other time-based pricing rates; second, an approach in which these same entities and possibly third-parties bid price responsive demand curves into the wholesale market; and third, an approach in which demand response is bid as a supply resource into the wholesale market.     

Introducing a demand-based electricity distribution tariff in the residential sector: Demand response and customer perception

Increased demand response is essential to fully exploit the Swedish power system, which in turn is an absolute prerequisite for meeting political goals related to energy efficiency and climate change. Demand response programs are, nonetheless, still exceptional in the residential sector of the Swedish electricity market, one contributory factor being lack of knowledge about the extent of the potential gains. In light of these circumstances, this empirical study set out with the intention of estimating the scope of households' response to, and assessing customers' perception of, a demand-based time-of-use electricity distribution tariff. The results show that households as a whole have a fairly high opinion of the demand-based tariff and act on its intrinsic price signals by decreasing peak demand in peak periods and shifting electricity use from peak to off-peak periods.     

Price,environment and security: Exploring multi-modal motivation in voluntary residential peak demand response

Peak demand on electricity grids is a growing problem that increases costs and risks to supply security. Residential sector loads often contribute significantly to seasonal and daily peak demand. Demand response projects aim to manage peak demand by applying price signals and automated load shedding technologies. This research investigates voluntary load shedding in response to information about the security of supply, the emission profile and the cost of meeting critical peak demand in the customers’ network. Customer willingness to change behaviour in response to this information was explored through mail-back survey. The diversified demand modelling method was used along with energy audit data to estimate the potential peak load reduction resulting from the voluntary demand response. A case study was conducted in a suburb of Christchurch, New Zealand, where electricity is the main source for water and space heating. On this network, all water heating cylinders have ripple-control technology and about 50% of the households subscribe to differential day/night pricing plan. The survey results show that the sensitivity to supply security is on par with price, with the emission sensitivity being slightly weaker. The modelling results show potential 10% reduction in critical peak load for aggregate voluntary demand response.     

Households’ self-selection of dynamic electricity tariffs

Offering electricity consumers time-differentiated tariffs may reduce peak consumption if consumers choosing the tariffs are demand responsive. However, one concern is that time-differentiated tariffs may attract consumers who benefit without responding to the price, simply because they have a favourable consumption pattern. It is thus important to understand on which basis consumers choose between tariffs. We model the choice as a function of compensating welfare measures, and use a discrete choice model on data from a residential dynamic pricing experiment. The results indicate that higher demand flexibility will tend to increase the propensity to select dynamic tariffs, while consumption patterns do not influence tariff choice significantly.     

基于广义Leontief函数的峰谷分时电价用户响应研究

基于广义Leontief函数建立了电价替代弹性模型,利用峰谷分时电价用户历史数据求解不同高峰时段电价替代弹性,并进一步分析了替代弹性和高峰时段时长与划分的关系。结果表明,高峰时段较短时替代弹性较大,说明用户对电价响应较好,随着高峰时段的延长,替代弹性下降比较明显,实例亦验证了替代弹性与高峰时段划分的相关性。     

考虑冷热电灵活性负荷需求响应的区域综合能源系统运行优化

 随着能源领域改革的不断深入,引入市场因素引导下的需求响应机制已经成为区域综合能源系统（RIES）发展的必然趋势。  基于RIES中多种能流的耦合特性,同时根据用户的用能特点和需求响应潜力,将参与多种灵活性负荷资源划分为可平移负荷、可调度负荷以及可削减负荷,建立了考虑冷热电灵活性负荷需求响应的RIES运行优化模型。模型以供需双方的经济效益、电负荷峰谷比以及碳排放量等综合评价指标为优化目标,求解得到负荷需求响应方案和各能源网络的优化结果。  算例结果表明,需求响应使RIES的总成本降低了3.70%,电负荷峰谷比降低了29.7%。  验证了文章所建模型的可行性和实用性。     

Industrial customer response to wholesale prices in the restructured Texas electricity market

This paper estimates the demand responsiveness of the 20 largest industrial energy consumers in the Houston area to wholesale price signals in the restructured Electric Reliability Council of Texas (ERCOT) market. Statistical analysis of their load patterns employing a Symmetric Generalized McFadden cost function model suggests that ERCOT achieved limited success in establishing a market that facilitates demand response from the largest industrial energy consumers in the Houston area to wholesale price signals in its second year of retail competition. The muted price response is at least partially because energy consumers who opt to offer their “interruptibility” to the market as an ancillary service are constrained in their ability to respond to wholesale energy prices.     

调峰电价与可中断负荷联动机制研究

在分析传统调峰方式基础上,提出一种调峰交易模式,即调度机构将所有参与调峰的负荷停止用电或减少用电的容量当作一种“电力资源”买入,参与调峰的负荷具有可中断负荷的特性。因此明确提出参与调峰的负荷被认为是可中断负荷,把可中断负荷补偿费视为该“电源”的购电成本。引入一个可中断负荷补偿机制,实现了“电源”买入。在该模式下,应用微观经济学理论,重点提出了分区调峰电价和统一调峰电价2种调峰定价方法,抓住调峰定价的实质,实现了调峰电价调节供需关系,使市场有限资源优化再分配,实现社会效益最大化。该算法适用于我国电力市场改革初期,利用调峰电价调节供需关系,缓解缺电矛盾。     

A stochastic security approach to energy and spinning reserve scheduling considering demand response program

In this paper a new algorithm for allocating energy and determining the optimum amount of network active power reserve capacity and the share of generating units and demand side contribution in providing reserve capacity requirements for day-ahead market is presented. In the proposed method, the optimum amount of reserve requirement is determined based on network security set by operator. In this regard, Expected Load Not Supplied (ELNS) is used to evaluate system security in each hour. The proposed method has been implemented over the IEEE 24-bus test system and the results are compared with a deterministic security approach, which considers certain and fixed amount of reserve capacity in each hour. This comparison is done from economic and technical points of view. The promising results show the effectiveness of the proposed model which is formulated as mixed integer linear programming (MILP) and solved by GAMS software.     

Examination of optimum benefits of customer and LSE by incentive and dynamic price-based demand response

ABSTRACT

The balancing approach of electricity generation and consumption is an essential part of a reliable power system. The mismatch between supply and demand may also cause fluctuation in the power system. This study proposes an incentive and penalty-based demand response (I&P-DR) program for improving the profitability of both LSE and customers. First, we use a parameter that weighs the financial benefits of LSE and customers and provides considerable economic benefits to both sides. Second, an incentive and penalty (I&P) price scheme have been employed to recompense and penalize customers and reduce the electricity demand at peak hours. Finally, the study analyzes the importance of (I&P-DR) and its impact on customers’ sensitivity during peak intervals. Simulation results showed that the flexibility to consumption can be brought through the application of the proposed (I&P-DR) program and also provide the financial benefits to both, customers and LSEs.     

300MW深度调峰循环流化床机组负荷响应特性研究

当下循环流化床(CFB)机组需参与深度调峰、快速变负荷运行,机组变负荷初期的负荷响应速率主要由其汽水侧蓄热特性决定,因此提出了一种亚临界CFB机组汽水侧蓄热定量计算方法。以某电厂300 MW深度调峰CFB机组为例,根据工质特性对该锅炉汽水流程进行分段,结合锅炉设计数据与实际运行参数,分别计算了不同负荷(30%～100%)工况下各段的工质蓄热系数和金属蓄热系数,并考虑汽轮机热效率变化的影响,分析了CFB锅炉汽水侧蓄热利用可持续时间与机组负荷响应特性。结果表明：该机组汽水侧蓄热系数随着负荷的降低而增大,在50%负荷以下的变化较大;考虑机组运行稳定裕度差异后,汽水侧蓄热利用可持续时间随着负荷的降低而减小,机组负荷响应能力显著降低。     

Towards flexible energy demand – Preferences for dynamic contracts,services and emissions reductions

Households’ preferences for attributes of flexible energy demand are not well understood. This paper evaluates Finnish households’ acceptance of hypothetical contracts and services aimed at increasing demand side flexibility. We conduct a Choice Experiment to analyze households’ willingness to offer flexibility through timing their electricity usage and heating; their interest in dynamic pricing contracts such as real-time pricing, two-rate tariffs, or power-based tariffs; and how emissions reductions affect their choices. The results indicate that households’ sensitivity to restrictions in electricity usage is much stronger than their sensitivity to restrictions in heating. Households also require considerable compensation to choose real-time pricing over fixed fees. Furthermore, other value-creating elements besides monetary compensation could incentivize households to offer demand side flexibility because they value reductions in CO₂ emissions at the power system level.