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PG&EPG&E’’s Perspective on s Perspective on Demand Response under Demand Response under the Smart Grid Paradigmthe Smart Grid Paradigm

Kenneth E. Abreu Principal Regulatory Analyst

PG&EMarch 17, 2009

2009 Power Systems Conference & ExpositionSeattle, Wa.

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Outline of Presentation

PG&E’s Smart Energy Web VisionSmartMeter DeploymentPG&E’s 2009-11 Demand Response PlanPG&E’s Demand Response PilotsDynamic RatesDemand Response, SmartGrid and RenewablesSummary

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What is Changing in Smart Grid to Advance DR?

T&D GridWill continue evolutionary change thru technology

Customer Beyond the MeterOld world: no linkage

New World: Lots of linkages

Wholesale MarketOld World: No linkage to retail customers

New World: Linkage all the way thru customer

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TransmissionOperator

DistributedResources

OtherSubstations

DistributionOperator

Load ServingEntity

Substation

ResidentialCustomer

CommercialCustomer

Industrial Customer

Energy infrastructure components

1

Limited communications

capability

2

Limited computing capability

3Today’s Grid

Communications Switching Device

SmartGrid frameworkSophisticated

Immature

Multi-Dwelling

Unit

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Smart Grid Components:Pervasive Sensing Devices

SmartMeter™Electric Meter

Distribution Load Sensor

Appliance-level Electric Usage

Monitor

Grid Premise In the Home

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SmartMeter™Electric Meter

Network AccessPoint

Smart Grid Components:An Advanced Communications Network

Public WirelessNetwork

In-Home Network

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Smart Grid Components:Robust Computing Capability

Both centralized and distributed

110,000 gigahertz of processing capability

65,000 gigabytes of stored data per year

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TransmissionOperator

DistributionOperator

Load ServingEntity

Substation

Sensor Advanced ComputingSmart Switching DeviceCommunications

Future Smart Grid SmartGrid frameworkDetail on next page

OtherSubstations

ResidentialCustomer Multi-

Dwelling Unit

IndustrialCustomer

CommercialCustomer

DistributedResources

Microgrid / sustainable communities

EnergyStorage

Advanced applications

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Comprehensivecommunications

capability

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Distributed computing

3

Increased capacity and flexibility (e.g.

bidirectional flow) of energy infrastructure

components

1

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DistributedGeneration & Storage

SmartEnd-Use Devices

Plug-InHybrids

AdvancedMetering

Consumer Portal& Building EMS

Internet

Renewables

Efficient BuildingSystems

Photovoltaic / solar

ControlInterface

Smart Grid Customer Opportunities

Plug-InHybrids

AdvancedMetering

Photovoltaic / solar

DistributedGeneration & Storage

Information exchange

Single home example

Multi-Dwelling Unit example

Informati

on exch

ange

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A little more detailAll systems are interdependent. New systems must consider how they need to communicate across systems in a distributed way

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Smart Grid Vision

We do not need to define the end stateDefine a minimum base set of architectural boundariesLegacy systems migrate into these overtime as much as possibleOvertime we evolve into PG&Es SmartGridOpen Standards are key to Smart Grid:

Without open standards a SmartGrid will not be achievedWithout industry compliance a SmartGrid will not be achieved

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Automated meter reading

10 Million meter upgrades

A network to collect meter reads remotely

Frequent meter reads - daily for gas, hourly or 15 minute interval for electric

Enables demand response rates and customer home/premise automation

Enhanced capabilities over time

The PG&E SmartMeter Program

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SmartMeter Upgrade Technology

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5,000

7,000

9,000

11,000

13,000

15,000

17,000

19,000

21,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Electric Demand Is Seasonally Variable

MW

s

PG&E Peak LoadJuly 25 @ 1700 hours

2006 Annual Usage

15

20

30

35

40

45

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

CA

ISO

Ele

ctric

Dem

and

in G

igaw

atts

(GW

)

AM PM

Typical Summer Demand

Electric Demand Varies Significantly Over The Course Of Each Day

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Utilities Must Maintain Enough Generation To Supply Peak Demand

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Peak Generation Capacity Sits Idle Much Of The Time

Source: California Independent System Operator Corporation

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500

MW

Hours per Year

Last 25% of capacity needed less than 10% of

the time

Last 5% (2,500 MW) needed less than 50 hours

per year

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Smart Grid EnablesAutomated Demand Management

Home Area Network communication

SmartMeter communication

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Automated Demand Management Generates Negawatts

Martinez, CA office building electricity use with and without automated demand response, June 21, 2006

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PG&E’s 2009-11 Demand Response Plan

Several price responsive programs are included in PG&E’s program.DR Service Provider (Aggregator) programs are a major and growing part of the DR portfolio.Emergency programs will continue to be an important part of PG&E DR programs as well.Auto DR is a program that provides for an automated system to signal customers Energy Management Systems to initiate a DR event. This program has been successful for PG&E in the past and it is planned for growth. Automation is a key to significant, reliable, cost–effective DR.

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2009-2011 Major DR Trends

Integration of DR with MRTU

Integration of DR with Energy Efficiency and Distributed Generation

Integration of DR with Smart Meter, HAN and future Dynamic Pricing Tariffs

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2009-11 growth (per filing)

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1 2 3

Peak Choice BEC CBP

DWR Large CPP Demand Bidding (DBP)

Aggregator Managed Portfolio (AMP) Small Customer Price Triggered Program (AMI) BIP

A/C Cycling

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DR pilot projects

PG&E is planning two Ancillary Services (AS) pilot projects.

Also two pilots to help with integrating renewables:

Also a pilot on aggregating small commercial/industrial customers'

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Ancillary Services (AS) pilot projects

One for Commercial & Industrial (C&I) customers that is targeted for summer of 2009

3 to 4 sitesTelemetry at each siteAuto DR technologyBid AS to CAISO market

Residential air conditioning customers in our DR program provide a potential AS product.

2 climate regions3 feeders eachEach feeder has different technologyVisible to CAISO at feeder level

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Pilots to help with integrating renewables

Provide regulation/load following using distributed storage.

Refrigerated Warehouse (thermal)Batteries (electric)

Plug-In Hybrid Electric Vehicle (PHEV) and Electric Vehicle Smart Charging pilot projects will be an additional pilot.

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Home Area Network

AMI/SmartGrid

Time-shifting Electricity

GW

hSmart Grid EnablesElectric Vehicle Smart Charging

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Electric Vehicles (EV) – Potential major Advancement

Old Rules“Electricity can’t be stored economically – so generation must meet load in real time”

EVs could change this rule and thus the nature of the grid

The storage is now “paid for” by someone else.Possible charging and discharging to signals

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Dynamic Rates

A recent CPUC decision on Dynamic Rates will have all non-residential customers eventually defaulted into a DR program by 2011-12. The decision includes the implementation of Real Time Pricing for major classes of customers.

Initially the CAISO day ahead prices will be utilized to determine these rates.

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33% Renewable Portfolio Standard by 2020!

Smart Grid Necessary for Integrating Renewable Energy into the Grid

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Wind Is Highly Variable And Difficult To Predict

0

100

200

300

400

Meg

awat

ts

500

600

700

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

−Average

Each Day is a different color.

−Day 29

−Day 5−Day 26

−Day 9

Source: Cal ISO

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This Variability Can SeriouslyThreaten Reliability

Texas, February 2008

Wind generation dropped from1,700 MW to 300 MW (~80%)

Required demand curtailment of 1,100 MWin 10 minutes

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Summary

SmartGrid and Smart Meters will open up more opportunities for Demand ResponseTransparent wholesale markets will further expand DR opportunitiesDR as AS has potentialDR may allow more renewables into gridThe ability for communications and control linkages between customers and both the T &D grid and wholesale market creates major new opportunities for DR.