Roundtable 2: Energy Efficiency and Demand Management · Roundtable 2: Energy Efficiency and Demand...
Transcript of Roundtable 2: Energy Efficiency and Demand Management · Roundtable 2: Energy Efficiency and Demand...
Roundtable 2:
Energy Efficiency and Demand Management
• What experiences can serve as best practice examples to
manage demand?
• Which policies are most effective in pushing their employment?
ALEXANDRA LANGENHELD | WASHINGTON, 10.12.2013
Facilitated discussion – regulatory aspects and
market models
• Brief presentation of Agora Energiewende and our activities on
demand response
• Brief introduction to the topic and kick-off discussion on demand
response
• Wrap-up and key take aways energy efficiency and demand response
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Electricity Transitions in Europe and the United States – Demand Response
Agora Energiewende – a Snapshot
• Agora Energiewende: a Berlin-based Energy Policy Think Tank, working to enhance
the German Energiewende, led by former secretary of state
• Our ultimate goal: to support decision-makers to set the course towards achieving
Germany´s long-term energy targets through convening dialogues and commissioning
research
• We are driven by the question: What concrete legislation, initiatives or measures are
required to make the Energiewende a success in Germany
• We are independent and non-partisan
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Electricity Transitions in Europe and the United States – Demand Response
Agora Energiewende – a Snapshot
• A key component is our Council of Agora: a high level group of stakeholders that
meet regularly under Chatham House Rules and engage in constructive dialogue on
fundamental elements of the Energiewende
• Members include: Ministers, Vice-Ministers, Parlamentarians (German and European),
presidents of Federal Regulator (Bundesnetzagentur) and Federal Environmental
Agency (Umweltbundesamt), CEOs from energy intensive industry and many more
multiplyers and decision-makers
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Electricity Transitions in Europe and the United States – Demand Response
Key Decision Makers Come Together
in the "Council of Agora Energiewende"
German
Government
Federal
States
Government
European
Union
National
Authorities
Labour
Unions
Environ-
mental NGOs
Consumer
Protection
Grid
operator
Energy
Intensive
Industry
Renewable
Energy Industry
Energy
Utilities
Municipal
Research
Franz Untersteller, MdL (Grüne)
State Minister for Environment, Climate and
Energy, Baden-Württemberg
28 Members
Hildegard Müller Chair of the executive board
German Association of Energy and
Water Industries (BDEW)
Prof. Dr. Ottmar Edenhofer
Deputy Director, Potsdam-Institute for Climate
Impact Research (PIK)
Director Mercator Research Institute on Global
Commons and Climate Change (MCC)
Matthias Machnig (SPD)
State Minister for Economy,
Employment and Technology,
Thüringen
Lothar Schulze
Boardmember,
Windwärts Energie
GmbH
Dr. Martin Iffert CEO,
Trimet Aluminium AG
Boris Schucht CEO,
50Hertz Transmission GmbH
Mechthild Wörsdörfer EU-Commission, Head of Unit Energy Policy,
Directorate General Energy (DG ENER)
Stefan Kapferer (FDP)
State Secretary, Federal Ministry for
Economy and Technology
Jochen Homann President, Federal Network
Agency (German
Regulator)
Jürgen Becker (CDU) State Secretary, Federal Ministry for Environment,
Nature Protection and Nuclear Safety
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Electricity Transitions in Europe and the United States – Demand Response
Agora Energiewende – our activities on
demand response
• In Germany´s energy system of the future, the potential for demand response must be
leveraged to have the greatest possible impact:
German Energiewende: carbon-neutral economy by 2050, phase-out of nuclear by
2022 in combination with ambitious targets for renewables and efficiency – „it´s all
about wind and solar“!
Flexibility challenge: coordination of wind and solar power production with rest of
the power system, esp. fossil power plants
Demand response to make a clean and cost-effective contribution to maintain system
balance – but the „right policy architecture“ still needs to be created!
• In order to fully benefit from the opportunities for flexibility and help to create the
necessary regulatory and organizational framework, Agora Energiewende is working on
the following key questions:
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Electricity Transitions in Europe and the United States – Demand Response
Agora Energiewende – our activities on
demand response
1. What economic potential is there for load management to adapt demand to the
fluctuating power generation from wind and sun?
The cost-benefit ratio of options for shifting demand varies greatly. Load management
should therefore first be implemented in sectors with highest potential, such as
industry, and those regions that are increasingly affected by power plant or grid
congestions – in order to balance out temporary regional electricity shortages or
surpluses. Agora Energiewende has currently a project in the works to identify
potential and costs of demand response in the context of the specific situation of
southern Germany (power system reliability under stress due to nuclear phase-out,
adequacy challenge, transmission challenge).
Key questions and set-up of case study:
Contribution of load management to reducing peak demand in southern Germany
Focus on industrial and commercial processes
In a first-ever undertaking: analysis of potential, costs, barriers and necessary
economic incentives for the south
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• On behalf of Agora Energiewende, project director:
Alexandra Langenheld, [email protected]
• In cooperation with Ministries of the Environment of Baden-Württemberg and Bavaria
• Authors: Fraunhofer ISI and Forschungsgesellschaft für Energiewirtschaft
• Supported by industry and trade associations, electricity utilities, network operators and regulators
• Download under: http://www.agora-energiewende.org/topics/efficiency-and-load-management/
• Follow-up: Pilot activities and National DR Action Plan, as study had major impact on discussion on national level on future market design
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Electricity Transitions in Europe and the United States – Demand Response
Case Study: Load management as a way of
covering peak demand in southern Germany
Agora Energiewende – our activities on
demand response
2. Under what conditions can the potential of load management best be tapped?
In a first step to improve Germany´s current framework for load management, Agora
Energiewende is examining various existing regulations and mechanisms, such as for
grid tariffs and ancillary services, as well as prequalification criteria and conditions for
bidding.
3. What does a future market design for load management look like?
The existing energy-only market sends insufficient signals to make load management
an equivalent alternative to generation. Looking ahead we want to contribute to
creating a market model that allows participation by consumers in market activities.
What kind of economic incentives are necessary to reap the benefits and what does a
future market design look like?
How need the rules of the electricity market be changed, that allows for a non-
discriminatory market access for demand-side resources to actively participate?
We can learn from US experience!
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DR in California and Germany: lessons to learn
from each other´s experience
• Workshops with CEC, CPUC, CAISO, PG&E, SMUD, EnerNoc, UC Berkeley, LBNL,
Stanford University and other stakeholders and observers of Californian and US
American electricity market, October 2013
• Discussion on regulatory and organizational framework for demand response
• Facilitated by German Consulate in San Francisco under Transatlantic Climate Bridge
• In cooperation with Institute for Applied Sustainability Studies and German Environment
Ministry
• Follow-up: both states eager to unlock their respective DR potentials and to get more
participation of DR to deal with more frequent and shorter events; moment for
cooperation timely as policy/rulemaking currently ongoing in CA and DE
Transatlantic Strategic Dialogue of Worldwatch Institute
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Facilitated discussion – regulatory aspects and
market models
Why care?
1. Consumer revenue:
In the US over 2 billion Euros direct revenues from DR (bill savings, avoided
investments, primarily within balancing, capacity markets)
Source of revenue could also be made available in Europe!
2. System benefits:
Several benefits to electricity system: increased efficiency of asset utilization,
supporting greater penetration of renewables on the grid, easing regional capacity/
congestion issues, reducing required generator margin and costs of calling on
traditional reserves, including associated environmental benefits
System benefits could be made available in Europe, too!
3. Increased efficiency:
In the US 29.5 GW of demand-side resources under control and available to market
participants, reducing need for peaking plants and increasing efficiency; Canada,
Australia, South Korea, Japan also have significant levels of participation
Resource could also become available within European markets!
(SEDC 2013: A Demand Response Action Plan for Europe)
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Facilitated discussion – objective of this
roundtable
• To discuss overarching guiding principles for market participants and policy makers as
they gradually re-design the electricity market regulation in a way that accounts for
requirements of enabling demand response and other flexibility resources:
Key question being: How to fully open electricity markets to consumer
participation, that allows for a non-discriminatory market access and demand-side
resources to actively participate as an alternative to generation?
• Three major components (SEDC 2013):
1. Comparable access to markets
2. Comparable compensation
3. Fair and reasonable risk management
• Guiding questions:
1. What experiences can serve as best practice examples to manage demand?
2. Which policies are most effective in pushing their employment?
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Facilitated discussion – sub-questions/
icebreakers
• What do you see as the main opportunities and benefits for demand-side management in
existing/future markets and for the grid?
• What do you see as the main barriers and challenges (e.g. regulatory/legislative, market, economical,
technical) to reaping the benefits?
• What experiences can serve as best practice examples for demand-side management and which
policies do you see as most effective in pushing their employment (EU/US)?
Are additional enabling policies necessary and would they be justified (premium price/floor price,
quote for DR)?
Is a generic product sufficient or is market segmentation necessary?
Should the characteristics of a DR program be adapted to the different limitations of DR resources?
Which parties should be able to aggregate loads and bid them into the markets (capacity, ancillary
services, …)?
Should the contractual relationships for DR providers be standardized by law?
• In what way will the implementation of the EU Energy Efficiency Directive affect your
organisation/involvement with demand-side management?
• Have you undertaken/ are you aware of studies examining the cost-benefits of demand-side
management measures (for your country or for your organisation), and/or their cost-effectiveness
relative to other flexibility measures?
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80
60
40
20
Mo Di Mi Do Fr Sa So
GW
Demand
Photovoltaic Hydro
Fossil Power Wind Onshore/Offshore
Biomass
Demand: ~80 GW
Wind: ~4 GW
PV: 0 GW
• In 2022, 15-25 GW
controllable resources are
needed which operate
less than 200 hours per
year
• Open cycle gas turbines
can meet this demand
cheaply (35–70 million
EUR per GW and year)
• Demand-side measures
will further reduce costs
Electricity Transitions in Europe and the United States – Demand Response
Illustration of Challenges of Securing Supply in
times of Peak Demand, November 2022, DE
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Questions or Comments? Feel free to contact me:
Agora Energiewende
Rosenstraße 2
10178 Berlin
Agora Energiewende is a joint initiative of the
Mercator Foundation and the European
Climate Foundation.
T +49 (0)30 284 49 01-08
F +49 (0)30 284 49 01-29
www.agora-energiewende.de
Thank you for your attention!
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