In its 2011 Annual Markets Report, ISO New England – the operator of the region's bulk power system and wholesale electricity markets – analyzed the state of competition within New England's wholesale electricity markets, and concluded that electricity prices fell last year due to lower natural gas prices, lower electricity demand and greater use of renewables.

"Natural gas-fired generation set the electric energy price in most of the hours in 2011 and natural gas prices declined by 4.5 percent. As a result, energy prices also fell, by 6 percent," said David LaPlante, vice president of market monitoring. "The average total cost of wholesale electricity – electric energy, capacity, and reserves and other ancillary services – fell by 10 percent."

The group's annual market report sought to determine whether the wholesale electricity markets are operating competitively and efficiently, and ensures it is following market fundamentals.

ISO also said that demand was lower last year due to milder weather. However, in the case of strong demand fluctuations in the future, demand response programs are in place to curb peak load. 

FuelFix reports that ERCOT, which has a customer base of 23 million people across the Lone Star State, announced earlier this month that it is looking to restore 2,000 megawatts of power from power plants that have until recently been idle. The announcement came as the company said it expects electricity demand to surge in Texas in the near future.

However, even with a boost in generation, grid operators in Texas say there is still a "significant chance" they will be forced to issue emergency alerts that will aim to scale down customer's energy use during peak daytime hours, according to the news source.

But that's better than issuing rolling blackouts, as was seen in the intense heat of last summer. By reaching a total of 74,000 available megawatts of generation, the grid operator says it will have more than enough power to meet the expected demand for 67,500 megawatts. Still, there is always the chance of unplanned power plant outages that could cause severe disruptions, the media outlet stated.

ERCOT even displayed such positive expectations last May, only months before rolling blackouts struck parts of Texas.

"We expect to have enough generation resources to exceed peak demand by 17.5 percent this summer – surpassing the 13.75 percent threshold set by ERCOT for reliable operation of the electric grid in case of major outages or unusual temperatures extreme," said Kent Saathoff, vice president of grid operations and system planning.

Shortly after his statement, drought conditions in Texas and a record number of days above 100 forced multiple North Texas plants to lower their power generation when its supply of cooling water dropped precipitously. But such a summer of intense heat isn't likely to occur again, according to the National Oceanic Atmospheric Administration.

Last summer, demand response programs made a significant impact during peak load times, which helped curtail energy consumption at factories and businesses by lowering the amount of energy sent to those participating in the programs. By lowering peak demand on a broad scale, utilities were able to avoid or shorten rolling blackouts. 

Titled U.S. Smart Grid Network Management Systems, the report found that the growth will mark a 21 percent increase from the $225 million that was spent on such systems in 2012.

In the current U.S. electric infrastructure, 30 million smart meters have been deployed that give electric customers never-before-seen ways to manage, monitor and control how much electricity their home and appliances consume. The new smart grid technologies that have been developed will also allow utilities to establish communication networks that offer real-time monitoring of the state of their transmission and distribution systems.

These systems will outfit utilities with the technology to keep outages times to a minimum, and will also give rise to more two-way communication programs, such as demand response, to develop between utilities and businesses and homes. As these systems are adopted on a large-scale basis, companies will need to integrate network management systems to better control all new technologies.

The report also includes a question and answer session with Andres Carvallo, executive vice president of Proximetry, in which he discusses how network management systems are being influenced by new technological trends, such as cloud computing.

The report found that there will be major improvements in the network management system in the next five years. In this period, management of utility-level networks will be the predominant driver of the market. But beyond the first five years, the report predicts that network solutions that enable the integration, connection and management of consumer-level devices will be the most influential factor among the top utilities in America.

"The significant number of renewables, electric vehicles and energy storage devices to be deployed into the near future introduces new complexity and a multitude of networking technologies, protocols, and standards to manage them all," said Carvallo.

Such systems will be necessary as more electric consumers – especially businesses – opt to take part in demand response programs, which have been developed to help curtail electricity consumption during peak load. The system relies on two-way communication between utilities and customers, and involves incentives for users to allow utilities to remotely control a participant's electricity consumption. 

The request was announced during a weekly radio broadcast at 11 a.m., but was heard by very few, as most New Yorkers were away from their radios during the Mayor's address. According to GreenTech Media, the plan hardly had the effect the Mayor's office had hoped.

However, if such high temperatures return again this summer, New York City will be prepared to battle peak demand with an army of 10,000 new demand response installations. Although it is only a fraction of the 6 million units utility ConEd plans to deploy, the systems will be introduced to appliances that are the most energy-draining – window and wall air conditioning units.

The utility will outfit window units in a number of large apartment buildings with the new technology, which will give ConEd the ability to control the room's A/C unit remotely. Although the utility will receive applications from residents in New York City's five boroughs, it will focus mostly on areas of the city where demand has historically surged highest, the media outlet stated.

New York is no stranger to demand response (DR), though, and has seen great success in lowering peak demand with the technology. Currently, the city has 34 megawatts of DR from 25,000 customers with central air conditioning. The newest voluntary DR program will lower peak load by 5 megawatts, adding to the city's total enrollment of 500 megawatts of its demand response programs.

Residential DR is still emerging from its nascent stage for most companies around the country, however early pilot programs have proven the method is tremendously useful for lowering heavy demand. For example, Oklahoma Gas and Electric is installing DR in 150,000 homes in the next few years as it prepares to slash peak demand in response to new power generation. Oklahoma Gas and Electric is one of many utilities that have offset the cost of upgrades by adding DR to homes, as it is much cheaper than new power plants or other smart grid additions.

The latest pilot program in New York indicated residents saw an average 26 percent savings across 500 A/C units during peak times, such as last year's heat wave. Participants in the program will receive all equipment for free, as well as $25 in compensation for allowing the utility to control their AC remotely during peak load times.

Adrienne Ortizo, program manager for the program, said 1,300 applicants have signed up for the program so far. ConEd is also speaking with property managers and building tenants across the city to reach the 10,000-unit target by mid-June, before the intense summer heat begins.

According to the New York Times, last year's heat waves gave many utilities the opportunity to try out demand response systems. The programs resulted in many homes and businesses to experience higher thermostat settings, lower lighting and inactive pumps and production lines, helping to stave off even more costly power outages.

"To be quite frank, it's imperative that those resources are there and able to perform," said John Moura, manager of reliability assessments at the North American Electric Reliability Corp.

Mourta added that to his knowledge, "everything performed as expected. I think we all agree it was significant."

AMERICAN-STATESMAN STAFF

Published: 8:20 p.m. Friday, May 4, 2012

When Central Texans flip a light switch, within four seconds the manager of the state’s primary electricity grid automatically sends a price signal ordering more power.

“Electricity is the ultimate just-in-time delivery,” said Warren Lasher, director of system planning for the Electric Reliability Council of Texas, which manages the grid serving 85 percent of Texans.

Maintaining that almost instantaneous balance between supply and demand is a challenge for a competitive wholesale electricity market facing the prospect of dwindling power reserves in the future.

State officials can’t just order power plants to be built; they must create an environment that encourages investors to build adequate generation or consumers to use less during the summer season’s peak demand.

That was the topic at a Gulf Coast Power Association conference Friday in Austin.

Faced with tighter electricity reserves, the Public Utility Commission is weighing whether to raise the cap on wholesale prices — currently at $3,000 per megawatt-hour — to $4,500 in August and up to $7,500 by next year.

Donna Nelson, the commission chairwoman, said that it’s clear to her that the $3,000 cap is too low but that she’s not sure what the right price should be to encourage construction of new generation plants.

“We want to hit that sweet spot where we have enough electricity, but our prices remain competitive with other states,” Nelson told the industry audience.

To get by this summer, ERCOT is relying on 2,000 megawatts from power plants that had been mothballed in the past.

Some speakers Friday offered alternatives to just building more generation plants.

“Texas has not pushed very hard to see what we could do with energy efficiency,” said Bob King, president of Good Company Associates in Austin. “Some of us think of energy efficiency as generation.”

The Legislature addressed the issue last year, but King said the legislation won’t accomplish what some lawmakers thought it would.

“What they ended up doing — whether they understand it or not — was capping energy efficiency,” King said.

Laurie Wiegand-Jackson, president of North American Power Partners, said other parts of the country do more than Texas to encourage consumers to reduce their demand for electricity.

She said PJM Interconnection, a regional transmitter of electricity in the Northeast, has reduced electricity demand by 10,000 megawatts by paying consumers to cut back during peak demand.

She said it is critical that ERCOT changes its rules to give consumers in demand-response programs more notice than 10 minutes. She said two hours would encourage more participation.

“High price alone does not generate demand response,” she said.

Tom Pierson, president of TAS Energy, said thermal technology would make the state’s gas turbines more efficient during the summer.

He said the season’s hot temperatures reduce the turbines’ efficiency by up to 20 percent.

“Right when you need the most power is when gas generation is reduced by the heat,” Pierson said.

His company’s technology chills water at night when electricity demand is low and stores it in a thermal tank. Then the chilled water cools the air going into the gas turbines during the heat of the day, improving

the efficiency.

“Another 2,500 megawatts could be available without building another generation plant,” Pierson said.

Contact Laylan Copelin at 445-3617

Find this article at:

http://www.statesman.com/business/state-electricity-officials-weigh-supply-concerns-ahead-of-2340810.html

Renew Grid News reports that the federal oversight agency recently proposed amending current regulations. FERC officials affirmed their support for the incorporation of business practice standards that the North American Energy Standards Board has recommended. The rules would affect utilities, and they would shift the ways in which demand response and energy efficiency resources are measured and verified, according to the news provider.

Moreover, FERC said that adopting the measures would help improve the methods and practices used to accurately measure demand response and energy efficiency initiatives. Demand response resources have played an increasingly important role in the functionality and reliability of the nation's electric grid, and the proposed regulations would help ensure their continued adoption, backers say.

On a more granular level, the proposed measures would shift standards in areas such as meter data reporting, advanced notification, telemetry and meter accuracy. Still, though FERC is endorsing the rules, it does not necessarily mean they will ultimately be passed. The federal oversight agency is currently seeking comment on the proposed measures, and will weigh opinions from supporters and critics before making a final decision.

The Wall Street Journal reports that the state would allow Sempra Energy, Pacific Gas & Electric and Edison International to spend $454 million in demand response systems over the next three years. The three power providers, like those elsewhere in the U.S., are increasingly reliant on such systems, according to industry experts.

Demand response systems essentially help utilities prevent power grid disruptions by proactively forging agreements under which energy users curb usage during times of peak electricity demand. In California, utilities use demand response resources to help prevent power supply disruptions, especially during the summer time.

State regulators in California said they approved the measure because augmenting demand response systems allows utilities to forego new power plant construction projects, as they improve energy efficiency and help balance supply and demand on the electric grid.

PG&E plans to spend $192 million on demand response resources over the next three years. Officials at Southern California Edison said the company would spend roughly $196 million, while San Diego Gas & Electric will spend $66 million.

Conducted by Pike Research, the new study states that gas and water utilities have long used public cellular networks as a means of linking field devices to their central operating systems. Power providers are increasingly working to do the same, according to the report's findings, a move that will have far-reaching repercussions over the coming years.

Electric utilities have previously been unable to access such cellular networks, experts say. However, Pike's latest research report's findings suggest that utilities and other power providers are increasingly tapping into the nation's cellular networks as they expand their smart grid offerings.

Pike Research vice president Bob Gohn said new data indicates that the global annual service revenue from public cellular network nodes in smart grid applications will reach more than $1 billion by 2020. That figure represents a compound annual growth rate of 27 percent between 2011 and 2020, according to Pike's report.

"Carriers and integrators have awakened to the unique opportunity of the smart grid. It is no longer just another general vertical market application," he said in a statement. "With new pricing and service offerings specifically tailored for the large number of endpoints but relatively low aggregate data volume typical of grid applications, public cellular is becoming a real competitor to private utility-owned networks. The end result is a significant and growing monthly stream of revenue to the carrier, without taxing the carrier’s network resources."

Pike's report, "Public Carrier Networks for Smart Grids," states that utilities in the European Union are also helping drive the adoption of cellular networks within the sector. The EU's 20-20-20 mandate is effectively driving companies to pursue such a route, according to industry experts. U.S.-based firms, meanwhile, are also ratcheting up their own efforts to more readily tap into cellular networks.

The report projected, moreover, that a cumulative total of 73 million cellular M2M communication nodes would be shipped for use in smart grid applications between 2011 and 2020. Experts said the uptick in cellular network use underscores how utilities and other power providers are embracing cellular networks as a means of more effectively implementing smart grid strategies.

Overall smart grid investment is also expected to increase significantly over the course of the next decade.

Officials from LonMark International and OpenADR said this week that commercial buildings would soon be able to more readily connect to the smart grid as a result of the partnership between the two organizations. Businesses and other energy users have had difficulty in the past connecting to fledgling smart grid architecture throughout the U.S., but officials from the two groups said they are actively working to improve the efficiency of the process.

"In order for buildings to benefit from OpenADR they must have automated control systems that can be programmed to respond to price and DR event signals without negatively impacting comfort or productivity," OpenADR Alliance board member Girish Ghatikar said in a statement. "Having access to energy management systems based on technology like LonMark standards can help people better manage their energy consumption."

LonMark allows buildings connected to the smart grid to utilize new enhanced strategies to improve energy efficiency and performance, according to officials. Experts said the new strategic alliance would help bolster efficiency initiatives, especially among large-scale energy users.
 

Officials from LonMark International and OpenADR said this week that commercial buildings would soon be able to more readily connect to the smart grid as a result of the partnership between the two organizations. Businesses and other energy users have had difficulty in the past connecting to fledgling smart grid architecture throughout the U.S., but officials from the two groups said they are actively working to improve the efficiency of the process.

"In order for buildings to benefit from OpenADR they must have automated control systems that can be programmed to respond to price and DR event signals without negatively impacting comfort or productivity," OpenADR Alliance board member Girish Ghatikar said in a statement. "Having access to energy management systems based on technology like LonMark standards can help people better manage their energy consumption."

LonMark allows buildings connected to the smart grid to utilize new enhanced strategies to improve energy efficiency and performance, according to officials. Experts said the new strategic alliance would help bolster efficiency initiatives, especially among large-scale energy users.