Making the Demand Side a Real Resource One that Grid Operators Can Rely Upon Chris Hickman Founder & CEO Innovari, Inc 21st Century Electric Grids

History of the Demand Side Change has been slow and evolutionary Concept did not keep pace with technology, new technology enabled a new future for DSM and nobody seemed to notice Industry lost sight of the original goal as they struggled to evolve programs

History: Learn from others what has and has not worked In the U.S. and Europe, DR is still used as an “emergency not as a “grid” resource. DR programs designed to operate for <80 hours/year. DR typically called <20 hours/year ADSM: A 438+ hour/year resource, two way, verifiable by Grid Operator, real-time ADSM: Not one-way, not 80 hours, not seasonal, not emergency only use In the U.S., great things have been accomplished: But the net result related to the Root Cause Problem of our Industry, the system load duration curve, is WORSE. Yes, it is worse now than it was 25 years ago. Grid is “peakier”, causing reliability issues, price separation from peak to base load and other economic problems and stability issues for utilities and consumers The wrong metrics are being used, it’s not about “sign ups” in a program, it is about whether or not we are solving the problems we set out to solve. Great things: EE Deferral or Elimination of Peak Power Plants Emission Reductions Full deployment of SCADA AMI/AMR

Consultants View of Demand Side Programs This report shows statistically valid sample results to prove the concept could work Behavior modification has been shown to work and is sustainable for extended periods in our studies Demand Response has been incredibly successful in the U.S. with PJM and California showing everyone how to create successful programs Time of Use rates will solve everything . . . (but we need 2.5x-3x separation of peak to off peak rates) To enable the demand side, the bar has to be lowered on technical requirements for communications and dispatch

Power System Operators View of Demand Side Programs If I can’t see it and control it, it doesn’t exist If your program is so successful, why doesn’t my Load Duration Curve ever change? You want me to bet the reliability of my grid on “behavior modification”? And that this behavior modification will last for 20 years? Do you know my kids? My life is governed by seconds, not hours, days or months. Give me what I need in real-time or it isn’t real. Meet the rules of the road that exist now versus creating entirely new sets of rules that lower the bar for the DSM/DER resources.

Understanding the Problem Need to define the problem to be able to fix it It’s not just peak, it is total system utilization It requires more than 40 or 80 hours to resolve It requires two way communication, verification and control room access to resolve It requires distributed solutions to balance; central station resources will be unable to effectively balance distributed resources Utilities are the stewards of the public good we call a grid and must have dynamic solutions to help them manage in this challenging new world

Understanding India India is unique, it has shown the ability as an entire nation to leapfrog generations of technology. With significant growth comes a great opportunity Renewables penetration will eclipse the rest of the world National Electrification underway National Smart Grid Framework is the best in the world – follow it Enabling Demand Side crucial

Understanding India’s Future India is poised to perform its second ‘leapfrog’ as a nation. Like with telecom, India can now create the worlds most efficient and cleanest power system while electrifying their nation.