Demand Response for System Operation in Spain. 23th June 2011

2 Overview of the presentation n Who is REE? n Spanish energy context n The challenge of the Demand Side Management n Demand Response experiences n Conclusion

3 Who is Red Eléctrica de España? Red Eléctrica was the first company in the world dedicated exclusively to power transmission and the operation of electrical systems. A pioneer in its field, the company occupies a position of leadership today in these activities. Red Eléctrica is the first European TSO establishing a Demand Side Management Department in coherence with its commitment of the development of a smarter electric grid adapted to the next decade challenges Red Eléctrica is the Spanish transmission system operator (TSO)

4 TSO functions Spanish electric system. TSO functions:  To ensure the security and continuity of power supply, keeping the instantaneous balance between generation and demand.  To design, develop and maintain transport network. Hydro generation Wind power REE Control centre Thermal generation Transport network Distribution network Distribution substation Transport substation Residential consumption (low voltage) Industrial consumption (high voltage)

5 Overview of the presentation n Who is REE? n Spanish energy context n The challenge of the Demand Side Management n Demand Response experiences n Conclusion

6 Energy context The 20/20/20 European Strategy is the key driver of the Spanish energy model change 20 / 20 / 20 Strategy 20% reduction in primary energy consumption 20% of final energy coming from renewables 20% reduction in GHG emissions  Renewable energy development and efficiency improvement involve a reduction in GHG emissions.  Renewable energy integration in the electric system leads to an improvement in the system global efficiency.

7 Towards a new energy model Fulfilling European objectives need a change in order to move to a new energy model. Huge use of renewable energy Distributed generation near end users Electric vehicle Energy storage Fossil fuels cleaner use Demand side management

8 Spanish energy context Spanish electric system is still dependant on fossil fuels, but presents a continuous introduction of energy coming from renewable sources generation share Combined cycles, nuclear and wind were the most used technologies in In recent years has increased the participation of wind and combined cycles, basically at expense of production based in coal. Spanish generation share evolution

9 Overview of the presentation n Who is REE? n Spanish energy context n The challenge of the Demand Side Management n Demand Response experiences n Conclusion

10 The challenge for the system operation As a TSO, Red Eléctrica manages a daily load shape which presents high ratio peaks vs off- peak demands. Low demand level High wind energy production High ratio peak vs off-peak On some occasions wind production is curtailed, when demand is very low and interconnection capabilities are very limited 1 2 2

MW where needed in 2010 only for the 300 hours with higher demand Challenges caused by the evolution of electrical demand

12 High growth for the installed wind and solar power in the next years MW wind power MW solar power Renewal energies in 2016 Evolution of the wind power instalated The challenge for the system operation

13 What does it means Demand Side Management? Demand Side Management (DSM) means the planning and improvement of measures aiming to impact in the way that energy is consumed, with the objective of changing the demand load shape

14 DSM measures High demand on off peak  Pumping  Future storage technologies  Electric vehicles  Time of use tariff  Demand participation in electricity markets  Improvements in the efficiency of products and processes  Increasing public awareness of energy efficiency  Industrial Demand management: Interruption Service  Automated management of electrical loads Demand reduction Movement of demand from peak to off peak Demand reduction on the Electrical System peak hours

15 Four drivers are essential to change the load shape Information 1 Key elements to drive the DSM challenge  “We cannot change what we do not know”  Dissemination of energy efficiency best practices  Need to apply time of use prices to make the final consumer sensitive to the real cost of energy and when this energy is consumed  Automation that allows the implementation of DSM measures (Home automation, Smart Grid, network driven DSM,…)  Clear objectives  Minimum regulatory framework that allows the development of energy efficiency – oriented markets Prices 2 Automation 3 Regulatory

16 Overview of the presentation n Who is REE? n Spanish energy context n The challenge of the Demand Side Management n Demand Response experiences n Conclusion

17 <15 min Fuente: Measurement, Verification, and Forecasting Protocols for Demand Response Resources. NARUC-FERC Demand Response Collaborative 17 Demand Response products, can be used not only to solve secutiry issues but also to help the energy efficiency of the whole system Demand Response Other DSM activities Long term operational planning Day-ahead economic scheduling Day-of economic dispatch < 15 min DSM

18 DR services are normally calssified in two groups attending to mechisms used to promote the response 18  Direct Load Control (DLC)  Interruptible/curtailable rated (I/C)  Demand bidding/Buy-back programs (DB)  Emergency Demand Response Programs (EDRP)  Capacity Programs (CAP)  Ancillary Services markets program (A/S)  Time-of-use (TOU)  Critical peak pricing (CPP)  Real-time pricing (RTP) Incentive-based ProgramsTime-based rates This programs relies on incentives to the reduction on the demand in addition to the electric tariffs which can be variable depending on time or not. The load reduction happens when the operator needs to reduce the load of the system Electricity prices varies depending on production costs, users are not obliged to reduce their demand if they are asked to. Definición Productos Source: Coordination of Energy Efficiency and Demand Response, A Resource Of The National Action Plan For Energy Efficiency. U.S. Department of Energy Demand Response

19 Interruptibility service The interruptibility service is a demand management tool which gives a rapid and efficient response to the needs of the electricity system in emergency situations. It consists on reducing the active power demanded to a required residual power level (firm power level), in response to a power reduction order issued by Red Eléctrica de España, as system operator, to consumers subscribed to this service. Firm power level Demand program Order duration

20 Industrial demand management REE enable a higher flexibility of the demand through the management of 10 % of the national demand. 155 providers of the interruptibility service provide flexibility and load shape adaptation to the system in critic moments. Flexibility power that REE can interrupt on critical moments (between and MW) Load shape adaptation Shift of the demand from the system peak to the system off-peak

21 Sectorial analysis 155 Interruptibility providers are grouped in industrial sectors in order to get a better comprehension of their consumption. Metallurgy and Iron and steel industry represent more than 70% of the total interruptible demand. Cement, Paper, Chemistry or Industrial Gases have also a considerable percentage of the total demand.

22 Communication scheme The Communication, Implementation and Control System for Interruptibility Service (SCECI) consists of the intercommunicated equipment that implements service interruption orders and their follow up to determine compliance. Management System (SG- SCECI) that forwards service interruption orders. Metering, Communication and Control Equipment (EMCC) set up in consumers to manage interruption orders. REE Providers

23 New tools for system operation New operation tools for the management of the DSM industrial services.

24 GAD project Distribuidor ¿What loads? 1 ¿What customers? 2 ¿Algorithms? 4 ¿Economical and regulatory model? 5 ¿Architecture? 6 ¿What appliances ? 7 ¿System operation? 3 Targets

25 Loads and appliances Load controller (ORBIS) User interface (ORBIS) Plugs and smart lines(ZIV) Smart appliances (FAGOR – ALTRA) Transformer equipment (ORBIS) Smart meter (ZIV)

26 Management tools New tools for demand management (GAD project)

27 Some results for REE For REE, GAD services may become a very relevant operational tool helping to improve efficiency of spanish electric system Response to technical signals Response to price signals

28 Overview of the presentation n Who is REE? n Spanish energy context n The challenge of the Demand Side Management n Demand Response experiences n Conclusion

29 Conclusion Demand side management will have a key role in the future system operation Higher integration of smaller scale and intermittent generation from renewable energies Forecast and operation tools Integration in Control Center Electric vehicle Industrial Demand Management Storage Electricity offer Electricity Demand Information

30 The future of the Electric System “Smart Grid” is the process “to transform the functionality of the present electricity transmission and distribution grids so that they are able to provide a user-oriented service, enabling the achievement of the 20/20/20 targets and guaranteeing, in an electricity market environment, high security, quality and economic efficiency of electricity supply” (ENTSOE) Hydro generation Wind power REE Control centre Thermal generation Transport network Distribution network Distribution substation Transport substation Residential consumption (low voltage) Industrial consumption (high voltage) Storage Renewable Energy Shifting Transformers Demand Side Management Smart meters Electric Vehicles

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