Market Participant Experiences with Demand Side Bidding and Future Direction Linda Roberts, EA Technology Richard Formby, EA Technology

Overview of Presentation The role of the IEA Definition of DSB Description of DSB products Experiences with DSB Developing DSB

The Role of the International Energy Agency (IEA) To improve the world's energy supply and demand structure by developing alternative energy sources and increasing the efficiency of energy use Stimulates the development and deployment of new energy technologies through a vast network of Implementing Agreements

IEA Implementing Agreement on Demand Side Management and Technologies ‘Promoting Energy Efficiency and Demand- Side Management for global sustainable development and for business opportunities' Task II: Communications Technologies for Demand Side Management Task VIII: Demand Side Bidding in a Competitive Electricity Market

What is Demand Side Bidding? Is it different to Demand Side Management? DSB: Encouraging consumer flexibility for cost reduction DSM: Encouraging load reduction or other long term changes to consumption patterns

Demand Side Bidding Products

Time-Frame associated with Demand Side Bidding Categories Months / days ahead tradingDay ahead tradingWithin day trading Time of delivery Price setting Access to market prices Balancing market Network constraints Quality of supply

System Operator Market Operator Supplier Trader Broker Balancing Market generation transmission distribution end-use Balancing Ancillary Services Constraint Bilateral Contract Bilateral Contract Supply Contract Spot market trading Spot market trading DSB and the market place

Experiences with Demand Side Bidding

Frequency response in the UK Technical Rules –available load must be at least 3MW –control must be instantaneous –load must be available for up to 30 minutes –consumer can specify times that load is available

Frequency Response Aggregator Cement production Cement production System Operator Cement production

Frequency Response Arc Furnaces

Total arc furnace demand 100MW of firm load

Standing Reserve Technical Rules –required within 20 minutes of receiving notification –load control can be automatic or manual –load must be available for up to 2 hours –System Operator specifies ‘windows’ of service

Communications for Demand Side Bidding

DSB and energy efficiency? Does DSB involve a short-term reduction or increase in demand (kW)? Is total energy(kWh) the same, increased or reduced? What is effect on generating mix –does it avoid the use of inefficient generation?

Effect of generation mix on energy efficiency Weekday, December 1996

Conclusions DSB enables consumers to become active participants in the electricity market DSB has been successfully operating for a number of years Need to explore ways of enabling more consumers to participate