1. Potential Air Impacts of Demand Response in New England Geoff Keith Synapse Energy Economics, Inc. www.synapse-energy.com 617-661-3248

2. DR Emissions Modeling for NEDRI Hourly dispatch modeling with PROSYM Modeled a hypothetical near-term year with a system reserve margin of 20% 500-MW DR resource in New England 60% of DR capacity modeled as load response and 40% generation Modeled economic (day-ahead bidding) demand response – not emergency programs DR bid at five bid points: $100-500 per MWh Synapse Energy Economics, Inc.

3. Overview (cont.) Examined emissions of NOx, SO 2, CO 2, PM 2.5, PM and seven air toxics Explored different assumptions about: –Level of participation by diesel- vs. gas-fired IC generators –Amount of loads shifted to off-peak periods –Whether the DR resource could be used to meet operating reserve requirements Also modeled energy efficiency programs for comparison Synapse Energy Economics, Inc.

4. DR Operation DR operated in approximately 90 summer hours. It provided 3,360 MWhs of load relief (over three times as much as ISO NE’s 2002 economic demand response program). The vast majority of the load relief was in southwest CT. Synapse Energy Economics, Inc.

5. When DR Is Used for Reserves The result is more efficient unit commitment, reduced operation of oil- and gas-fired steam units and overall emission reductions. The emission reductions are primarily due to the use of DR capacity to meet reserve requirements. Increasing the level of diesel participation in the DR program reduces overall emission reductions for NO x, SO 2, CO 2, PM 2.5 and PM. Reductions of NO x are compromised most. Some toxics increase, some decrease Synapse Energy Economics, Inc.

6. When DR Is Not Used for Reserves Emissions impacts are much smaller than when DR is used for reserves. The net impact on NO x could be positive or negative depending on the amount of DR provided by diesel-fired units. While overall emission impacts are small, they could pose health risks in specific locations. The most serious of these risks are probably diesel fine particulates and PAHs. DR emissions are likely to come from units without tall stacks located in populated areas. On one day in the modeled summer, total DR emissions in southwest CT are in the range of: 3.5 tons NOx. Synapse Energy Economics, Inc.

7. Summer Emission Changes from New England DR (when DR is used for reserves) NO x (tons) SO 2 (tons) CO 2 (tons) PM 2.5 (tons) PM (tons) Hg (lbs) All Gas -41-220-31,800-13-22-0.3 Half Diesel -32-220-31,600-13-21-0.3 All Diesel -23-220-31,400-12-21-0.3 1,3 But. (lbs) Acetaldehyde (lbs) Acrolein (lbs) Benzene (lbs) Formaldehyde (lbs) PAH (lbs) All Gas 4.312073106802.2 50% Diesel 2.57038133203.6 All Diesel 0.69.02.015-444.9 Synapse Energy Economics, Inc. Range of uncertainty ±10%

8. Summer Percentage Changes from DR (when DR is used for reserves) NO x (tons) SO 2 (tons) CO 2 (tons) PM 2.5 (tons) PM (tons) Hg (lbs) All Gas -0.18%-0.30%-0.13%-0.37%-0.32%-0.07% 50% Diesel -0.14%-0.30%-0.12%-0.37%-0.32%-0.07% All Diesel -0.10%-0.30%-0.12%-0.36%-0.31%-0.07% 1,3 But. (lbs) Acetaldhyd. (lbs) Acrolein (lbs) Benzene (lbs) Formaldehyde (lbs) PAH (lbs) All Gas 4.33%0.29%0.04%0.01%0.23%0.54% 50% Diesel 2.49%0.16%0.02%0.01%0.11%0.86% All Diesel 0.64%0.02%0.00%0.01%-0.01%1.10% Synapse Energy Economics, Inc.

9. Summer Emission Changes from DR (when DR is not used for reserves) Synapse Energy Economics, Inc. NO x (tons) SO 2 (tons) CO 2 (tons) PM 2.5 (tons) PM (tons) Hg (lbs) All Gas -3.72.37000.10.30.0 50% Diesel 5.73.45200.20.50.0 All Diesel 154.53400.40.70.0 1,3 But. (lbs) Acetaldehyde (lbs) Acrolein (lbs) Benzene (lbs) Formaldehyde (lbs) PAH (lbs) All Gas 3.6110715.67100.2 50% Diesel 1.757358.23501.5 All Diesel -0.10.0 11-192.9 Range of uncertainty ±10%

10. Impacts of Efficiency vs. DR Two efficiency programs we modeled, an energy-targeted and a peak-targeted program. The energy-targeted program reduced annual energy use the most, followed by the peak-targeted program and the DR program. Focusing on annual emissions, the peak-targeted program reduced NO x and SO 2 most, but the energy-targeted program reduced CO 2 most. Focusing on summer emissions, the energy-targeted program reduced NO x, SO 2 and CO 2 most. For DR, these results are from the scenario in which DR is used to meet reserve requirements. Synapse Energy Economics, Inc.

11. Summer Impacts of Efficiency vs. DR For DR, these results are from the scenario in which DR is used to meet reserve requirements. Demand Response Energy-Targeted EE Peak-Targeted EE Synapse Energy Economics, Inc.

12. Annual Impacts of Efficiency vs. DR For DR, these results are from the scenario in which DR is used to meet reserve requirements. Demand Response Energy-Targeted EE Peak-Targeted EE Synapse Energy Economics, Inc.