1. Smart DR as Balancing Reserves in the PNW BPA TI 220: Smart End-Use Energy Storage and Integration of Renewable Energy WECC Variable Generation Subcommittee Salt Lake City, UTDec. 8, 2011 Diane Broad, P.E. Ecofys US

2. Technology Innovation Project #220 - Objectives Develop and deploy controllable end-use loads in the residential and C&I sectors Project Purpose: demonstrate that these flexible resources can provide both balancing services to BPA and localized benefits to BPAs customer utilities Scope: 1MW to 3MW of demand response (DR) with energy storage Residential Technologies: Interactive Water Heater Controls and Electric Thermal Storage (ETS) furnaces C&I Technologies: Dispatch of load in cold storage warehouses, interactive HVAC controls in commercial and public buildings, and Steffes ETS furnaces in commercial buildings 2

3. Develop and deploy controllable end-use loads in the residential and C&I sectors Control & Dispatch: control to both increase and decrease loads (different from other BPA DR pilots); test several control methods, control signals and dispatch options Cooperative Project with BPA Technology Innovation and the Energy Efficiency/DR Group Technology Innovation Project #220 - Objectives 3

4. Why develop this approach with these loads? About 75% of water heaters in the Pacific Northwest are electric, approximately 1.8 million units Up to 8,000 MW of potential controllable load within BPA Nationally, 9% of energy is used to heat water Approach and Operation 4 Which balancing services can we provide? BPA has 22,000 MW of hydro generation, ample ability to provide regulating reserves Difficult to balance variability in wind in 10-min. to 90-min. time frame – Load Following – especially DECs at night Water heaters and cold storage can easily provide load following service; Steffes provides regulation service in PJM

5. Project Team Ecofys Steffes Carina EnerNOC Cypress Envirosystems Spirae Montana State U. PNNL EWEB Cowlitz PUD Lower Valley Energy Forest Grove L&P City of Richland Consumers Power NPCC NREL Project Manager / Quality Assurance Project Analysis / Advising Technology Vendors Engineering / Technical Team Participant Utilities 5

6. Residential – Steffes Corp. 105 gal. water heater with iWHC can be thought of as a thermal battery – heats water to 170 ° F with a mixing valve for consumer safety ETS Furnace, Forced Air or Hydronic, is equivalent to a 10x larger battery – coupling it with an air-source heat pump increases efficiency Adjust target temperature and input wattage 6

7. Commercial & Industrial - EnerNOC Energy Network Operations Center EnerNOC's two Network Operations Centers, staffed 24x7x365, feature advanced technology and specialized staff to ensure that load reductions happen quickly, efficiently, and consistently for both the utility and end users. EnerNOC Site Server (ESS) At customer sites, EnerNOC installs an ESS, a gateway device that establishes communication with the network and provides near- real time visibility into end-user energy consumption. The ESS also allows the Network Operations Center (NOC) to remotely control loads in order to deliver demand response capacity.. PowerTrak® EnerNOCs web-based energy management platform monitors energy consumption and enables end-user load control. DemandSMART also provides end- users with a web portal, and utilities with the ability to view load increase or decrease during demand response events. 7

8. Pilot Projects – Scale Residential – 3 host utilities, up to 200 sites - 90 105-gal. & 50-gal. new water heaters with Steffes iWHC - 5 sites with Steffes ETS residential furnaces - 100 Carina WISE water heater controllers on existing & new water heaters Commercial & Industrial – up to 10 sites at 4 utilities - 5 cold-storage warehouse sites; total controllable resource is ~1MW (approx. 20% of load per site) - 2 sites with Steffes ETS commercial furnaces - 2 or 3 commercial or public buildings with HVAC controls vvia Cypress Wireless Pneumatic Thermostats 8

9. Business Case Cumulative Value Streams of Smart DR 9

10. Dispatch Options - Tradeoffs Use storage to reshape demand (e.g., reduce on-peak demand) Use storage to provide balancing services 10

11. Dispatch Optimization Support Optimized Control Strategies in Development Asymmetrical response to BA need for INCs/DECs ETS water heaters have more capacity to provide DECs than INCs Control strategy needs to evaluate energy balance over time, so not to exhaust the capability of the storage Spirae has modeled water heaters in power system simulation software (PowerFactory), and created a representative distribution system model to assess effects of control Ecofys is analyzing BPAs Balancing Reserve Deployment signal: daily, monthly and seasonal shape; time & energy in extreme events; correlation with wind ramps/error 11

12. Dispatch Optimization Support Balancing Reserve Deployment Signal (BRD) with deadbands Minutes of INC event: 1530 Total energy of events: 10,335 MWh Minutes of DEC event: 1285Total energy of events: 10,109 MWh 12

13. Dispatch Optimization Support Processing the BRD and including Peak Load Management 13

14. Dispatch Optimization Support Representative Electrical Dist. System model with iWHC Spirae, Sept. 2011 14

15. Modeling and Simulation Results Spirae, Sept. 2011 15

16. Dispatch Optimization – Alternate Approach Wind Forecast Error in BPAs Balancing Area 16

17. Dispatch Optimization Support – Alternate Approach Using Wind Forecast Error to modify dispatch 17

18. Performance Analysis & Control Validation Steffes Dashboard for each iWHC unit 18

19. Objective: Verify devices are responding to the BRD Adjusted BRD is inverted & scaled MA is an index signal for charging (0-200) Resource is available continuously for INCs and DECs Average tank temp remains in desired range Performance Analysis & Control Validation 19 Water heaters supply all customer needs from DECs!

20. EnerNOC DemandSMART portal Defined Events: -10 min. notice -30 min. duration -2 events/day -INC or DEC calls (curtail load or increase load) Facilities will proceed to longer & more frequent events Response to a 200kW DEC call, City of Richland, WA Performance Analysis & Control Validation 20

21. Summary & Next Steps Accomplishments -Validated speed of response -Validated duration of response -Determined available INCs/DECs relative to nameplate kW demand of the load -Impacts on distribution system Further work -Deploy additional technologies -Address concerns over system peaks and power contracts -Refine control approach using correlation between wind error and reserve deployments -Integration into control center/BA operations, reserve calcs. -Explore appropriate use of an aggregator -Refine incentives and cost/benefit estimates at high penetrations; what market drivers make Smart DR viable? 21

22. Thank you for your attention. Questions and comments are welcome. Diane Broad Ecofys US d.broad@ecofys-us.com T:541-766-8200 M:541-905-2472 22