The Impact of Demand-Side Management on Energy Markets

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The Impact of Demand-Side Management on Energy Markets

Berlin, October 17th, 2013

4th Annual Electricity Price Modelling and Forecasting Forum

Dr.-Ing. Serafin von Roon (FfE)

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Agenda

Research Association for Energy Markets and Technologies

Results of the Agora Study – what do the key players say?

A modelling Approach for DSM:

The Concept of the “Functional Energy Storage“

Costs of DSM

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Research Association for Energy Markets and Technologies

Urban Energy Management Industrial Energy

Management

Research Center for Energy Economics

 Independent Research in Energy Economics for 60 years

 Cooperation with the Technische Universität München

 Expertise in all fields of energy economics

 Foundation of Research Association for Energy Markets and Technologies in 2001

Smart Energy & Smart Markets

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Design and Approach of the Study

Study Design

 Regional focus with taking into account the industry structure (automotive / mechanical engineering)

 Practical results involving all relevant players  Inclusion of cross-section technologies

Approach

 Face to face interviews with 10 companies and 5 players in the Energy Industry

 Online questionnaire about the feasibility of load management in more than 280 companies  Evaluation of statistics, load management studies and data from 40 site inspections,

extrapolation of potential

 Validation of the results in expert workshops and discussions with companies, industry organisations, network operators and utility companies

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Why did we focus on Southern Germany?

Strained Supply Situation in Southern Germany

 4.9 GW of nuclear power switched off since 2011

 More shutdowns in 2015 and thereafter  Only a few power plants under

construction (a coal-fired power plant in both Karlsruhe and Mannheim)

 Network expansion not until 2017 at the earliest, and then further based on

requirement

Central Question

Could load management contribute to the security of supply in Southern Germany? 2021 2021 2021 2022 2022 2022 2015 2021 2017

Already switched off

Planned shutdowns Geplante Abschaltung der Kernkraftwerke

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Experiences with Demand-Side Management

Is Demand-Side Management a new and innovative approach?

Load Management has been practised for decades – goal: reduce local load peaks New: Load Management for global benefit e.g.for a better integration of renewable as well as security of supply

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Experiences with Demand-Side Management

Possible contribution to security of supply  Reduction of peak load  Provision of balancing power  Redispatch 2% 4% 16% 47% 21% 13% 26% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% B ila te ra le V er ei nb ar un ge n m . N etz be tr ei be rn B ete ili gung am R eg el ene rg ie m ar kt G enutz t zu ei ne m opt im ie rte n Str om ei nk auf R eduk ti o n be tr ie bl ic he r Spi tz enl as t G epr üf t, ni cht um ge se tz t So ns ti ge Ke ine E rf ahr un ge n

Bitte geben Sie an, über welche Erfahrungen Ihr Einzelbetrieb/Standort mit dem Thema Lastmanagement

verfügt?

in % der Antworten, N=97

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Estimation of the Potentials

Other findings of the online survey Duration of activation:

majority 0,5 – 2 hours, in 20 % of respondents 2 h Necessary time of notice: 1. group: < 1 hour

2. group: > 8 h to 1 day Frequency:

up to 50 activations per year, with 10 % of respondents more than 100 activations

Necessary financial incentives: 15 % of companies with 3-5 % electricity cost savings

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% > 100 kW - 1 MW (N=24) > 1 MW - 10 MW (N=44) > 10 MW - 100 MW (N=13) A n te il A n tw o rt e n Durchschnittslast

Realisierbares Potenzial für Abschaltung

(in % bei normaler Auslastung) über Durchschnittslast In % der Antworten je Lastkategorie

> 15% 11% - 15% 7% - 10% 4% - 6% 2% - 3% < 2 %

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Why aren‘t we making use of this potential?

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Regelungen sind zu kompliziert (N=69)

Zusätzliche Betriebskosten (N=76) Andere Investitionen haben Vorrang (N=80) Ungewisse Stromkostenersparnis (N=74) Höhe der notwendigen Investitionen (N=74) Geringe Stromkostenersparnis (N=75) Regelungen sind zu restriktiv (N=65) Zukünftige Regelungen sind noch nicht bekannt (N=74) Störung der Arbeitsabläufe (N=83) Mögliche Beeinträchtigung der Produktqualität (N=78) Technisches Risiko einer Produktionsstörung (N=78)

Welche Gründe hindern Ihren Betrieb überhaupt oder in größerem Umfang als bisher Lastmanagement zu betreiben? In % der Antworten

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Potential of Energy Intensive Processes

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Cross-Sectional Technologies

Ventilation Compressed Air

Lighting Pumps Heat distribution IT Power production Electrical Engines Cooling production and distribution Heat production and distribution

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Maximum and minimum electricity consumption that can be

switched off for cross-sectional technologies

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Electromobility

Pumped Storage CHP + Heat Storage + Power2Heat Flexibilization of Load + - Power2Gas Further Technologies

FfE Region Model Welfare and Market-Analysis

*

**

Functional Energy Storages

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Functional Energy Storages

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Storage Technologies and Demand Response

Functional Energy Storage exemplified by CHP

0 10 20 30 40 50 60 70 80 1344 1368 1392 1416 1440 1464 1488 Leistun g/ Las t in GW Stunde im Jahr 0 10 20 30 40 50 60 70 80 1344 1368 1392 1416 1440 1464 1488 Leis tung /L a s t in GW Stunde im Jahr 0 10 20 30 40 50 60 70 80 1344 1368 1392 1416 1440 1464 1488 Leistu ng /L as t in GW Stunde im Jahr 0 10 20 30 40 50 60 70 80 1344 1368 1392 1416 1440 1464 1488 L eistu n g /L ast in G W Stunde im Jahr Negative Residual-Load Residual-Load Renewable Energies CHP Flexibile CHP Renewable + CHP 0 10 20 30 40 50 60 70 80 1344 1368 1392 1416 1440 1464 1488 Power/ Load in GW

hour of the year Hour of the Year

Power/Loa d in GW -15 -10 -5 0 5 10 15 Storage Power i n G W

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Types of Costs for Implementing and Operating Demand

Response

Investments Fixed costs Variable costs

 Measurement and control technology  Software  Communications technology  Demand Response strategy  Storages  Information costs  Transaction costs  Control costs  Opportunity costs (value of lost load)  Storage costs  Personnel costs  Maintenance costs  Inconvience costs  Efficiency losses  Fuel costs

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Fixed Costs: Investments

1

8

4

1

1

1

0

1

2

3

4

5

6

7

8

9

2,000 EUR

4,000 - 6,000 EUR

10,000 EUR

30,000 EUR

36,000 EUR

no answer

number of mentions (N = 16)

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Fixed Costs: Personnel Costs

2

8

3

1

1

1

0

2

4

6

8

10

0 EUR

2,000 - 5,000 EUR

8,000 - 12,500 EUR

30,000 EUR

38,000 EUR

60,000 EUR

number of mentions (N = 16)

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Variable Costs

Additional Personnel Costs Efficiency Losses Comfort Losses Storage Losses Other

Ventilation System Shut down 2 3 12 0 0

Shut down 1 3 6 2 0

Start up 1 2 1 1 2

Electric Lighting Shut down 2 0 6 0 1

Heating Circulation Pumps Shut down 1 2 3 0 0

Shut down 1 1 0 0 0 Start up 1 0 0 1 0 Shut down 0 0 1 0 0 Start up 0 0 1 0 0 Start up Shut down

Band-Conveyors No Variable Costs

Cross-Sectional Technologies

Demand Response

Strategy

Mentions per Variable Cost

Refrigerating Machine

Heat Pumps

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Summary of Costs: Investments

Type Investments

Personnel Costs for Potential-Analysis,

Operating-Strategy & Employee-Training 6.000 EUR

Communication Box for Data Exchange with Demand Response Aggregator

I.a Plant-Independent Investments

I.b Plant-Dependent Investments

3.000 EUR

Investments

1.000 EUR per Plant 250 EUR 2. Plant

Type

in case Upgrade Control Technologies: Relays 6 to 9 EUR per kW

10 kW: 2.000 EUR

Upgrade Measurement (Power Measurement)

1.000 EUR 1. Plant

Integration in Building Automation

100 kW: 7.000 EUR 500 kW: 30.000 EUR 100 EUR per Illuminate

in case Upgrade Control Technologies:

Dimmable Ballasts

in case Upgrade Control Technologies:

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Summary of Costs: Fixed Operating Costs

Type Amount

Annual Fixed Personnel Costs

(1st Year) 5.000 EUR per Year

II.a Fixed Personnel Costs

Annual Fixed Personnel Costs

(2nd Year and following) 2.000 EUR per Year

II.b Data Exchange

Type Amount

Annual Fixed Costs caused by Data Exchange between

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Summary of Costs: Variable Costs

Variable Personnel Costs per Demand Response Activation 8 EUR per Activation

in case of Load Increase additional Costs for Purchasing

Electricity may occur Quantifying is not possible

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Results and Conclusion

Potential

 Significant Load Management Potential is available not only in branches with high power consumption but also in cross-sectional technologies in all branches

Restraints

 Fear of: Technical risk of production disruption, Damage of product quality, Disruptions of operations

 Regulations are too restrictive

 Incentives are too low – except ordinance of disruptable load

The Business case „Cross-sectional technologies for Demand Response“

 A positive net capital value is possible - but only with high cumulative power and only in specific markets

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Thank you for your attention and the support of

Serafin von Roon: sroon@ffe.de / +49-89-158-121-0

Forschungsgesellschaft für Energiewirtschaft mbH

Am Blütenanger 71

Figure

Updating...

References