Upload
affrica
View
16
Download
0
Tags:
Embed Size (px)
DESCRIPTION
New York State Department of Public Service. WG-1: DSPP MARKETS COMMITTEE. July 10, 2014. About this Presentation. This presentation includes input from all sectors and parties This presentation does not nor was it intended to represent a consensus view - PowerPoint PPT Presentation
Citation preview
NYSDPS
WG-1: DSPP MARKETS COMMITTEENew York State Department of Public Service
July 10, 2014
07-10-2014 WG-1: DSPP Markets CommitteePage 2
About this Presentation
This presentation includes input from all sectors and parties
This presentation does not nor was it intended to represent a consensus view
For this committee, policies and facts are intertwined, and development of the issues requires consideration of both
07-10-2014 WG-1: DSPP Markets CommitteePage 3
Agenda
Committee Overview
Products & Services
Challenges & Pathways to Increased DER Penetration
Initial Model
Interaction with Wholesale Markets
Summary
07-10-2014 WG-1: DSPP Markets CommitteePage 4
Committee Overview: Participation & Structure
Steering Committe
eGovernmental
Agencies
Consumers
ESCOsOther
Utilities
DER Providers
Environmental Groups
Each sector represented on a Steering Committee
Steering Committee members coordinated with parties within sector/sub-sector
Weekly working meetings of the Steering Committee
Weekly reports to and requests for information from the full Committee
Interaction with Wholesale Markets subgroup
07-10-2014 WG-1: DSPP Markets CommitteePage 5
Committee Overview: Scope
The scope and objectives of the Markets Committee was to:
• Identify potential products, services and transactions between various parties under the new REV construct
• Develop information on the value of the products and services• Focus on the near term or initial stage of REV rather than end state market
structure• Define challenges and pathways to further proliferation of DER provision of
products and services• Recommend a potential initial model or procurement structure to facilitate DER• Describe interaction of DSPP and other parties with NYISO wholesale markets
07-10-2014 WG-1: DSPP Markets CommitteePage 6
Committee Overview: Key Takeaways
There are numerous potential products and services that DER can provide• Some exist today; it is expected that new and innovative products will develop in the future
Precise definitions of DSPP products and services will be of great importance; the varying legal, industry, and customer context leads to ambiguity in such basic terms such as energy, capacity, demand response, and distributed energy resources
Distributed energy resources exist today • Programs and initiatives by PSC, NYSERDA, utilities, ESCOs, NYISO etc.• Resources may be under utilized• More resources are needed to optimize efficiency and achieve the goals of REV
There are a number of challenges to further proliferation of DER
In the initial stage: • The utilities will play a key role in further developing and utilizing DER• Utilities and DER providers need to be engaged and share information • There are regulatory actions that can help facilitate DER development• NYISO market rules may also need to be aligned
07-10-2014 WG-1: DSPP Markets CommitteePage 7
Agenda
Committee Overview
Products & Services
Challenges & Pathways to Increased DER Penetration
Initial Model
Interaction with Wholesale Markets
Summary
07-10-2014 WG-1: DSPP Markets CommitteePage 8
Products & Services: Overview
The Committee broadly defined DER to include:• Distributed generation (e.g., fuel cells, PV, CHP, etc.)• Energy storage• Demand response• Energy efficiency• Microgrids• Other distributed resources
New innovative resources are expected to be developed in the future
For this effort, products and services viewed from two perspectives:• Procured by the DSPP for the benefit of the electric distribution system or to
meet public policy requirements • Procured by and among customers, ESCOs, DER providers and other third
parties
07-10-2014 WG-1: DSPP Markets CommitteePage 9
Products & Services: Bought by the DSPPPotential Benefits
Multiple benefits can be expected from some products:
Product or Service Examples of anticipated benefits
Base load modifications (e.g., local energy production/supply side increases; permanent load shift/reduction)
Avoided or deferred T&D investmentsReduced line lossesIncreased system flexibilityReduced operating costsFuel diversityEmission reductions
Peak load modifications (e.g., capacity – DER output offsetting generation; demand response/peak management; flexible capacity/ramp rate)
Improved asset utilization/load factorImproved local reliabilityImproved system stabilityImproved capacity utilizationClimate change mitigationLower energy/capacity costs
07-10-2014 WG-1: DSPP Markets CommitteePage 10
Products & Services: Bought by the DSPPPotential Benefits
Product or Service Anticipated benefits
Non-bulk ancillary services (e.g., frequency response and regulation; spinning and non-spinning reserves; power factor correction; voltage support)
Local optimization of servicesImproved power qualityImproved efficiencyImprove reactive supportAdditional revenue to offset operating expensesReduced fuel consumption
Contingency/Planning (e.g., resource adequacy; black start; emergency power islands)
Improved resiliencyImproved emergency responseImproved system restorationIncreased proliferation of DER, particularly cleanPublic health and safety benefits
* NOTE: The Committee disagreed as to whether energy and capacity are products that the DSPP would buy/make a market for and whether they provide value to the distribution system.
07-10-2014 WG-1: DSPP Markets CommitteePage 11
Products & Services: Bought by the DSPPPotential Benefits
The value of benefits of DER products are dependent on specifics of DER and system conditions.
Potential benefits will be influenced by:
• Location• Resource• Time of day• Resource variability• Predictability and visibility• Price• Other factors
07-10-2014 WG-1: DSPP Markets CommitteePage 12
Products & Services: Bought by Others
Product or Service ExamplesDelivery Services • Value added service
• DG/DER Interconnection service• Non-bulk ancillary services• Smart technology and load management services
End Use Customer Services • Enhanced power quality• Energy efficiency programs
Pricing and Billing Services • Time differentiated pricing• Billing for third parties• Management of transactions between customers/ESCOs and the DSPP or the DSPP and the NYISO
Metering and Information Services
• Customer usage data• Load research data• Market potential or saturation studies• Data analytics
07-10-2014 WG-1: DSPP Markets CommitteePage 13
Products & Services: Provision of DER
DER products and services may provided though various markets or funding mechanisms
• Bilateral agreements• DSPP tariffs (e.g., tiered)• Fee based aggregation• DER funding based on future savings• Wholesale markets • On-bill financing• Property Assessed Clean Energy (PACE)• DSPP, DER, ESCO and/or Third-Party provision of services
07-10-2014 WG-1: DSPP Markets CommitteePage 14
Agenda
Committee Overview
Products & Services
Challenges & Pathways to Increased DER Penetration
Initial Model
Interaction with Wholesale Markets
Summary
07-10-2014 WG-1: DSPP Markets CommitteePage 15
Challenges and Pathways: DER Penetration & Utilization
DER penetration is not currently at a level where an “end-state” market would function
Need to identify and remove challenges to entry, expansion and integration of DER
Need to provide appropriate market structures and incentives
DE
R P
enet
ratio
n
Build Asset Base
Establish Day 1 Market
Adapt and Improve Market
Time
07-10-2014 WG-1: DSPP Markets CommitteePage 16
Challenges & Pathways: How to Facilitate DER Penetration
Pricing• Monetize DER benefits
• Varying compensation based on distribution level benefits (location, level and timing of system needs, and resource performance)
• Monetize public policy and customer benefits • Develop appropriate pricing for services based on values and costs (e.g.,
incentives for performance of DER)
Information availability• Distribution system needs and capabilities• DER performance and commitment• Customer account/usage information
Billing and Metering• Standardization of metering, verification and reporting requirements
07-10-2014 WG-1: DSPP Markets CommitteePage 17
Challenges & Pathways: How to Facilitate DER Penetration
Technical• Interconnection rules
• Streamline• Coordinate electric, gas and steam operations
• Establish monitoring, control and verification of DER installations• Deployment of communication infrastructure
Other• Address cost and financing of DER• Incentivize utilities to consider DER alternatives to T&D investments• Continue RPS, EEPs, SBC through transition• Revisit standby rates (cost allocation)• Clarify future of net metering• Improve LSE/customer data submitted to the NYISO for capacity and energy settlements• Revise benefit/cost analysis framework to include societal benefits and costs (e.g.,
environmental)• Ensure use of DER maintains reliability of the T&D system
07-10-2014 WG-1: DSPP Markets CommitteePage 18
Agenda
Committee Overview
Products & Services
Challenges & Pathways to Increased DER Penetration
Initial Model
Interaction with Wholesale Markets
Summary
07-10-2014 WG-1: DSPP Markets CommitteePage 19
Initial Model: Utility Roles
DSPP CustomersBought by customers
Bought by DSPP
Third-Parties
Integrated Resource PlanningCustomer engagementServices (e.g. metering and financing options)AggregationProduct valuation and pricing (i.e. Tariff )
07-10-2014 WG-1: DSPP Markets CommitteePage 20
Initial Model: Utility Roles
An entirely market-based system in the near term is probably unrealistic
Utilities will likely play an integral role in facilitating and integrating DER
Utilities should do the following in the near term:
• Identify areas where DER would have near term value• Provide information and develop sufficient price signals to reflect distribution system needs
for planning and real-time operations • May require DSPP explore DER opportunities as alternatives to T&D investment through a
targeted RFP or rates• Partner with customers in identifying, designing and developing DER projects
• Integrate DER in system planning• First establish visibility into new and existing DER• Develop standard methods for predicting, measuring, observing, and verifying performance• Where feasible, utilities should standardize (e.g., information to be exchanged between
utilities and DER providers; contracts; etc.)
07-10-2014 WG-1: DSPP Markets CommitteePage 21
Initial Model: Potential Regulatory Actions
Regulatory actions may be needed to help facilitate utility procurement of DER and incorporation into its planning and operation functions
Some potential actions include:
• Provide guidance on “values” to be monetized and develop appropriate metrics (e.g., environmental benefits, resiliency, etc.)
• Adopt a cost/benefit valuation methodology for DERs as alternatives to T&D investment
• Multiple types of market and procurement models will able to be developed using the same valuation methodology but applied to different compensation mechanisms
• Leverage and expand existing programs as a bridge to sufficient DER penetration to animate markets
• Create a platform for communication, monitoring and dispatch of distribution level DER
• Address tariff, pricing and billing issues and policies (e.g., standby rates, net metering, capacity tags, access to customer information, utility rate design)
07-10-2014 WG-1: DSPP Markets CommitteePage 22
Initial Model: Potential Regulatory Actions
Potential actions include (continued):
• Address technical challenges (e.g., interconnection requirements, equipment limitations associated with two way flow; DER measurement/verification)
• Provide incentives, through performance-based ratemaking, for the utilities to pursue DER deployment opportunities
• Create or modify rate structure to more appropriately reward customer load responsiveness
• Begin transitioning toward advanced metering technology and direct load control where economic
• Ensure proper market rules are in place to create a level playing field and give all competitors equal opportunities to sell their products
• Develop a common portal to exchange information and solicit interest in products between Utilities, Customers, DER Providers, ESCO’s and other third parties
• Continue to address barriers or conflicts as they arise
07-10-2014 WG-1: DSPP Markets CommitteePage 23
Agenda
Committee Overview
Products & Services
Challenges & Pathways to Increased DER Penetration
Initial Model
Interaction with Wholesale Markets
Summary
07-10-2014 WG-1: DSPP Markets CommitteePage 24
DSPP Interaction with Existing Markets and Programs
NYISO MarketsEnergy MarketsCapacity MarketsAncillary Services
Demand Response Opportunities in NYISO ProgramsDay Ahead Demand Response Program – EnergyDemand Side Ancillary Service Program – Ancillary ServicesSpecial Case Resources - CapacityEmergency Demand Response - Reliability
Existing Utility DER ProgramsCon Ed Demand Response Programs/NYPA and LIPA programs
07-10-2014 WG-1: DSPP Markets CommitteePage 25
DSPP Interaction with Existing NYISO Markets
• DSPP use of DER to interact with the wholesale market:• Offsetting energy purchases by flattening load • Aggregating customer demand response capability
• DER visibility and control:• Enhances market efficiency and operational control• Provides distribution and bulk power system reliability
benefits• Aligned market rules:
• Ensure efficient and appropriately valued DER participation in both arenas.
• Avoid double payment for the same product purchased in both markets
• NYISO rule changes subject to NYISO governance
07-10-2014 WG-1: DSPP Markets CommitteePage 26
Maximizing the Benefits of DSPP Interaction with the NYISO
• Assess short-term impacts of increasing DER integration on the wholesale markets.
• Avoid unanticipated adverse impacts on bulk power system:• Market commitments• Real time operations • Reliability rules and requirements
• Plan DSPP market/program design to avoid unanticipated impacts requiring redesigns
07-10-2014 WG-1: DSPP Markets CommitteePage 27
Understanding the Impacts of Increased DER for Program Design and System Planning
• Is an evaluation of the impact of DER penetration on the New York bulk electric system valuable?• Reliability, including installed reserves• Increased regulation and other ancillary services• Impacts on production costs
• Planners must:• Recognize increased penetration of DERs• Account for its value• Understand reliability impacts
• Design DER programs to ensure load forecasting and system planning can rely on results• Align measurement and verification requirements
07-10-2014 WG-1: DSPP Markets CommitteePage 28
Maintaining Demand Response Capability
• Uncertainty as a result of the recent D.C. Circuit ruling on the FERC’s authority
• Ongoing DER value to the wholesale market through DSPP rates / programs that:• Shape the peak energy use/price• Satisfy the installed capacity obligation and • Reduce energy purchases
• Reliability can be facilitated by providing load reduction at NYISO request• Provide timely, transparent compensation to the DSPP for
any bulk power reliability benefit and DSPP administrative services
07-10-2014 WG-1: DSPP Markets CommitteePage 29
Agenda
Committee Overview
Products & Services
Challenges & Pathways to Increased DER Penetration
Initial Model
Interaction with Wholesale Markets
Summary
07-10-2014 WG-1: DSPP Markets CommitteePage 30
Summary
There are numerous potential products and services; some exist today; it is expected that new and innovative products will develop in the future
Distributed energy resources exist today and they provide products and services today
In order to fully achieve the goals of the REV initiative, including more efficient distribution and bulk power systems, additional resources and better utilization of existing resources is needed
There are a number of challenges to further proliferation of DER
In the initial stage, the utilities will play a key role in further developing and utilizing DER
More information sharing and engagement from both utilities and DER providers is needed
07-10-2014 WG-1: DSPP Markets CommitteePage 31
Summary (continued)
• There are regulatory actions that can help facilitate DER development (e.g., performance based regulatory design, address tariffs and pricing)
• NYISO market rules also need to be aligned to ensure efficient use of DER participants
• Approaches to increasing the penetration of DERs should occur systematically, reliably and safely.