Monday, September 10, 2007

Assessment Of Demand Response & Advanced Metering

Sep 7: Demand response and advanced metering programs have grown significantly over the past year, according to a new Federal Energy Regulatory Commission (FERC) report that charts progress in the number of demand response programs, the number of states introducing opportunities for demand response and the key role that demand response is playing in organized wholesale power markets. The Energy Policy Act of 2005 requires FERC to annually assess electric demand response resources and advanced metering.

The report, Assessment of Demand Response and Advanced Metering 2007, notes major demand response developments in wholesale markets, including the use of demand resources in forward capacity markets and ancillary services markets, and the development of new reliability-based demand response programs. The report estimates that demand response in 2006 lowered the consumption of electricity by 1.4 to 4.1 percent during periods of peak demand on the systems. The report should provide real value to regulators, policy makers, utilities, and consumers in this rapidly growing and ever important electric resource sector.

Based on a review of various demand response activities in the last year, Commission staff has identified the following demand-response trends: Increased participation in demand-response programs; Increased ability of demand resources to participate in RTO/ISO markets; More attention to the development of a smart grid that can facilitate demand response; More interest in multi-state and state-federal demand response working groups; More reliance on demand response in strategic plans and state plans; and Increased activity by third parties to aggregate retail demand response.

On advanced metering, the report notes the rise in the number of large utilities that are planning to install advanced metering in the next several years, and that several states have taken actions ranging from the approval of smart meter projects or advanced meter deployment and re-establishing collaborative efforts and workshops to issuing rulemakings. According to the report, if all the announced deployments actually occur, more than 40 million new advanced meters will be deployed in the next several years.

An electric "demand-response" activity is an action taken to reduce electricity demand in response to price, monetary incentives, or utility directives so as to maintain reliable electric service or avoid high electricity prices. "Advanced metering" refers to technologies and communications systems necessary to record customer consumption at least hourly and allow for daily or more frequent retrieval of the consumption data. Advanced metering can enhance an electric customer’s ability to reduce demand in response to a higher price and an electric utility’s ability to meter and monitor the customer’s electricity use.

Access a release from FERC (click here). Access the complete 92-page report (click here). [*Energy]

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