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PJM - Demand Response Update – March 1, 2010 ILR Registration Deadline
By Kevin Stafford, Market Manager, PJM & MISO, GDF SUEZ Energy Resources NA
March 1, 2010, marks the
closing of the annual registration window for PJM’s
Interruptible Load for Reliability (ILR) Demand Response
program for the 2010/2011 Delivery Year.
Under the
PJM Reliability Pricing Model (RPM) construct, Demand Side
Resources have the ability to participate in the capacity
procurement process – either as Demand Resources or as
Interruptible Load for Reliability. Eligible ILR
participants may register for Emergency (Capacity only) or
Full Emergency programs, and/or the optional Economic demand
response program.
Depending on the level of
participation in the Emergency ILR programs, Load Resources
would be eligible for compensation by PJM when reducing load
during emergency events. Under the Economic ILR program,
participants have the option to reduce consumption during
periods of high Locational Marginal Prices (LMPs) and
receive additional incentive payments.
Besides saving
energy costs, these programs are also considered
“sustainable energy” techniques and part of the developing
“smart-grid” universe.
For the summer of 2010, PJM
Capacity Costs have equalized across almost all utilities.
Preliminary capacity values and ILR payments are
$63,616/MW-year starting June 1, 2010. For energy users in
most of the Mid-Atlantic utility areas, this is a relatively
stable capacity cost and ILR payout value similar to prior
years.
However, customers on the PJM grid in
Illinois, Ohio, Virginia, Western Pennsylvania and some
other areas will see this as dramatically higher capacity
cost and ILR payout, as their capacity values have been in
the $30,000/MW-year range for the past few years. The ILR
capacity values are paid regardless of any actual event
being called or not (provided the customer curtails per its
commitment during the annual scheduled test).
For
those seeing higher capacity costs in 2010 – as well as
those for whom the costs are stable – ILR not only
represents a means to offset capacity costs, but can also be
seen as a hedge. There are a myriad of techniques and
technologies that can be employed as curtailment strategies
to participate in Demand Response programs. Many of those
techniques require little investment other than careful
planning, communications and execution during curtailment
events.
Some examples of simple and usually
inexpensive ways to reduce loads for short periods include:
● Reduced lighting levels
●
Higher air conditioning or
refrigeration temperature set points
● Turning off
non-essential equipment
● Shutting down or reducing
elevators and escalators
These techniques are being
employed today across many different types of facilities,
including office, retail, education, manufacturing,
hospitals and government. Many modern buildings have
centralized control systems that can help automate these
actions. Shutting down manufacturing processes or starting
standby generators are also potential strategies, but come
with other costs that must be considered.
To learn
more about Demand Response in PJM and how partnering with
GDF SUEZ in your energy management can benefit you,
please
go here.
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