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KEY FINDINGS

  • Category :
    DSM CASE / Key Findings
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    KEY FINDINGS
  • Author :
    Casebook, Admin
  • Create Date :
    10/7/2015 1:45:37 AM
  • Edit Date :
    10/7/2015 2:01:45 AM
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  • KEY FINDINGS

    N.B: technical terms presented in the Key Findings are further detailed in the introduction section.

     

    Case book context

    The lessons learned and best practices presented in the thirteen case studies included in this case book provide qualitative insights into the complexity of deploying Demand Side Management (DSM) initiatives. These case studies are based on a diverse range of technologies and under specific market rules. They incorporate various program and policy mechanisms and include information on costs and the associated business cases for investment. Each case presented has its own unique set of characteristics and drivers, which is indicative of the diverse range of drivers for smart grid and DSM. The cases are at very different stages throughout the world. While some countries have completed first rounds of pilots and are building on lessons learned, the others are at earliest stage of these initiatives. The size, customer class, choice of technologies deployed, specific costs, benefits and business cases vary from case to case. Still, there are a number of best practices and common themes emerging from these cases that are likely to be useful for any stakeholder investigating or deploying Demand Side Management. Those best practices and insights are presented here. The key findings are a synthesis attempt of the broad range of the approaches tackled by the different smart grid demonstrators described by the 13 cases. It highlights the main lessons learned and best practices shared by the participating cases. These lessons learned mainly concerns technical approaches, customer engagement and market establishment.

     

    DSM approaches in the case book

    Based on the 13 described cases, there appear to be three main approaches to Demand Side Management:
    - The feedback system, which consists in informing the consumer about the system constraints. It focuses solely on providing feedback on the electricity use. This approach represents a first step towards DSM implementation. 
    - The price-based approach, which requires behaviour change on the customer side triggered by price signals.
    - And the system capacity-based approach, which does not rely on the price sensitivity of customers but on other system forecasts. In this approach, the customers indicate their preferences to a third party player (aggregator or system operator) and consent to let this player take the control of smart appliances. For larger customers, this can include contracts for load shedding. The customer’s consent and adhesion is a prerequisite for the success of the 3 approaches. The 3 approaches aim to reduce the bulkiness of current solutions in terms of the business, communication and computational requirements. In some countries there is a combination of several approaches.

     

    Technical approaches and challenges

    More standardization is a condition for the development of DSM:
    One of the major benefits of the conducted demonstration projects is that they offer a proper testbed for testing possible technical solutions and analyze the advantages and disadvantages of various system architectures in the ICT sector as well as in business models. In this regard, smart grid and in particular DSM technologies should address standardization and interoperability, in order to improve business cases and assure the diffusion of the implemented solutions. More cooperation between DSM actors /players is required to provide the adequate services: Not all components of the DSM equipment are standardized products and the path towards standardization takes time. As an example, commercially available energy management systems (EMS) do not support continuous load management, and the DSM systems (DSMS) do not support ancillary services provision since the Virtual Power Plant (VPP) operates continuously in near real-time. Therefore, continuous communication between the load and the aggregator, and between the aggregator, the VPP and the system operator is required. To demonstrate value as an ancillary service, a significant amount of load available is required to shift by the VPP via aggregators. Future developments of VPP and commercial systems include peak demand reduction as well as ancillary services based on load management and storage. In order to make DSM sustainable, the automation of load management is an important step. However, it is absolutely necessary that customers keep the possibility to control their devices and to be able to override and intervene in automated decisions in demand response programs.

     

    Customer engagement

    Active and passive techniques of DSM: DSM covers a large scope of techniques spreading from passive to active ones:
    - From basic passive techniques where the consumer has little to no control. The utility applies the solution without informing or consulting the customer and does not allow opt-in or opt-out capability (e.g. load shedding, voltage reduction).
    - To more active techniques where the consumers take a hands-on role in determining the pro¬grams that they will participate in and the extent to which they are involved. The consumer can opt-in or opt-out at any time (e.g. time-of-use rate plans and utility-controlled thermostats).
    - Different combinations of techniques could be found in between Customers accept change but do not tolerate service degradation: Different approaches are employed to recruit customers for the demonstrators, depending on expressed customer preferences and values, as well as the current stage in the process of deploying DSM technologies. In many cases, communication with the public tends to focus on the social values and environmental aspects rather than individual financial benefits of participating in the project. These aspects are also an expectation of the participants. However, by participating in the demonstrator, the consumers often need to be guaranteed, from the beginning, that they will neither lose money nor quality of supply. Indeed, they do not want to pay more for the electricity than they do under their normal contract. Once the participant has some experience with the new service, if the participant perceives that the service has improved, her engagement should sustain. Best practices to appeal different groups of customers have been identified: Recruitment techniques also vary according to customer knowledge and comfort levels with smart grid technologies. Some customers are first-movers or early adopters of new technology and smart grid solutions, while the mainstream group of customers is often not especially interested in energy issues. Some-times these mainstream customers can be motivated to participate in test trials by receiving new smart equipment, which can allow for a critical mass of DSM participants to ensure the success of the initiative. Nevertheless, as such incentives are demonstrator dependent; it is challenging to use them at larger scales. Managing customer expectations is paramount in a long-term research or demonstration project. Both residential and commercial customers are risk averse and require simple and understandable products and services (plug and play). Strategies to tackle the risk aversion of customers have been developed: Throughout customer recruitment, the utility companies have been up front with customers regarding the project duration and the fact that as a trial, the utilities do not have yet all of the answers. To mitigate any risk associated with that, the customer support services need to be revisited and customer facing employees should be trained to be knowledgeable about the project, and about how to communicate aspects of the project with stakeholders. The results of field trials in the cases included in this book show that the customers quickly exhibit signs of fatigue and need to be closely assisted in order to realize a sustainable load shift. Moreover, to tackle customer fears regarding data privacy issues, clear rules on the ownership and protection of their data should be defined and shared early into their engagement with the project.

     

    Market establishment

    A new market system requires the development of innovative equipments: The operation of the electricity system changes from a high level control of a relatively small number of large power plants to an optimization of the system based on large amounts of (sustainable) generators and flexible users. This step should be possible by moving from demonstrators to large scale deployment. This makes scalability assessment not only a challenge but also an opportunity for demonstrators. Maintaining the system’s demand and supply balance will involve large numbers of small and medium-sized energy-demanding equipment. An extension of the market set-up is expected through the introduction of an ancillary services market: For most jurisdictions represented in this case book, the implementation of the results and findings of DSM projects across an entire energy system will require further development of market models. To make the energy transition possible, that development will need to include relevant stakeholders and decision makers to support system balance through load management. The setup of DSM ancillary services is an important step in the further development of the existing electricity wholesale markets and balancing markets that creates more favourable conditions for the integration of more renewable generation into the supply mix of energy resources. This will not necessarily require a replacement, but an extension of the current market set-up. Remaining obstacles are still to be overcome: Balancing markets around the world are quite diverse in market design. The two following examples illustrate these differences in market design:
    - The choice of gate closure time, i.e. the moment from which the TSO doesn´t allow actions by the market participants anymore, differs between countries.
    - Electricity markets provide opportunities for end-use customers to realize value for reducing their demand for electricity. DR can be an integral part of markets for energy, day-ahead scheduling reserve, capacity, synchronized reserve, etc… and would compete equally with generation in these markets. End-use customers participate in DR by reducing their electricity use either during an emergency event or when locational (single) marginal prices are high in the system. However to enable this, end-use customers need to participate through acting agents and get a more in-depth understanding of the opportunities as well as determine whether they have the capability to participate.

     

    Multi-national research

    To tackle the maturity differences between countries on the DSM development, there are a number of coordinated multi-national initiatives driving Demand Side Management research. One of Europe’s notable initiatives is through the EU FP7 funded project ADVANCED (Active Demand Value ANd Consumers Experiences Discovery) , which has been launched in 2012 with the aim to better investigate behavioural barriers and fill the gap in best practices availability for Active Demand (AD) de¬sign from the customer standpoint. In particular, a framework enabling residential, commercial and also industrial consumers to participate in AD will be developed, and impacts and benefits for key stakeholders will be quantified according to different scenarios. Real data from pilot projects underway in several countries ? ADDRESS pilots in Spain and France, EDeMa in Germany and Enel Info+ in Italy, will be used together with the data collected in VaasaETT’s database from more than 100 European AD projects involving around 450,000 residential consumers. The ADVANCED project involves EU energy utilities, universities, research centers and consulting firms in the energy sector, market research agency and one of the first aggregators in Europe. Other worldwide initiatives arise through country cooperation. That includes not only cases from Europe, but also cases from other continents like America and Asia. IEA ISGAN is one example of these initiatives, where knowledge sharing is encouraged inside different annexes. Annex 2 of ISGAN is a workgroup where state smart grid initiatives are shared through case descriptions. This DSM case book is a concrete illustration of this kind of cooperation.

    A summary table of the cases included in this case book is found below:

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