In 快活app官网’s wholesale electricity markets, demand resources, like power plants and other supply resources, are competitive assets that help meet New England’s electricity needs. They are separate from retail demand resources, which are offered by utilities and operate outside the wholesale markets.
How Demand Resources Compete
Instead of generating energy that they can sell, as power plants do, demand resources reduce their consumption of electricity from the regional power system. This reduction is their product—it frees up electricity on the grid that can then be used to serve others.
Types of Demand Resources
Demand resources can take many forms. They can be a capacity product, type of equipment, system, service, practice, or strategy—almost anything that verifiably reduces end-use demand for electricity from the power system. (Reductions must be verified using an 快活app官网–accepted measurement and verification protocol.) These resources fall into two general types:
- Active demand resources (also known as demand response resources) are activated when dispatched by the 快活app官网. An example of what a customer might do to comply with a dispatch instruction would be the practice of powering down machines or using electricity from an on-site generator or a storage device rather than from the grid.
- Passive demand resources are principally designed to save electricity across many hours, but cannot change the amount saved in response to a dispatch instruction. Examples include energy efficiency measures, such as the use of energy-efficient appliances and lighting, advanced cooling and heating technologies, and passive generation such as solar power.
DR Participation in the Wholesale Electricity Markets
快活app官网 has had a long commitment to demand resources. Since implementation of the 快活app官网’s first programs in 2001, participation by demand resources has grown from just 63 megawatts (MW) to thousands of megawatts.
June 1, 2018, marked the completion of a complex, years-long effort to fully integrate active demand resources into the regional wholesale electricity marketplace. With the new Price-Responsive Demand (PRD) framework now in effect, active demand resources are fully part of the energy market and reserve market systems and are dispatched economically based on their energy market offers, just like power plants and other supply resources. Passive demand resources, which are not dispatchable, are ineligible to participate in the energy markets. Both active and passive demand resources have been fully integrated into the capacity market since 2010.
More specifically, under the current PRD framework, active demand resources:
- May recieve wholesale market payments comparable to that of generating resources for providing energy, operating reserves, and capacity to the New England electric system
- Are able to submit offers to both Day-Ahead and Real-Time Energy Markets
- Can be committed by the 快活app官网 a day ahead and dispatched in real time
- Are co-optimized to provide energy and/or reserves in the most economically efficient manner
- Are able to set the price for wholesale electricity
In the capacity market, all dispatchable resources receive fully comparable obligations and compensation as other power resources do using the Pay-for-Performance construct.
The graphic below illustrates the various ways New England electricity customers can now fully participate in New England’s wholesale electricity markets. Note the hierarchical organization.
- The actual customer facilities that physically reduce their consumption of electricity are known as demand response assets (DRAs).
- One or more DRAs, each under 5 MW, can be mapped to a demand response resource (DRR) that participates in the energy and reserve markets. A DRA that is 5 MW or larger must participate individually as its own demand response resource.
- Demand response resources can then be mapped to an active demand capacity resource (ADCR) for participation in the capacity market.
- Non-dispatchable passive demand resources—the on-peak and seasonal-peak resources shown below—may only participate in the capacity market.
- On-peak resources offer on their reduced electricity consumption during summer peak hours (nonholiday weekdays, 1:00 p.m. to 5:00 p.m., during June, July, and August) and winter peak hours (nonholiday weekdays, 5:00 p.m. to 7:00 p.m., during December and January).
- Seasonal-peak resources offer on their reduced electricity consumption during the summer months of June, July, and August, and during the winter months of December and January, in hours on nonholiday weekdays when the real-time system hourly load is equal to or greater than 90% of the most recent “50/50” system peak-load forecast for the applicable summer or winter season.
Learn more:
- The Demand Resources page provides access to related data, information, rules, and procedures.
- Find answers to frequently asked questions about demand response at 快活app官网 Newswire
- Access more information and resources on price-responsive demand on the PRD project overview page
