Smart Energy Report

Smart Energy Appliance Report

The report “Demand Response into the Netherlands” offers full details on the technical and economical parameters of using smart grid technology to monetize the energy consumption flexibility. This can work with and without smart metering. Below you can view the summary of the report for free and request an offer for the full 100+ page report with 35 figures and 18 tables. In addition access can be provided to simulation models for assessing economic value under different market conditions or different appliance parameters.

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SummaryTable of ContentIndex of FiguresIndex of Tables

This report takes a look at practical deployment of a new trend in electricity grids: the smartgrid. This is a grid, unlike the old passive grid, that uses IT and communication technology to actively manage load and generation to reach higher efficiencies, lower CO2 emissions and avoid grid congestion.

Dutch parliament recently agreed the introduction of smart meters. This report takes a perspective on how to actually manage electricity consumption in Dutch homes. As a starting point it takes the view that end users should not be required to be continuously active and conscious about energy use and planning: the nuisance and aggravation caused would only be acceptable to a few determined enthusiasts. It assumes smart appliances (like washing machines and refrigerators) have a network interface and can be installed like any appliance today. Smart energy services help manage power consumption to take place on the most opportune time fully taking into account user preferences and energy generation and delivery costs.

The report identifies the appliances in homes today and tomorrow that can be usefully managed in terms of the time of their energy consumption. This is called Load Shifting, a specific version of “Demand Response”, the creation of a more flexible power demand which has been pioneered in the USA since the early 1980’s. Simple models for the various appliances have been created that permit simulation of their power use behavior over time, and the key parameters for these models have been identified using existing research reports.

The communication technologies are identified that are most suitable for simple and quick deployment of such appliances and a proposal is presented for a simple communication protocol to manage such appliances that is future proof by allowing cloud based control intelligence to be updated over time. This relatively simple protocol has not been found in existing standards and specifications in this field.

The economic analysis of the identified appliances using the power consumption models shows that reasonable financial results (50..75% saving on actual energy cost) can be obtained using today’s day ahead (APX) and balance market (“onbalans markt”). Literature on large scale wind energy integration in power grids shows that load shifting can yield significant savings in CO2 and cost for addition spinning reserve needed to handle wind power unpredictability and power station wind down and power up cycles. Also Distribution System Operators like Enexis can achieve quantified savings on grid losses and network investments.

The overall revenues are modest and take substantial time to build due to slow replacement cycles of domestic appliances. They are sufficient however to justify a single country-scale investment in a smart energy service platform.

An introduction roadmap is presented that shows earliest market deployment by early 2015 is possible, which would be approximately 4 years faster than following today’s roadmap of Netbeheer Nederland. Full market coverage by smart appliances requires approximately 15 years after market introduction. The overall scale that can be achieved is 600MW of controllable power, and 5000MWh of equivalent energy storage, which should be able to compensate for a substantial amount of unpredictability in wind energy.

Summary ii
Preface iii
Table of Content v
Figures Index vii
Tables Index viii
1 Introduction  1
1.1 Smartgrids and Demand Response
1.2 Context of this Investigation
1.3 Scope of Investigation
1.4 Structure of Report
2 Smart Appliance Opportunities  4
2.1 Smartgrid Status and Outlook
2.2 Demand Response History and Outlook
2.3 Demand Response and Load Shifting Characterization
2.4 Smart Appliance General Observations
2.5 Smart Appliances Candidates
2.6 Summary and Conclusion
3 Network Functionality Definition    18
3.1 Nature of Smart Appliance Network Interface
3.2 Abstracted Network Smart Mode Appliance Interface Proposal
3.3 Discussion
3.4 Communication and Networked Intelligence Options
3.5 Options for Short Term Deployment
3.6 Role of Standards and Standard Infrastructure
3.7 Summary and Conclusion
4 Economic Benefits    31
4.1 Existing Insights
4.2 Structure of Benefit Analysis
4.3 Environmental Benefits
4.4 Impact on Generation
4.5 Balance Market
4.6 Grid Losses
4.7 Grid Investment Impact
4.8 Unconstrained versus constrained Grids
4.9 Impact of Dutch Energy Tax and Sustainable Energy Subsidies
4.10 Summary and Conclusion

5 Market Introduction    67
5.1 Overview Benefits
5.2 Business Case Smart Appliances
5.3 Smart Energy Services Stakeholders Alliances and role of DSO
5.4 A European Perspective
5.5 End user perspective: the value proposition
5.6 Roadmap for Introduction
5.7 Impact on Power Market
5.8 Summary and Conclusion
6 Conclusions and Recommendations    79
6.1 Conclusions
6.2 Recommendations
6.3 Further Research
7 References    82
Annex A Time behaviour of load shift models
Annex C Investment Economy of Load Shifting
Annex D Optimal Cost for Continuous Switching
Annex E 2006 Balance Market Interval Statistics
Annex F Details of Business Case Calculation

1  Time shifting Power Consumption in Simple Load Sifting Model
2  Time shifting power consumption of an interruptible Load Appliance.
3  Detailed heat transfer model of a freezer or refrigerator.
4  Simplified heat conductance model
5 Simplified time model for power consumption in case of continuous switching.
6  Timeshifted continuous switching model example.
7 Aggregate of the consecutively scheduled simple load shift appliances.
8  Aggregate of two continuous switching appliances creating a temporary load dip.
9  Appliance Network Interface Options.
10 CO2 Mitigation Effects of Load Shifting in High Wind Power Situations.
11  Ecomomic Benefits of Variable Pricing.
12 Market shifts in a liberalized market.
13 Load Shifting Economic Value Effects.
14  Average gain for a time shift of maximum 12 hours initiated between 7am and 10pm.
15  Relative frequency, average gain and cumulative gain at hour of consumption.
16  Hour of power consumption as function of initiation hour.
17  Power Cost gain on APX by a continuous switching appliance.
18  Dutch balance Market Prices and APX from Sat May 12, 2006 to Tue May 15, 2006.
19  Revenue per Average Power Use Managed as function of Toff.
20  Balance Market Revenue per MWh of managed average power for four strategies.
21  Balance market strategies based on storage and on opportunistic models.
22  Revenue per Average Power Use versus Toff for different years.
23  Time Pattern of Power consumption of a Washing Machine.
24  Dutch daily grid load on highest load days in 2007 and 2008.
25  Normalized grid losses based on daily load patern.
26 Marginal grid loss approximation based on total grid load.
27 Grid Losses avoided including energy tax and VAT due to load shifting.
28  Transformer Utilization Distribution.
29  Grid investment benefit as function of annual growth of load.
30 Cumulative Discounted Cashflow using APX Market.
31  Cumulative Discounted Cashflow using Balance pricing.
32  Proactive roadmap towards demand response for retail customers.
33  Best fit to Netbeheer Nederland roadmap.
34 Comparing DR and peakload investment.
35 Comparing DR and baseload investment.

Table 1  Technical Parameters of Candidate Smart Appliances.

Table 2 Generic Requirements for Network Smart Mode Appliance Interface.

Table 3 Requirements for Network Smart Mode Appliance for Simple Load Shifting.

Table 4 Requirements for Network Smart Mode Appliance for Continuous Switching model.

Table 5  Celenec EN 50065-1 Powerline Frequency Table.

Table 6 Cell Phone Technologies.

Table 7 Communication Protocols with Complementary Application Protocol.

Table 8 Zigbee SEP1.0 Smart Energy Appliance Types.

Table 9  Independence of Benefits of Load Shifting.

Table 10  APX gain per year for domestic basic time shift appliances.

Table 11  APX gain with continuous switching appliances.

Table 12  Balance market annual revenues of  continuously switching appliances:2005-2010.

Table 13  Combined 2006 APX Balance market result for a Dryer using different strategies.

Table 14  Balance Market result washing machine and adapted washing machine.

Table 15  Grid Investment Reduction Benefits for load shifting appliances.

Table 16  Overview of Smart Appliance Benefits.

Table 17 Overview DR Benefits and Benefactors.

Table 18 Scale of Managed Power and Equivalent Storage Capacity.