HANOI UNIVERSITY OF SCIENCE AND TECHNOLOGY SCHOOL OF ELECTRICAL ENGINEERING ******************** SPECIALIZED REPORTS Topic: Demand response in Japan, South Korea and Singapore Instructor: Assoc. Prof Nguyen Duc Tuyen Students: Pham The Thien 20181925 Khong Truong Thinh 20181927 Ly Duc Trung 20181930 Vu Cong Tuan 20181932 Pham Xuan Tung 20181933 Phung Dang Tung 20181934 Nguyen Hoang Viet 20181935 Phan Trong Vinh 20181936 Hoang Ngoc Vu 20181937 Ha Noi, 7 - 2020 1 TABLE OF CONTENTS TABLE OF CONTENTS.4 1) Overview of the topic:.4 2) Difficulties in this project:.4 3) Scope of the study:.5 5) Structrue of the report:.5 CHAPTER 1: DEMAND RESPONSE DEFINITION AND THINGS RELATED TO DEMAND RESPONSE.1) Definition of demand response:.2) Types of Demand Response:.3) The reason that a company want to participate in demand response:.4) The reason that a utility wants customers to participate in DR programs:.5) How demand response is different from energy efficiency:.6) Providers of demand response:.7) How renewables and demand response tie together.8) Reality check: What could make demand response work effeciently?.11 CHAPTER 2: DEMAND RESPONSE IN JAPAN.1) History of DR in Japan:.2) How DR affects people in Japan.1) Outcome of Demand Response:.2) Details of Demand response:.3) Challenges and development orientation of demand response in Japan.27 CHAPTER 3: DEMAND RESPONSE IN SOUTH KOREA.2) Materials and Methods:.1) Status of Demand Resources Market, South Korea:.2) Development of Demand-Side Management Solution (DSMS):.3) Demand response market programs:.4) Bidding and Market Clearing:.6) Conclusion for demand response in South Korean:.57 CHAPTER 4: DEMAND RESPONSE IN SINGAPORE.3) Benefit of DR participants in Singapore:.1) Double-side biddinng and market clearing:.2) Multi-agent simulation:.3) The way of bidding:.4) The features of the Demand Response programme:.2) Demand side bidding:.3) Incentive payments to DR providers:.76 1) Some images of Tokyo Power Electric Company (TEPCO):.76 2) Leading companies in utilizing demand response:.79 1) Advantages of demand response:.79 2) Challenges of demand response:.80 3) Future of demand response:.80 4) Similarities and diffenences of demand response in Japan, South Korea and Singapore:.86 3 INTRODUCTION 1) Overview of the topic: Nowadays, natural resources management, especially grid stabilizing, has become a growing concern for countries around the world. One of the most reliable and cutting-edge solution for the issue is Demand Response (DR), which act as a way to not only protect the grid system, but also to provide two-way benefits between customers and electricity retailer. The technology, even though has been researched and put into use for a long time, is still a hot topic with much potential to be developed.
This book aims to give readers the most intuitive view of a multi-billion dollars initiative. 2) Difficulties in this project: Although there are a variety of references related to the topic, most of the reliable sources have the excess fee larger than our team’s funding. Besides, since this is our first time forming an academical report, errors such as informal language, or incorrect statistics used are hard to prevent. 3) Scope of the study: In this study, we look into the development of DR programs of Singapore, South Korea, and Japan in order to have a more profound view into the chain of events which lead to the development of DR programs in each country, as well as to facilitate the comparison between each nation’s DR model.
4 4) Research Methodology: We use the method of listing, comparing and analyzing each stage of development of DR model in the three mentioned to clearly visualize DR programs advancement. 5) Structrue of the report: – Table of contents – Introduction – Chapter 1: Demand response definition and things related to demand response – Chapter 2: Demand response in Japan – Chapter 3: Demand response in South Korea – Chapter 4: Demand response in Singapore – Overview – Appendix – References 5 CHAPTER 1: DEMAND RESPONSE DEFINITION AND THINGS RELATED TO DEMAND RESPONSE 1.1) Definition of demand response: Demand Response (DR) is broadly defined as “changes in electric use by end- use customers from their normal consumption patterns in response to changes in the price of electricity, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized. Consumers first may become aware of demand response programs during heat waves, when there are worries about adequate power supply. For example, last summer the New York City grid "shed load" by reducing power at a number of public services, including the Metropolitan Transportation Authority, and utility ConEdison activated a voluntary program to adjust consumers' air-conditioner thermostats at peak hours.
In exchange for participating in these voluntary programs, electricity customers receive a rebate. Without demand response, the grid operators would rely on expensive and polluting auxiliary power plants or, if that didn't provide enough power, being forced to stop supplying certain areas. Demand response also has been a key reliability tool in the winter. The frigid weather last winter caused grid reliability concerns because some generators failed.
In Texas and other places, grid operators called on demand response resources to avoid brownouts or blackouts.2) Types of Demand Response: – Dispatchable Incentive-based DR Programs: 6 + Curtailable Load Program - CLP (voluntary program targeted at the industrial and commercial customers that have flexible production lines with consumption ranging from low levels to high levels). The CLP is an economic based program and is designed to drive efficiency and reduce the cost of production for the marginal unit of electricity. Before 24 hours of the peak hour, utilities will send notifications to customers to request to know whether customsers are able to cut down power usage on the next day. If they could diminish power usage, they will be received an amount of incentive money.
+ Emergency Demand Response Program - EDRP (voluntary program targeted at the industrial and commercial customers that have flexible production lines with a wide rage of consumption levels and are able to change or reduce electricity demand quickly). The EDRP is designed to ensure power system reliability. Demand response is deployed in the event that the power system is overloaded. The main customers of this program are those who can voluntarily cut down power usage quickly and flexibly, usually within 2 hours after receiving the notification.
The rewards for these customers are often of high value. – Non-dispatchable Time-based DR Programs: + A two-tiered electricity price program (demand charge and energy charge; targeted at customers who have already been on Time of Use tariff). There is no direct financial incentive mechanism for this program. Customers need to actively decide to adjust or change their demand to respond to price signals, especially within the peak time period to reduce electricity billing.
For example, if customers participating in the two-tiered electricity price program use electricity during peak hours will be charged twice as much as other time frames. + Real-time peak-load electricity tariff program or PLT-DR (voluntary program targeted at industrial and commercial customers). The price includes TOU tariff and 7 special tariff for the peak time periods (The peak time periods are announced on a case- by-case/time-to-time by authorized operators. – Non-commercial DR Programs: + In this model, there is no financial incentive.
The reward can be a “payment” in the form of preferential treatment if curtailment load is implemented as a last resort measure to maintain integrity of the power system. – Voluntary DR Programs: + In this model, there is no financial incentive. The reward may be in the form of goodwill as the customer is seen as contributing to social good. It is unclear whether and how a corporation can incorporate such goodwill in its accounting system.
This case rarely happens because cutting down power and receiving no rewards will greatly affect production activities and revenue of customers.3) The reason that a company want to participate in demand response: Commercial or institutional customers can save money and help the grid stay stable. Reducing power at peak times can be more or less transparent to the end user, proponents say. For example, changing thermostat settings on a supermarket freezer or dimming the lights in a hotel lobby for 15 minutes can be done in a way that doesn't affect people. How much an individual or company can earn by participating varies by utility and region.
But PJM, considered the most progressive in implementing demand response and related services, pays significant sums out to companies that do voluntary reductions. In one month in 2012, PJM paid out $5 million to demand response 8 providers. Equipment provider Schneider Electric says demand response programs can earn back 5 percent to 25 percent of their annual electricity costs.4) The reason that a utility wants customers to participate in DR programs: In many states, regulators create incentives for utilities to use less energy, particularly at peak hours of the day. Initially, demand response programs were put in place to avoid having to turn on "peaker plants," or auxiliary power plants that may be pressed into service only 10 days a year to meet high demand.
So instead of building new power plants to meet demand, utilities instead can rely on power curtailments. In New York, for instance, 543 megawatts of curtailments are available just from commercial and industrial customers, which is about the same capacity as a medium size power plant. Keeping these plants idle also helps keep the price of power down. Instead of having to call on very expensive power generators to meet high demand in the late afternoon, grid operators can reduce the load and avoid paying peak-time pricing.
In one week in 2012, PJM estimates its region saved more than $650 million in one week from voluntary curtailments.5) How demand response is different from energy efficiency: – Responding means rewards: The key to demand response is in its name. Put simply, it means responding to demand in the market, to balance the supply and demand equation. It can be as straightforward as temporarily reducing your power during periods of high pricing, either partially or fully. This could mean switching over to a backup generator or turning off non-essential operations.
9 – Energy effeciency: Unlike demand response, the goal of energy efficiency is to reduce how much energy your business uses. It’s an ongoing approach that requires more efficient use of power. While demand response generally does not require investment, energy efficient processes may have an upfront cost. This expense could come in the form of paying to better insulate your premises or upgrading to more energy efficient machinery.6) Providers of demand response: Utilities can run their own demand response programs or rely on third-party companies.
EnerNoc and Comverge, for example, install the control equipment at customer sites and manage the curtailments based on price signals from the grid operators. EnerNoc manages tens of thousands of commercial sites from a network operations center where employees monitor energy demand and bid their services into wholesale energy markets. Having two-way communications is a big step forward, says Kellison (Ben Kellison, an analyst at GTM Research). Before, utilities didn’t know for sure how much power actually was shed during peak hours, whereas now they can verify reductions and better control how they use demand response.
For example, a utility may know that one feeder on the distribution grid overloads 10 days a year and and can target that area for demand response participation.7) How renewables and demand response tie together Demand response can be a way to smooth out some of the fluctuations from variable wind and solar. Smooth out some of the fluctuations means to keep the demand of energy to be not too different from the amount of power supplied. Devices such as water heaters or potentially electric vehicles can be adjusted quickly, which means they can compensate for a dip or surge in wind power, says Kellison (Ben Kellison, an analyst at GTM Research). That's one reason why demand response is becoming a bigger topic in Europe, he says.
