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Reducing Peak

Updated February 2, 2018

Description

New York State utilities are making costly infrastructure upgrades to meet periods of increased peak demand for power, including at specific substations or circuits, while experiencing relatively flat overall electricity sales. This causes New York’s electric grid to have a low system efficiency (i.e., to be under-utilized during off-peak periods), and increases retail electricity prices for customers to cover the costs of the upgrades driven by peak demand.

REV Connect is facilitating innovative ideas and scalable business models (separate from open NWA procurements described below) that work in partnership with utilities to increase the flexibility of customer demand and reduce peak demand on the bulk electric system, the distribution grid, and/or local substations or circuits.

Possible utility partnership opportunities could include:

  • Designing innovative demand response (DR) models built for increasing penetration levels and providing cost-effective peak curtailment—for example through expanding automated DR, bring your own device models, price-based DR, and behavioral DR that leverages advanced metering data
  • Aggregating residential and small business (mass market) customers for reducing peak demand and increasing demand flexibility through a variety of DER
  • Developing market platforms coupled with smart technologies that enable customers to provide peak reduction and other grid services, such as deploying spare capacity from DER they own
  • Offering energy storage solutions to customers that a utility can deploy when needed to meet grid needs but otherwise are available to the customer for their own purposes
  • Supporting new combinations of DER products and services that combine smart technology offerings with information, data analytics, financial services, or other value-added services
  • Establishing business and market models that reconcile short-term grid needs (~4 years) with the longer-term life of DER assets (~20 years)
  • Designing deployment models that encourage open communications standards and interoperability across devices, multiple vendors, and growing consumer choices

Non-wires alternative (NWA) projects are an important way for utilities to defer or avoid conventional infrastructure investments by instead procuring lower cost distributed energy resources (DER) that reduce peak demand while maintaining or improving system reliability. Utilities must identify imminent, critical system upgrade projects for NWA consideration. Responses to open NWA procurements should be made directly to the offering utility—not through REV Connect.

Utility-Specific Interests

Utility Propose Ideas Via Interests
Central Hudson REV Connect Interested in customer-sited storage and business models in which DER is compensated based on the Value of DER, as well as new technologies that may be deployed in future NWA projects
Con Edison Existing programs
Upcoming RFPs for NWA projects		 Actively seeking and deploying peak management solutions to address significant challenges and the high cost to meet peak demands
Has numerous existing programs and initiatives, including Brooklyn Queens Demand Management (BQDM), the Demand Management Program (DMP), DR, energy efficiency, and NWA RFPs
National Grid REV Connect Interested in partnerships that leverage DER to manage and reduce peak system demand across our territory and in specific locations
NYSEG and RG&E REV Connect Interested in ideas for peak reduction solutions, including energy storage
O&R Existing programs and upcoming RFPs for NWA projects
REV Connect for any other ideas		 Interested in storage and other turnkey solutions to help solve system needs, including within future NWA applications
Has ongoing programs and RFPs for energy efficiency, DR, and NWA projects

 

REV Context

Reducing peak demand can create economic value for customers and the grid through:

  • Avoiding or deferring the costs of peak-driven grid infrastructure upgrades
  • Avoiding capacity market costs
  • Reducing energy costs for customers during peak times
  • Improving reliability
  • Providing low cost flexibility to integrate variable renewable energy resources
  • Reducing greenhouse gas (GHG) emissions

The New York utilities are exploring several solutions to reduce peak demand, including NWA projects, DR, targeted energy efficiency, distributed generation, and emerging technologies for energy storage solutions. Current and upcoming NWA procurements for each New York investor-owned utility are posted on the REV Connect website.

New York utilities can propose and earn shareholder performance incentives—known as earnings adjustment mechanisms (EAMs)—for achieving peak reduction targets and improving system-wide efficiency.

Resources

For more information, see:

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