Cleantech Market Intelligence
FERC Releases Latest DRAM Report
In December 2016, the Federal Energy Regulatory Commission released its 11th annual Assessment of Demand Response and Advanced Metering (DRAM) report. The report is meant to provide an update on national, regional, state, and utility progress in these two interconnected fields. Much of the report focuses on data and growth trends, but it also delves into regulatory and policy drivers and barriers in the markets to explain the trends. Publicly available data sources such as the US Department of Energy, regional transmission operators (RTOs), and state public service commissions were used for the analysis.
Starting on the metering side, the DRAM report states that an additional 6.6 million advanced meters were installed and operational in the United States between 2013 and 2014, for a total of 58.5 million meters. The penetration of advanced meters is also up from approximately 9% in 2009 to 41% in 2014. Regionally, Texas has the highest penetration at 80%, the Western Electricity Coordinating Council (including California) sits at 60%, and Florida is at 57%. After that, there is a large drop-off, with no other region above 35%; the Northeast Power Coordinating Council (New York and New England) is the lowest at 10% as of 2014. The report notes regulatory activities in numerous states that point to continued deployment of advanced metering infrastructure (AMI) across the country.
Regarding demand response (DR), potential peak reduction in the RTOs, independent system operators (ISOs), and Electric Reliability Council of Texas (ERCOT) markets increased to 31,754 MW, a 10% increase from the previous year, outpacing peak demand growth of 4%. The contribution of potential peak reduction to meeting peak demand increased to 6.6% in 2015, up from 6.2% in 2014. This increase can be explained to some degree by changes in the ISO-NE and PJM markets, which display the largest increases. The ISO-NE data includes energy efficiency, which continues to grow in the region while DR has remained flat. In PJM, the capacity price increased significantly in 2015, leading to a rise in DR in the market. However, in 2016, the price went back down and DR participation dropped.
Utilizing New Resources
The report also notes that the North American bulk power system is integrating an increasing level of DR, variable energy resources, and distributed energy resources. As a result, the North American Electric Reliability Corporation (NERC) is considering how these resources can be reliably integrated into the operation and planning of the bulk power system, as well as how these resources affect generation and load resources. To better understand and measure the performance of DR, NERC developed and approved four new DR metrics in 2015. These new metrics measure enrollment and event information to determine actual performance, including the resource’s contribution to improved reliability. Future efforts intend to focus on improving data collection, maintaining data quality, and providing observations of possible DR contributions to reliability.
The report closes by highlighting three barriers to DR growth: implementing time-based pricing, lack of additional market opportunities beyond emergency/capacity type programs, and coordination of federal and state policies. Those should all be easy to overcome by the next DRAM report in a year, right?