Demand response is key to making facilities more competitive and ensuring grid reliability in the face of increasing energy demands and costs. Implementing demand response strategies allows facilities to better manage energy use, reduce costs, and help utilities balance the grid. Tools like enterprise energy management systems and consumption workshops can help identify savings of up to 30% through strategic planning, automated demand management, and cross-facility collaboration. Case studies show global companies cutting annual energy bills by millions through centralized energy procurement and performance benchmarking across their portfolios.
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Demand Response: The Key to a Competitive Facility
1. Demand Response:
The KEY to a Competitive Facility
Phil Davis
Senior Manager, Demand Response Resource Center
Schneider Electric
2. Energy costs will quadruple by 2030. Power Quality
will degrade. Global competition for fuel, tightening
emissions requirements, and laws demanding
renewable integration will place unimaginable
pressure on a grid that is decades old.
Smart Grid can fix this, but no longer can we exist in
isolation.
3. What makes the Smart Grid Smart?
You Do
Smart Grid is Communications
between Utility and Customer
4. The Energy Dilemma
Sustainability and
Carbon Management
Growing pressure
Rising consumption
on infrastructure
Volatile Wholesale More ambitious
Energy costs environmental goals
Fiercer global
Water shortages
competition
Tighter economic Regulatory
pressure Complex sourcing demands
options
We need to solve these challenges
to make the difference!
5. Energy is a Management Challenge
Demand Response is a Management
Solution
7. Pre 1990 Power Grid
Physical &
Generation Transmission Distribution
Distribution Consumers
Transaction Flow
Players Utility
Systems Scada, Control Room (DMS), Outage Mgmt, Meter Data, Forecasting, CIS
8. The new Grid equation - detailed
drivers accelerators
Growing electricity demand: New technology available
-new economies: demography, -information technology, cyber-security
industrialization & urbanization -energy storage, power electronics…
-mature economies: peak management
-new consumption modes (eg electrical vehicles)
Active government & regulators:
-deregulation & opening of markets,
Need to reduce CO2 emissions: introduction of price transparency
-development of Renewable Energy sources -need for security of supply & price stability
-focus on energy efficiency -increasing economic cost of blackouts
-stimulus packages, investment in electrical vehicles…
Constraints on existing networks:
-limited generation capacity
Active end-users:
-look for competitive prices
-limits on network extension
-want to contribute to CO2 emissions reduction
(Not In My BackYard syndrome)
-aging infrastructure and assets -ready to play active role (control consumption,
-integration of intermittent & distributed generation produce energy, drive electrical cars…)
making the smart grid happen
9. Post 2000 Smart Grid
Physical Flow Generation Transmission Distribution Consumers
Genco Transco Utility Marketer
Players Renewco DR Aggregators
ISO
C&I Onsite
Demand Management
Transaction Flow
Systems Scada, Control Room (DMS), Outage Mgmt, Meter Data, Forecasting, CIS Upgraded
+ Energy Mgmt, Trading/Risk, Settlement, Billing, Scheduling, Portfolio Mgmt. Upgraded
+ Demand Mgmt., Customer EMS, NOC, AMI, Communication, BAS/Energy Controls
10. Different Regions, Different Goals
Smarter Grids
Deregulation & Distributed
Transmission overload Generation
& aging infrastructure • Competition for supply
• Blackouts • Integration of Renewable
• Critical peak situations Energy sources
• Price volatility • Increasingly constrained networks
• Cyber-security issues
Growing energy Growing energy demand
• Growing consumption
demand… and losses
• Transmission congestion
• Critical peak situations
• Energy theft • CO2 emissions
Distribution infrastructure
modernization
• Growing consumption
• Energy theft & losses
• Generation & Transmission
modernization
14. Case study - Global Pharmaceutical Tech
Company
Plan Strategy
Situation:
Global pharmaceutical tech company wanted to
cut energy costs in its facilities across 4 continents
Needed an efficient way to involve a number of
global facility-level personnel in the process
Solution:
Consumption Workshop, proprietary exercise to
uncover strategies for reducing energy costs and usage
Forum for plant personnel to collaborate with corporate leaders about key projects and
strategies
Employees from 16 facilities, including sites in France, Italy, Belgium, United Kingdom,
Puerto Rico and the U.S., participated in the workshop.
Results:
Identified $2.6 million in energy savings during the Consumption Workshop, most of
which could be realized with little or no capital investment.
Savings represented 9% of the company’s total annual energy spend
Collaboration among the facility teams for the first time
15. Case Study - Global Manufacturing
Company
How Do I Buy?
Situation:
Decentralized global manufacturer with 44 sites in 18 countries with each site handling
energy management efforts independently
Solution:
Identified countries in the portfolio that offered greatest opportunities
Reviewed risk management and tariff and sourcing options
Large site in Singapore was about to enter into a new contract that would lock in
electricity price that Summit team anticipated would go lower
Recommended waiting to lock to take advantage of expected downward market
movements that would save the company money
Results:
The company centralized its approach
Corporate energy leader could make more informed
hedging decisions across all 44 facilities.
Singapore site lowered its long-term electricity costs,
eliminating potential volatility, saving 10%
16. Case Study - Automotive Company
How Do I Control?
Installed Enterprise Energy Management System (EEM)
Smart energy monitoring resulted in:
Cost savings
Faster access to reporting
Conservation initiatives
Ongoing Measurement & Verification
Measurement and Verification continues the
lifecycle focus and leads Ford through
revisiting their energy strategy
17. Case Study - Veolia, Indianapolis LLC
How Do I Optimize?
Production process scheduling
Install WAGES monitoring & control to forecast filter
loadings and initiate backwashes to avoid peak
utility demand periods
Pumping system optimization
Provide demand sub-metering and hydraulic
modeling intelligence to optimize system for any
given flow and pressure condition
Install adjustable speed drives
Control inefficient discharge valve control to maintain Results
system pressures and flows at desired levels $764,630 annually
Diesel driven pumping 3.2 year payback
Install WAGES monitoring & control to monitor 6,818 kW
critical parameters, remotely start/stop pumps during 12,458,300 kWh
peak electrical periods to reduce utility charges -3,690 dT
On-site generation
Fully monitor and automatically operate on-site
diesel generators for peak efficiency
18. Case Study - Global Glass Manufacturer
How Am I Performing?
Situation:
One of the largest glass manufacturers in the world,
producing 30 billion glass containers a year
Needed help tackling its sustainability challenge
Solution:
With access to the company’s corporate-wide energy information, analyzed data
to create GHG emissions baseline
Developed GHG inventory by defining boundary conditions, outlining scope
definitions upon verifiable data and auditable processes
Results:
The glass manufacturer could track and report on greenhouse gas emissions at
both the site and enterprise levels.
The company began to leverage emissions data from multiple streams and
scopes, benchmark performance against baseline data, and maintain a database
of sustainability project initiatives
Gained an understanding of historical emissions data, used information for
corporate sustainability benchmarks and initiatives
20. Demand Reduction Identification
Schneider Electric Energy Solutions Provided a Demand Reduction Plan for a large Iron Manufacturer
Estimated Thyssenkrupp/Waupaca Plant #5 Electric Load Breakdown
(kW)
7/8 Furnace Inductor , 840 Lighting, 300 Motors
Dust Collectors
5/6 Furnace Inductor , 840
Air Compressors
Transformer Losses, 1,106 HVAC, 300
Air Separation Plant
Task: Find demand reduction measures after Furnace #3 Inductors, Misc, 200
Motors, 11,969 Furnace #1 Inductors
1,440
a rate structure change increased monthly Furnace #2 Inductors,
Furnace #2 Inductors
Furnace #3 Inductors
electric costs 1,440
Transformer Losses
Furnace #1 Inductors,
Five demand reduction projects were 1,440
5/6 Furnace Inductor
7/8 Furnace Inductor
identified Air Separation Plant, 1,600
Lighting
Dust Collectors, 3,758
Demand savings are 3,500 kW Air Compressors, 3,988
HVAC
Misc
Electric savings are 15,141,360 kWh WF Elelctric Demand Profiles
Electric cost savings are $823,200 per year Stacked Line Chart - May 2009
Implementation cost is $710,700 with an
estimated payback period of 0.9 years 30,000
Detailed reporting that describes 25,000
Existing demand profile, with analysis for the
summer, winter, and shoulder months
20,000
Electric Demand (kW)
Peak electric load breakdown
Current rate schedule
Estimate of demand curtailment hours 15,000
Demand reduction measures with conceptual
implementation methods and estimated costs
10,000
Description of available rebates and incentives
Additional opportunities for energy savings
5,000
The detailed report utilized data from the
enterprise metering system to complete the 0
analysis 5/9/09 5/11/09 5/14/09 5/16/09 5/19/09
21. Integration Potential
Power
Value proposition
Process
ONESite up capital for strategic investment by reducing
Freeing
Site Supervision
your energy use up to 30%
IT Manager
Safeguarding the assets that make your enterprise
successful
Facility
Reduce your total cost of ownership
Security
Enhance facility market value (5 to 10%)
23. By meeting the IEA estimate of 16%
chemical industry energy efficiency
improvement by 2020, a major chemical
company could lower its annual energy bill
by $4.3 Billion vs. its 2008 spend1
1
National Academy of Engineering, Potential of Energy Efficiency,
24. Information does change behavior:
6% just being available
As much as 30% when informed action is taken
25. Thank You
Phil Davis
Senior Manager, Demand Response Resource Center
Schneider Electric
Editor's Notes
Good afternoon. Demand Response, if you know it at all, is a controversial topic. “Let’s shut down our plant for money” seems to be the take away; and on that basis alone, managers decide whether to participate in programs or not. Until the last couple of years, this was a reasonable approach. Things are changing, and rapidly. If you’re not keeping up, you’re falling behind. Over the next 45 minutes, we will explore why.
These are disturbing statements, if you believe them…and you should. In most developed nations, the grid has been a stable, reliable - and ignored – part of life’s infrastructure. However, our political leadership and regulators also view the grid as a common element that impacts us all, and therefore must be part of the solution to many of the problems we face today. New laws requiring renewables integration are clashing with an aging infrastructure left to decline both to keep costs down and because no one wants new infrastructure in their back yard. Emerging Smart Grid technology can be very effective in resolving these conflicts, but this is not passive technology.
The traditional grid always has been “smart”. Backed by talented people and sophisticated models, our grid is the largest, most reliable machine ever conceived by man. Today, when we say “Smart Grid” we mean YOU. To solve tomorrow’s problems, we have to distribute grid intelligence further out the distribution system and even include some things going on behind the meter. “Behind the meter” is utility speak for customer – and again, that’s you. Some fun facts: electricity productions accounts for 40% of all our water consumption and fossil plants are can be major emitters. Clearly, smarter energy means better water and better air as well. The major consuming industries here in the US are water/waste water, IT (Date Centers), and collectively, all those gaming consoles your kids play with (and maybe you as well). Here in the US, those account for 1% of total energy consumption – 16gwh annually. Oh, and by the way, it’s very likely that your utility does not know when your power is out until someone calls it in. Only when outage levels rise significantly above the noise levels of normal demand fluctuations, do they suspect. But without a smart grid, they still may not know the problem area and can waster precious time looking for the fault. So when your power is out, call it in.
Let’s peak behind the curtain and the orderly and calm lives of utility managers: Wholesale energy costs are highly volatile Water shortage concerns causing conservation to become priority Sustainability is key to customers, shareholders, media and employees Integrating energy efficiency into your company’s culture GHG intensity increased 5 percent in 2011 And… Regulatory demands are escalating Sourcing options are getting more complex Political and public pressure is mounting More internal & external parties demanding access to your energy data Reporting requirements are becoming more rigorous
In light of this, it’s time to take a new look at Demand Response. It’s not what you think.
While you may not think of your utility often, it thinks od you, a lot. This is what you look like to the control room of your local utility. The reds, whites and purples are hot spots shown on various utility systems. If your location is in one of these areas, you have a problem. Your facility is much more vulnerable to disruption and quality issues than are your neighbors in the quiet zones. Traditionally, demand response has been used in extreme cases to relieve these stress points. In the future, it will prevent them from ever occurring.
This is our good old familiar grid. Calm, safe, reliable. Not much going on, and it just worked.
Since about 2000, all the trends we’ve discussed have been accelerated by new technology, government and regulator policy changes, and newly aware and active energy consumers who want more than just electricity. This leads us to a world accelerating much more quickly than the traditional 10-15 year horizon utilities need for new generation and transmission assets.
So now, our nice calm environment is broken apart. Where we once had integrated monopoly suppliers, now we have local distribution companies with independent generators and transmission on the supply side, and retail energy markets, demand response aggregators and a host of others on the demand side. This disrupts culture, business processes, customs, relationships, …literally everything about the way utilities operate. Managing in this environment requires more sophisticated systems and new links between them. It’s also added an historically unheard of element, Demand Management.
The problems to be solved vary in different regions. The solutions look to be similar, though tweaked for local needs.
Ultimately, Demand Response is synonymous with comprehensive energy strategy. It is the tool that unites many of the competing needs of your organizations, and brings coordination and true production efficiency to the process of satisfying all stakeholders.
No more is DR a “shut down” for money equation where managers often operated with fear, uncertainty and doubt. Today’s DR, called “DR 2.0” in some circles, is a mainstream part of daily operations. For example, tanks used in process storage as among the most effective “batteries” to store energy for later use. Sophisticated algorithms can use forward pricing curves and solve production scheduling equations to produce the least cost output for today, and may repeat the same process tomorrow with a different result. The ability to create and control your own energy profile then supports an energy procurement contract that charges discounted rates that acknowledges this ability, potentially saving $ millions annually.
The percentage
Source for this, Global Estimates from IEA, 2007 Opportunities to save include Improving Existing Production Processes Advanced Control and Optimization Improving the Yield of Raw Materials Reducing Gas Flaring Commercializing New Processes Recycling Waste Investing in Renewable Raw Materials Producing Epichlorohydrin from Glycerine Dow has announced plans for a world-scale glycerine-to-EPI unit in China, and a stand-alone pilot plant for this technology began operating in 2006 at Dow’s production site in Stade, Germany. Producing Polyols from Natural Oils The new chemistry for producing polyols fromnatural-oil feedstock is greenhouse-gas neutral. Refrigeration Water Purification Power Generation