An efficient hybrid structure to solve economic-environmental energy scheduling integrated with demand side management programs

For the past three years (1989, 1990, and 1991), all US electric utilities that sell more than 120 GWh/year have been required to report to the Energy Information Administration data on their demand-side management (DSM) programs. These data provide a rich and uniquely comprehensive picture of electric-utility DSM programs in the United States. Altogether, 890 utilities (of about 3250 in the United States) ran DSM programs in 1991; of these, 439 sold more than 120 GWh and reported details on their DSM programs. These 439 utilities represent more than 80% of total US electricity sales and revenues. Altogether, these utilities spent almost $1.8 billion on DSM programs in 1991, equal to 1.0% of total utility revenues that year. In return for these (and prior-year) expenditures, utility DSM programs cut potential peak demand by 26,700 MW (4.8% of the national total) and cut annual electricity use by 23,300 GWh (0.9% of the national total). These 1991 numbers represent substantial increases over the 1989 and 1990 numbers on utility DSM programs. Specifically, utility DSM expenditures doubled, energy savings increased by almost 50%, and demand reductions increased by one-third between 1989 and 1991. Utilities differed enormously in their DSM-program expenditures and effects. Almostmore » 12% of the reporting utilities spent more than 2% of total revenues on DSM programs in 1991, while almost 60% spent less than 0.5% of revenues on DSM. Utility estimates of future DSM-program expenditures and benefits show continuing growth. By the year 2001, US utilities expect to spend 1.2% of revenues on DSM and to cut demand by 8.8% and annual sales by 2.7%. Here, too, expectations vary by region. Utilities in the West and Northwest plan to spend more than 2% of revenues on DSM that year, while utilities in the Mid-Atlantic, Midwest, Southwest, Central, and North Central regions plan to spend less than 1% of revenues on DSM.« less

PurposeThe purpose of this paper is to examine potential demand side management (DSM) programs in terms of their impacts to the overall economy in Thailand.Design/methodology/approachA multi‐sector computable general equilibrium (CGE) model of Thailand has been developed to accomplish the objectives of this study. The potential DSM program considered refers to replacement of less efficient electrical appliances with their efficient counterparts in the household sector in Thailand.FindingsThe study finds that the economy‐wide impacts of the DSM program (e.g., economic welfare, GDP, international trade) depend on three key factors: the project economics of the DSM option or the ratio of unit cost of electricity savings to price of electricity (CPR); the implementation strategy of the DSM option; and scale or size of the DSM option. This paper shows that the welfare impacts of the DSM programs would improve along with the project economics of the DSM programs. If the DSM program is implemented under the CDM, the welfare impacts would increase along with the price for certified emission reductions units. On the other hand, the welfare impacts would increase up to the optimal size or scale of the program, but would start to deteriorate if the size is increased further.Research limitations/implicationsThe welfare function considered in this paper does not account for benefits of local air pollution reductions. The study provides crucial insights on designing DSM projects in Thailand to ensure that DSM programs are beneficial for the economy as a whole.Originality/valueAnalyses of DSM options under the CDM using CGE models are not available in the literature. This is the first paper in this area.

The Cross-Laminated Timber (CLT) has been receiving special attention in recent research as an alternative for climate change mitigation since it is a renewable source and can remove and stock high amounts of CO2 from the atmosphere. Some countries, such as Brazil, still do not have mature and large CLT industry. However, the development of this industry in other countries is expected since the CLT is considered the main wood material to be used in high-rise mass timber buildings. It is particularly important to have environmental information, especially concerning the climate change impacts, in terms of life cycle greenhouse gas (GHG) emissions, for this product to increase its competitiveness in a new market. In this context, this research aimed to evaluate three different Life cycle inventories (LCIs) for CLT production of studies from Japan and the United States. Based on the first findings, we summarized the critical items in the LCI of CLT production and listed some actions for the reduction of GHG emissions that occur in this process. The LCIs are adapted considering the context of Brazil (a country with a cleaner electricity matrix) and China (a country with the highest share of fossil fuels). The main inconsistencies present in the LCIs are presented and discussed. The GHG emissions are concentrated in the following hotspots: (1) Roundwood production; (2) electricity consumption; and (3) adhesives production for CLT production. Therefore, the reduction of the consumption of these materials and activities should be encouraged for the decrease of GHG emissions. The data of Roundwood used in the modelling severely affects the final results. Their GHG emissions are related to the consumption of diesel in forestry activities. This research brings insights into the evaluation of the life cycle GHG emissions from the production of CLT.

Over the past decade and a half, state governments have assumed greater responsibility over demand-side management (DSM) operations. Whereas DSM programs formerly were initiated primarily by utilities or state public utility commissions, they are now becoming increasingly state-initiated and incentivized through funding mechanisms or efficiency-level mandates. The supporting literature, however, has yet to respond to these changes, and to verify that DSM funding or mandates are effective policy mechanisms. Furthermore, the supporting literature has yet to resolve some of the research design and methodological challenges that traditionally plague DSM evaluations. As states continue to expand their energy and climate policy efforts, and the federal government considers the possibility of national decarbonization policies, of which DSM is a key strategy, the need for empirical research on the effectiveness of DSM programs will grow. This essay describes the current status of DSM efforts in the U.S. and explores how these programs affect electricity operations. The relationship between DSM policy and program efforts and the amount of saved electricity is tested, with a methodological approach aimed at minimizing selection bias that is inherent in the non-experimental research design. Results confirm that state-run DSM efforts contribute to electricity savings across the country. Public benefit funds coupled with performance incentives are found to encourage utility participation in DSM programs. Energy efficiency portfolio standards and performance incentives effectively promote electricity savings; but public benefit funds without the support of other DSM policies are not significant drivers of either DSM program participation or total DSM electricity savings.

Over the past five years, the Energy Information Administration (EIA) has been collecting data annually from US electric utilities on their demand-side management (DSM) programs, both current and projected. The latest data cover activities for 1993 and projections for 1994 and 1998. In 1993, 991 utilities operated DSM programs. That year, they spent $2.8 billion, a 13% increase over 1992 expenditures. These and earlier DSM programs saved 44,000 GWh of energy and reduced potential peak demand by 40,000 MW, 30% and 22% increases over the 1992 values, respectively. While some people predict the demise of electric-utility DSM programs, the data do not paint so bleak a picture. In most parts of the country, DSM programs grew in 1993 and utilities (as of Spring 1994) projected continued growth through 1998. Expenditures grew from 1.3% of revenues in 1992 to 1.5% in 1993, and are expected to grow 2.5% per year faster than inflation, which is equivalent to revenue growth. Thus, DSM spending is expected to stay constant at 1.5% of revenues through 1998. Because of the cumulative effect of DSM programs, energy savings are expected to grow from 1.2% of sales in 1992 to 1.6% in 1993 and 3.0% in 1998. Potential-peak reductions are expected to increase from 5.9% of peak demand in 1992 to 6.8% in 1993 and 8.9% in 1998. However, the growth in spending is not as rapid as the 8% annual real growth projected a year earlier. Actual expenditures in 1993 were 6.5% lower than projected early that year. Energy savings, on the other hand, were the same as projected earlier. Potential peak reductions were actually 9% higher than previously projected.

Over the past decade and a half, state governments have assumed greater responsibility over demand‐side management (DSM) operations. Whereas DSM programs formerly were initiated primarily by utilities or state public utility commissions, they are now becoming increasingly state‐initiated and incentivized through funding mechanisms or efficiency‐level mandates. The supporting literature, however, has yet to respond to these changes and to verify that DSM funding or mandates are effective policy mechanisms. Furthermore, the supporting literature has yet to resolve some of the research design and methodological challenges that traditionally plague DSM evaluations. As states continue to expand their energy and climate policy efforts, and the federal government considers the possibility of national decarbonization policies, of which DSM is a key strategy, the need for empirical research on the effectiveness of DSM programs will grow. This essay describes the current status of DSM efforts in the U.S. and explores how these programs affect electricity operations. The relationship between DSM policy and program efforts and the amount of saved electricity is tested with a methodological approach aimed at minimizing the selection bias that is inherent in the nonexperimental research design. Results confirm that state‐run DSM efforts contribute to electricity savings across the country. Public benefit funds coupled with performance incentives are found to encourage utility participation in DSM programs. Energy efficiency portfolio standards and performance incentives effectively promote electricity savings, but public benefit funds without the support of other DSM policies are not significant drivers of either DSM program participation or total DSM electricity savings. © 2011 by the Association for Public Policy Analysis and Management.

This report is the first Annual Report of the International Database on Energy Efficiency Programs (INDEEP), summarizing the activities of the first year (1994--1995). During this time period, the authors conducted the following activities: (1) reviewed existing international demand-side management (DSM) program data bases; (2) reviewed participating country`s experience in DSM program evaluation; (3) prepared case studies on 1--4 DSM programs per country; (4) tested the DEEP data collection instrument (DCI) and prepared an INDEEP DCI; (5) contacted potential users of the INDEEP data base; and (6) organized an INDEEP workshop. As a result of these activities, the authors accomplished more in the first year than what was expected, so that the work planned for five years can be accomplished in a shorter period of time and with a reduced budget. The key findings from the first year are the following: (1) based on a review of the literature and discussions with DSM experts in the participating countries, they found the proposed INDEEP data base to be unique and not duplicative of other data bases; (2) after intensive ``field testing`` of the INDEEP data collection instrument (DCI) on 14 European DSM programs, a four-page DCI was developed that INDEEP experts agreed to use for data collection in the second year of the project; (3) based on informal networking, DCI field testing, meetings with potential users of the INDEEP data base, and the INDEEP workshop, they found substantial interest in the INDEEP project, particularly from DSM program designers; (4) discussions with DSM experts in the participating countries and at an INDEEP workshop attended by over 40 European DSM experts led to a consensus for the project to proceed for another year, focusing on: (a) additional data collection, (b) entering of data onto an Excel spreadsheet, and (c) close collaboration with potential users, building upon the existing network established in the first year.

The roadmap of the Smart Grid project includes exploiting the intrinsic elasticity of electricity demand in the future, to make it responsive to the near term cost of supplying generation. This would curb costly peaks of demand and allow for a greater penetration of renewable energy sources. The mechanisms serving this purpose are referred to as Demand Side Management (DSM) and Demand-Response (DR) programs. While it is clear that DSM and DR will be indispensable to loosen the control over the generation and decrease the reserve requirements, there is much debate on what is the right architecture for DSM and DR programs. In this paper we discuss current trends that are being considered as candidates for DSM and DR and critically compare them, outlining research directions that should be pursued in the future to overcome this dilemma.

Demand Side Management (DSM) and Demand-Response (DR) programs are aimed at exploiting the intrinsic elasticity of electricity demand to make it responsive to the near term cost of supplying generation. Loads that automatically respond to incentives, are referred to as “transactive”. While it is clear that DSM and DR will be indispensable to loosen the control over the generation and decrease the reserves requirements, there is much debate on what is the right architecture for DSM and DR programs. It is possible that one solution will not fit all possible loads. In this talk, we discuss a model to digitize and aggregate smart loads requests that allows to properly account for inconvenience costs, while modulating the load demand time optimally to come as close as possible to the energy dispatch. We envision that, in addition to pricing, rewarding the tolerance to service delays can be considered as additional powerful mechanism to operate the market efficiently, especially when tapping in micro-grid green generation. The solution we propose provides a natural model for Vehicles to Grid service (V2G), that can be easily extended to a large class of transactive loads.

Flexibility assessment of a combined heat-power system (CHP) with energy storage under real-time energy price market framework

In a re-structured environment, demand response (DR) programs are presented in a new style. The demand response program consists of demand-side management methods which answers to electricity price variations. With advent of electricity markets, the demand-side management programs was introduced into two categories: (1) energy efficiency program, (2) demand response program. This paper studies engagement of participants load in an electricity market having a grid with large and small loads interested to participate in the market, energy storage systems, micro-grids, and distributed generations. In the proposed scheme, it is supposed to have an aggregator which sends demand-side preferences including load curtailment, load shifting, onsite generation, and energy storage systems along with proposed value and prices and all respective system constraints to the independent system operator (ISO). In fact, load aggregators submit aggregated DR offers to the ISO in order to optimize final decisions on aggregators’ DR contributions in wholesale market. The main goal of this paper is to solve the operation problem considering demand-side, system, and pollution and reliability constraints. Compared to other methods, the results indicate that the explicit modeling of customer DR would provide ISOs with more flexible options for scheduling the available energy resources in day-ahead energy markets.

In 1991, U.S. electric utilities spent $ 1·8 billion on demand-side management (DSM) programs. However, utility DSM efforts vary enormously across the country, concentrated in only a few stales. This concentration is partly a function of regulatory reforms that remove disincentives to utility shareholders for investments in DSM programs. A key component of these reforms is recovery of the net lost revenues caused by utility DSM programs. These lost revenues occur between rate cases when a utility encourages its customers to improve energy efficiency and cut demand. The reduction in sales means that the utility has less revenue to cover its fixed costs. This article describes a new method, statistical recoupling (SR), that addresses this net-lost-revenue problem. Like other decoupling approaches, SR breaks the link between revenues and sales. Unlike other approaches, SR minimizes changes from traditional regulation. In particular, the revenue risks associated with year-to-year changes in weather and the economy remain with the utility under SR. Statistical recoupling uses statistical models that explain retail electricity sales as functions of the number of utility customers, winter and summer weather, the condition of the local economy, electricity price, and perhaps a few other key variables. These models, along with the actual values of the explanatory variables, are used to estimate "allowed" electricity sales and revenues in future years. For example, a utility might use quarterly data from 1980 through 1992 to estimate the SR models. The models would then be used to determine allowed revenues for 1993, 1994, and 1995. Five utilities provided data to use in testing this new approach. The empirical results are quite promising. The annual errors are almost all less than%. And the 3-year averages for these utilities are less than 1·%. The lack of patterns across these 3 years and five utilities suggests that statistical recoupling is a robust method.

Electric utility demand-side management (DSM) programs affect the efficiency and timing of customer electricity use. As the number and cost of these programs increase, evaluations will become increasingly important. A key challenge is the role of evaluation in determining the amount of financial incentive that a utility earns for its DSM programs. Most regulatory incen tives for DSM programs depend on the net benefits provided by these programs. The total benefit is the reductions in electricity use and demand multiplied by the appropriate avoided costs (energy or capacity). The net benefit is the difference between total benefit and program cost. Evaluations determine the total benefits of DSM programs. This article presents a hypothetical example of problems that might arise when evaluations are subject to litigation, a likely occurrence when utility earnings depend on evaluation results. A hypothetical illustration is used because such incentives are so new that they have yet to be tested in regulatory proceedings. Possible resolutions to the problems raised by the hypothetical example are discussed.

From DSM technologies to DSM programs: Issues in demand-side planning for electric utilities

Demand-side management (DSM) programs aiming to both reduce and render household consumption more flexible are becoming increasingly essential due to ongoing energy crises and the growing integration of renewable energy into energy production. The active involvement of households and energy users is crucial to fully unlock the potential of DSM programs. As this paper demonstrates, despite more than thirty years of feminist scholarly work focusing on the home as an important site of the production of gender inequality, few of these insights have been taken into account by DSM designers. Additionally, we note a broader pattern concerning gaps in knowledge regarding the diverse perspectives of energy users and their domestic contexts, all of which create obstacles to successful rollout and scalability. This paper uses the concepts of the social license to automate and intersectionality to analyze the existing literature on DSM programs. We find that three primary barriers in household DSM programs have been addressed: 1) there is an unresolved tension between DSM technology being perceived as a masculine domain and the home as a feminine domain; 2) low-income households face challenges in accessing the technology needed to enable both flexibility and savings; and 3) disparities in opportunities for youth and the elderly to participate in DSM programs are insufficiently considered. Based on these findings we argue that user diversity—not only conceived of as separate identity category variables but also as implicating overlapping and possible mutually reinforcing marginalizations– is needed to form a starting point in DSM program design for fair and scalable solutions.