Christian Weeks, EnerNoc - Consumers’ energy requirements

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Information about Christian Weeks, EnerNoc - Consumers’ energy requirements
News & Politics

Published on March 11, 2014

Author: informaoz

Source: slideshare.net

Description

Christian Weeks, Managing Director, EnerNOC Australia and New Zealand delivered this presentation at the 8th Annual WA Power & Gas Conference 2014.

The conference represents a timely meeting for the industry to hear about the current changes affecting the WA energy and electricity market.

For more information, visit http://www.informa.com.au/wapowerconf14

The Role of Consumers in Lowering Electricity Costs 8th WA Power & Gas Conference | 11 March 2014

2 Three Takeaways • Consumers are where the rubber hits the road – they are key to reducing system costs • Consumers want transparency, predictability, and the ability to participate in markets and respond to price signals to manage costs • WA has got many things right but needs more price signals to allow consumers to further reduce system costs

3 Energy is a major expense for large consumers Sample EnerNOC Customers Est. Annual Electricity Spend Mid-size hospital $1.8-$2.0MM Large school $300-$400k Diversified manufacturer $13-$15MM Agricultural operation $500-$600k Resources facility $15-$17MM Source: EnerNOC estimates

4 Despite declining consumption, costs continue to rise Source: EnerNOC analysis of customer bills - 0.20 0.40 0.60 0.80 1.00 1.20 2009 2010 2011 2012 2013 Historical Consumption & Spend (sample EnerNOC customer) Total Spend Consumption

5 For many consumers, costs have almost doubled Source: EnerNOC analysis of customer bills, reflects c/kWh if the customer hadn’t reduced their consumption and demand. Note: Other includes carbon, RET, ancillary services, metering, and “fees” $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 2009 2010 2011 2012 2013 Electricity Bill Components (same EnerNOC customer, totals in c/kWh) Other (MWh) Network (kVA) Capacity (kW) Energy (MWh) 11.1 13.4 13.7 18.7 19.5

6 Energy management is complex and fragmented Director of Financial Planning Procurement Manager General Manager, Operations Global Energy Manager Director of Sustainability General Manager, Supply Chain Director of Facilities Manufacturing Engineer Lots of Stakeholders… trying to make sense of this (various electricity bills)

7 Energy management is becoming more strategic Energy Intelligence Software can turn these bills… into actionable ways to reduce cost

8 “We’re seeing an unprecedented inflection point in enterprise-class customers investing holistically to manage energy as a source of economic advantage.” - Paul Baier, Groom Energy, VP of Research

9 Customers are looking for three things Transparency • What are the components of my bill? • How are they calculated? Predictability • What will my costs be in the future? Ability to Respond to Price Signals • How can I control my spend?

10 The key to lower costs is enabling consumers to participate in markets and respond to price signals Transparency • What are the components of my bill? • How are they calculated? Predictability • What will my costs be in the future? Ability to Respond to Price Signals • How can I control my spend?

11 WA has got many things right but needs more price signals to lower system costs Transparency • Good for energy and capacity • Getting better for networks Predictability • Good for energy and capacity • Harder for networks Ability to Respond to Price Signals • Good for energy and capacity • Poor price signals for networks

12 Meeting WA’s reserve capacity requirement Source: System Management trading interval load forecasts for year to 30 Sep 2013, from IMO, and EnerNOC analysis. 0 1000 2000 3000 4000 0 1000 2000 3000 4000 5000 6000 7000 8000 MW Hours Reserve Capacity Requirement

13 Meeting WA’s reserve capacity requirement Source: System Management trading interval load forecasts for year to 30 Sep 2013, from IMO, and EnerNOC analysis. Baseload Mid-merit Peaking 0 1000 2000 3000 4000 0 1000 2000 3000 4000 5000 6000 7000 8000 MW Hours Reserve Capacity Requirement

14 DSM DSM provides reserves more efficiently than generation Source: System Management trading interval load forecasts for year to 30 Sep 2013, from IMO, and EnerNOC analysis. Baseload Mid-merit Peaking 0 1000 2000 3000 4000 0 1000 2000 3000 4000 5000 6000 7000 8000 MW Hours Reserve Capacity Requirement

15 In a properly working capacity market, DSM participation lowers costs for all consumers • Competes with conventional peaking generation to meet reserve requirements • Options without DSM: build more peakers or increase the risk of blackouts • Both are good for peakers but bad for consumers $11.8 billion saved 2013/14 PJM BRA: Impact of DSM PJM Market Monitor. Analysis of the 2013/2014 RPM Base Residual Auction Revised and Updated, September 2010, p.52

16 We have excess capacity for two reasons • Overbuilding of generation pre-GFC • Flaws in the original design of the capacity market  Excessive transmission cost estimates – fixed  Demand forecasts that never materialized – refined  Strong investment signal despite excess – fix in process Capacity market flaws have or are scheduled to be fixed by June

17 Customers can also help reduce network costs • Retain capacity DSM to capture “spillover” network benefits • Implement network tariffs to incent peak management during coincident peaks for all users on interval meters • Implement network DSM to avoid or defer CapEx WA has a large base of consumers with DSM experience who can help lower network costs

18 Consumers have a critical role to play in lowering costs • Hundreds of WA businesses are already part of the solution • Capacity-based DSM is a best practice globally and has many ancillary benefits that drive down system costs • Enabling consumers to respond to price signals is key to lowering system costs

Christian Weeks Managing Director Australia & New Zealand +61 3 8643 5910 cweeks@enernoc.com

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