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ISO New England Demand Resource Measurement & Verification Standards Manual Overview April 11, 2007 NAESB Development of DSM/EE Business Practices Washington,

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Presentation on theme: "ISO New England Demand Resource Measurement & Verification Standards Manual Overview April 11, 2007 NAESB Development of DSM/EE Business Practices Washington,"— Presentation transcript:

1 ISO New England Demand Resource Measurement & Verification Standards Manual Overview
April 11, 2007 NAESB Development of DSM/EE Business Practices Washington, DC Henry Yoshimura ISO New England

2 Discussion Topics What is the Forward Capacity Market (FCM) and how does it work? Can Demand Resources participate in the FCM? What are ISO New England’s Measurement and Verification requirements for Demand Resources participating in the FCM? © 2006 ISO New England Inc.

3 Forward Capacity Market Background
The Forward Capacity Market (FCM) will be used to procure capacity to meet New England’s forecasted demand and reserve requirements three years into the future. The design of the FCM resulted from a Settlement Agreement signed on March 6, 2006. The Settlement Agreement was approved by the FERC on June 16, 2006. Detailed FCM Rules were filed with the FERC on February 15, 2007. Generation and Demand Resources may participate in the FCM. © 2006 ISO New England Inc.

4 Demand Resources in the FCM
Stakeholders recognized that the Installed Capacity Requirement can be met by increasing supply or reducing demand. An extensive stakeholder process was used to develop the rules for Demand Resource participation in the FCM and to develop Measurement and Verification requirements. Demand Resources are installed measures (i.e., products, equipment, systems, services, practices and/or strategies) that result in additional and verifiable reductions in end-use demand on the electricity network in the New England Control Area. Such measures include Energy Efficiency, Load Management, and Distributed Generation. © 2006 ISO New England Inc.

5 Forward Capacity Auction Objectives
The FCM uses a competitive Forward Capacity Auction (FCA) process to determine which resources to buy, how much to buy, and how much to pay. The FCA select a portfolio of Generation and Demand Resources to meet Installed Capacity Requirements. All resources that clear the auction are paid the market-clearing price ($/kW-month), subject to performance incentives and penalties. To encourage investment, new resources can receive a long-term commitment (up to 5 years). © 2006 ISO New England Inc.

6 Demand Resource Performance
Different technologies – i.e., Energy Efficiency, Load Management, and Distributed Generation – reduce load in different ways. Passive versus active (i.e., dispatchable) Weather sensitivity Demand reduction versus energy output The FCM rules were developed to recognize the: Differences among Demand Resource types, and The needs of the system in meeting Installed Capacity Requirements. Each Demand Resource type must reduce load so as to reduce the need for generation capacity. Each of five Demand Resource types has a specific set of performance hours across which load reductions would be measured and verified. © 2006 ISO New England Inc.

7 Qualification Package
To qualify for the Forward Capacity Auction, the resource must demonstrate that it is viable. Demand Resources must submit a Qualification Package including: Project Description Minimum Project Size = 100 kW Must be located in a single Load Zone Source of Funding Customer Acquisition Plan and Critical Path Schedule Capacity Commitment Period Election Maximum 5 Years for New Capacity Measurement & Verification Plan © 2006 ISO New England Inc.

8 Measurement & Verification Plan
Measurement & Verification Plan describes the methods, assumptions and measurements that will be used to determine actual demand reductions during the Commitment Period. Measurement & Verification Plan must comply with the requirements in ISO New England’s Manual for Measurement and Verification of Demand Reduction Value from Demand Resources (M-MVDR). The NEPOOL Markets Committee approved M-MVDR on February 22, 2007; the NEPOOL Participants Committee is scheduled to vote on M-MVDR on April 13, 2007. © 2006 ISO New England Inc.

9 M&V Standards Manual - Overview
The M&V Standards Manual consists of the following sections: Project Description Requirements M&V Methodologies Statistical Methods Measurement of Demand Resource Project Savings Data Collection, Validation and Management Reporting, Independence, Supplemental Information, Project Organization Real-Time Demand Response and Real-Time Emergency Generation Calculation methodology for demand response is the same as that described in the present Load Response Program. © 2006 ISO New England Inc.

10 Demand Reduction Value Calculation Methodology
Description: The Project Sponsor must describe in their M&V Plan how the Demand Reduction Value during performance hours will be calculated, including calculations for the Baseline and post-installation electricity consumption. Requirements: Demand Reduction Value calculations must achieve at least a 10% relative precision and an 80% confidence interval. Include aggregate electrical energy reduction (MWh) during performance hours on a Load Zone basis. Identify the Baseline(s) used in the calculation, and make adjustments to reflect operating conditions during performance hours. Include formulas for calculating the Demand Reduction Value. © 2006 ISO New England Inc.

11 Option A: Spot or Short-Term Measurement with Stipulated Values
Description: The approach is intended for DR projects where either performance or operational factors can be measured on a spot or short-term basis during pre- and post-installation periods. Demand Reduction Value is stipulated based on engineering assumptions, analysis of historical data, or manufacturer's data. Requirements: Stipulated factor must not be subject to fluctuation over the performance hours or Measure Life of the Demand Resource. Requires baseline measurement calculations. Project Sponsor must demonstrate a correlation between the metered proxy variables and energy consumption (MWh) during performance hours. Example: Measuring HVAC system temperatures and flow rates to calculate MWh consumption using manufacturer’s equipment data. © 2006 ISO New England Inc.

12 Option B: End-Use or System Interval Metering
Description: Demand Reduction Value is measured at the component or system level using interval meters installed on the affected end-use. Requirements: The Project Sponsor must measure factors continuously during the performance period and Measure Life of the resource. Requires baseline measurement calculations. Consideration must be given to the possibility of interactive effects that may significantly alter loads on other end-use equipment. Examples: Measuring the MWh output of a Distributed Generator during performance hours. Measuring the MWh consumption of a large electric motor. © 2006 ISO New England Inc.

13 Option C: Whole Facility Metering and Analysis
Description: Demand Reduction Value is determined by studying overall energy use in a facility and identifying the impact of the implemented measure on total building or facility energy use patterns. Requirements: Interval metering of facility MWh consumption during performance hours. Requires baseline measurement calculations . Approach may not be appropriate if the Demand Reduction Value is expected to be small relative to the total facility load, due to the small “signal-to-noise” ratio. Example: Residential weatherization measures reducing air-conditioning load. © 2006 ISO New England Inc.

14 Option D: Calibrated Simulation
Description: Demand Reduction Value is determined using calibrated computer simulation models of either a system or whole building energy consumption to determine measure energy savings. Engineering simulation models (such as DOE-2) can model both residential buildings (homes, apartments and condominiums) as well as more complex commercial buildings. Requirements: Simulation models must be calibrated to actual kW and kWh data from the site or process being examined. Requires baseline measurement calculations or simulation. Example: Installation of high efficiency HVAC and control systems in new construction project. © 2006 ISO New England Inc.

15 Baseline Conditions Description: Requirements:
A DR Project’s Baseline is an estimate of the amount of electricity that would have been consumed during performance hours had the DR Project not been implemented, all other conditions remaining the same. Requirements: The Baseline methodology will be dependent on the proposed DR Project and Demand Resource type. The Baseline must be based on measurement, or applicable codes or standards. Baseline must be reflective of operating fluctuations as it relates to the use of the equipment or practice over performance hours and may include such things as production, occupancy, weather dependant variables, equipment related variables (load and efficiency). © 2006 ISO New England Inc.

16 Measurement, Verification, Reporting of Savings
Direct Measurement Indirect Measurement Statistical Sampling Auditing Testing Independent Verification Validation Data Retention Reporting © 2006 ISO New England Inc.

17 Direct Measurement Description: Requirements:
Measurement of electrical demand (kW) that are used in the calculation of equipment or facility electrical consumption. Requirements: The measurement of demand (kW) must use a true RMS measurement device with an accuracy of at least 2%. Demand measurements for three-phase devices should be conducted on all phases in order to account for any phase imbalance. Data recorders shall be synchronized in time with an accuracy of +/- 2 minutes per month. Distributed Generation must provide real-time metering for determination of Monthly Demand Reduction Value. © 2006 ISO New England Inc.

18 Indirect Measurement Description:
Measurement of volts, amperes, temperature, flow rates or other variables that are used in the calculation of equipment or facility electrical consumption. Requirements: If alternative methods of measuring demand are proposed (i.e. proxy variables, voltage, current, etc.) the calculated demand (kW) values from the monitoring data should achieve an accuracy of 2% on the calculated demand (kW). If the proposed methods rely on the measured current (amps) and the nominal voltage, the power factor of the end-uses must be included in the demand (kW) calculations. Instruments or transducers for the analog or digital measurement shall conform to appropriate ANSI standards or equivalent. © 2006 ISO New England Inc.

19 Monitoring Interval and Period
Description: The Project Sponsor shall, describe in their M&V Plan the monitoring frequency and duration for each monitoring parameter and variable. Requirements: The duration and frequency of metering and monitoring must be sufficient to ensure an accurate representation of the amount of energy used by the affected equipment both before and after project installation and during performance hours depending on the Demand Resource type. The measurements must be taken at typical system outputs within the time periods and frequency that shall demonstrate coincidence with performance hours depending on the Demand Resource type. © 2006 ISO New England Inc.

20 Statistical Sampling Description: Requirements:
The Demand Reduction Value from multiple installations of similar Demand Resources may be developed by sampling from the total population. Requirements: Specify the population to be sampled, Samples must be sized and selected to achieve 80% Confidence ± 10% Precision, (t = 1.282) Describe the planned sample size, plus contingencies for attrition due to metering equipment failure and the like, Show all calculations for determining the sample size, Describe the method for selecting sample points, and Describe the method for monitored the accuracy and precision of the sample over the Measure Life. © 2006 ISO New England Inc.

21 Evaluating the Sample Precision
Description: During the first year of a DR project, a default value for the coefficient of variation (c.v.) may be used. However, after performance data has been collected, the Project Sponsor can estimate the c.v. of the population based on the data from a sample. Requirements: The precision of sampling studies shall be calculated based on the new estimated sample c.v. calculated from the sample mean and standard deviation. Minimum precision of 10% shall be met and sample numbers shall be adjusted to correct for lower precision from using the default c.v. © 2006 ISO New England Inc.

22 Auditing Description: Requirements:
Project Sponsors will have the right, pursuant to the Market Rules, to conduct an audit to demonstrate their Demand Resource’s capability. The ISO reserves the right to conduct unannounced audits or tests of a Demand Resource to verify its compliance with the technical requirements as set forth in the Manual. Requirements: Audit must be conducted for a period of no less than two (2) consecutive hours. Audits must be conducted under operating conditions that the Project Sponsor would reasonably expect during performance hours. The Project Sponsor must provide evidence that the audit was conducted under such operating conditions. © 2006 ISO New England Inc.

23 Testing Description: Requirements:
The ISO has the right to audit testing and calibration records, and to order and witness the testing of metering and measurement equipment installed pursuant to the Demand Resource’s approved M&V Plan. Requirements: The Project Sponsor shall describe in their M&V Plan the equipment that will be used to measure the monitoring parameters and variables, including manufacturer’s specifications and equipment calibration and testing plans. The Project Sponsor will be responsible for the expenses of the meter testing. © 2006 ISO New England Inc.

24 Independence Description: Requirements:
The M&V implementation shall not be biased by any financial interest in the results or efforts resulting from the implementation of evaluation recommendations. Requirements: The Project Sponsor shall demonstrate independence of the entity implementing the pre- and post-installation inspections of Demand Resource measures, such that the evaluation is independent of the Project Sponsors design, management and implementation. © 2006 ISO New England Inc.

25 Data Validation Description: Requirements:
Data validation checks are designed to identify problems with data collected from a measurement device and/or data recorder prior to submitting the data to ISO New England. Requirements: Project Sponsors must perform, at a minimum, the following Data Validation checks: Time Check of the Meter and/or Date Recorder Pulse Overflow Test Sum Check Spike Check High/Low Usage Check Meter Identification Check If data fails validation and/or is missing the Project Sponsor may substitute estimated data. The Project Sponsor must record the estimation algorithm used for each data element that is estimated. © 2006 ISO New England Inc.

26 Data Retention Description:
For Projects involving facilities producing ≥ 10 kW of Demand Reduction Value, the Project Sponsor shall maintain records of each facility served including, at a minimum, The retail customer’s address, The retail customer’s utility distribution company, The utility distribution company account identifier, Description of all measures installed, and Monthly Demand Reduction Values. For Projects involving facilities producing < 10 kW of Demand Reduction Value, the Project Sponsor has the option of maintaining records of aggregated Demand Reduction Value and measures installed by Load Zone and meter domain. All Project Sponsors must maintain data until the end of the Measure Life, or until the Demand Resource is permanently De-Listed or retired from the Forward Capacity Market. © 2006 ISO New England Inc.

27 Project Reporting Description: Requirements:
The Project Sponsor shall describe in their M&V Plan how they will prepare the reports required to comply with ISO New England’s monthly data reporting requirements. Requirements: Monthly reporting shall consist of documents describing: Overall project status. Certification of measurement verification and compliance with statistical significance. Deviations from the M&V Plan and actions taken to correct deviations. Adjustments to Demand Reduction Value calculations (baseline, decommissioning, delisting). All data as described in the M&V Plan including raw and processed data. © 2006 ISO New England Inc.

28 Questions and Discussion
© 2006 ISO New England Inc.

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