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Demand side management for the 21st century

  1. Demand Side Management for the 21st century Hans Nilsson FourFact AB eceee IEA DSM-Programme 1
  2. DSM is changing shape • An (electric) utility issue 2 •DSM used to be •DSM expands into • A societal issue (about sustainability) • Focus energy services in full • Take into account Cost-Value-Risk • Implications for health e.g. air quality Example "Energy Conservation and Demand Management Program Goals of Conservation in Ontario: ….a variety of goals such as environmental, financial, health and resilience …. in an efficient and cost effective manner
  3. Source: An EPRI Initiative to Advance the Efficient and Effective Use of Energy New Technologies will change business 3 1. More ICT 2. New applications 3. New (smaller) generation units
  4. Cheapest resource 4
  5. Does price drive the change? 8 16 2 3 Source: IEA WEO 2015
  6. But still the logic does not appeal
  7. What is/was DSM? • The planning and implementation of activities designed to influence the customer’s use of energy in ways that will produce desired changes in the load • DSM relates to the entire range of management functions (planning, evaluation, implementation and monitoring) 7 =
  8. What the past tells us as for the future • DSM= Large-Scale Deployment of Energy Efficient Equipment by use of specially designed programmes 8
  9. 1. The logic of DSM
  10. What is on the customer´s mind? -
  11. Where we are heading Coming up? Required! PROFITABLE! Overall logic (WEO 2012) +
  12. Energy efficiency has a superior logic Efficiency is the FIRST fuel Efficiency is an invisible powerhouse Efficiency is a hidden jewel Efficiency has multiple benefits Efficiency is the one resource all possess in abundance abundance, +
  13. The logic of industrial revolutions 13 ?
  14. The logic of DSM needs a wider application • Technology provides expanding possibilities • Institutional and political awareness allows DSM to be an active tool for efficient use of resources (circular and sharing economy). • Behavioural issues get a more pronounced role. • Sufficiency? 14
  15. 2. Governance 15
  16. Governance in several ways to transform the market 16 Product Performance Market Penetration Base case Preferred Case Technology Procurement (BAT+) Labels White Cert./ EEO (BAT) Standards & Directives (WAT) +
  17. Multiple Benefits (Non Energy Benefits) Sources: http://www.iea.org/publications/insights/ee_improvements.pdf http://www.iea.org/Textbase/npsum/MultipleBenefits2014SUM.pdf + + + +
  18. 18 Governanceoutofthebox Source: ENERGY-EFFICIENT TECHNOLOGIES AND CLIMATE CHANGE POLICIES: ISSUES AND EVIDENCE Jaffe et al. + Governanceoutofthebox
  19. Governence taking real people into account Two systems of thinking (FAST, automatic) (SLOW, deliberative ) Behaviour Economic outcomes and shared mental models Beliefs and habits 1. Consistency4. Asymmetry 2. Agency 3. Public domain World Development Report 2015: Mind, Society, and Behavior (Adapatation): http://www.worldbank.org/en/publication/wdr2015 +
  20. 20 Governance requires more attention to real people
  21. 3. Load level 21
  22. Strategic growth From this Strategic Saving To This Or to this DSM can change the LOAD LEVEL Adapts the system to the environmental requirements From “carbon-fat” to carbon-lean ? ! =
  23. DSM Policy for load level Assessment of the least-cost delivery of energy services that includes both the demand and supply side. (IDSM) DELIVERS MOTIVES FOR: • Energy service companies (and performance contracting) • Allocation of commitments and obligations that mobilises the appropriate set of actors • Support programmes/Policies for energy efficient products • Allocation of obligations for reduction of GHG-emissions between sectors and countries • Improved use of market communication mechanisms, e.g. standards and labels • Input to how further research and support mechanisms should be distributed among actors. 23
  24. Smart - but not that smart 24 -
  25. 25 Load level changes is still the main focus
  26. 4. Load shape 26
  27. DSM can Change the LOAD SHAPE Adapts the load to the capacity of the system Day Night Day Before After € (but) =
  28. DSM Policy for load shape will deliver • Less Price Volatility by improving short term price elasticity • System Reliability by reducing peaks and adding to safety margins • System Security by reducing dependency on vulnerable supply resources • Restoration Capacity by dispatching in/after emergency situations • Less costly network reinforcements since energy efficiency measures will be active alternatives • Opportunities for Distributed generation as alternative to transmission lines. • Improved operation and use of flowing renewable sources • Elastic response as complement to competition 28
  29. The technologies change the markets Demand 2 1 2
  30. 30 Load shape changes gets more strategic
  31. 5. Integration 31
  32. 32 Source: IEA ETP +
  33. Towards a robust Sustainability in two steps Supply High Density (e.g. fossil, nuclear) Low Density (e.g. solar, wind, bio) End-UseofEnergy High Efficiency (Low Intensity) e.g. CFL and LED lighting; Adjustable speed drives UNECONOMICAL SUSTAINABLE Low Efficiency (High Intensity) e.g. Incandescent lamps, Direct electrical heating PRESENT SYSTEM HARDLY FEASIBLE High density, (Low availability) Low density, (High availability) 1 2 +
  34. 34 Integration takes a holistic view
  35. 35 6. Business models
  36. 36 SERVICE RULES! PRODUCT? + WE: THEY: !
  37. Efficiency has several VALUES (eg. sewage pumping station) +
  38. 38 DSM is about SERVICE and VALUE
  39. Is sustainable growth possible… 39 ..without DSM and without global co- operation?
  40. Deployment is key and must move beyond the rhetoric!
  41. Thank you ! !?!
  42. -10 0 10 20 30 40 Period Marketuptake Higher saturation Faster Acceptance Earlier introduction Values of technology deployment +
  43. IEA WEO 2012 (six steps to energy efficiency) • Visible (The energy performance of each energy end-use and service needs to be made visible to the market.) • Priority (The profile and importance of energy efficiency needs to be raised.) • Affordability (Create and support business models, financing vehicles and incentives to ensure investors in energy efficiency reap an appropriate share of the rewards) • Normal (Energy efficiency needs to be normalised if it is to endure. Resulting benefits from learning and economies of scale help make the most energy-efficient option the normal solution.) • Real (Monitoring, verification and enforcement activities are needed to verify claimed energy efficiency) • Realisable (Achieving the supply and widespread adoption of energy efficient goods and services depends on an adequate body of skilled practitioners in government and industry.) +
  44. Demand Response (DR, flexibility) and price impact 44 Price Load Supply Inelastic Demand Price without demand response Demand with Enabling programmes Price with enabling programmes Load with enabling programs = Elastic demand 1 2
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