In the News
ENERGY EFFICIENCY: Demand-Response Helped During Texas
Power DropDow Jones Clean Technology Investor
BY JONATHAN SHIEBER
March 3, 2008
While much of the blame for last Tuesday night's Texas grid problems is being thrust upon erratic wind power, the Electric Reliability Council of Texas turned to another alternative energy source -- demand-response -- to limit the impact of the power loss.
The demand-response program, known in Texas as "Loads Acting As A Resource," was able to add approximately 1,100 megawatts of power to the Texas grid within 10 minutes. By bringing that power online, no other consumers in the ERCOT region went without electricity, according to a statement from ERCOT.
"The ERCOT operator called our 24-7 operator on the hotline and said 'EECP Step 2', which means deploy all LAARs, so our operator did it. Within five minutes we could see that they were basically all coming down," said Malcolm Smith, executive vice president of the industrial group at the New York-based demand response service provider ConsumerPowerline Inc.
Formerly the chief executive officer of Texas-based XTend Energy, now a ConsumerPowerline business division, Smith said that Xtend's customers provided 60 MW of resources during the event.
The ERCOT system is a market where traders bid for customers that will act as LAARs for the state. "ERCOT pays our customers for standing by to shut down," said Smith. "They get paid for standing by just like a generator gets paid for standing by. They don't actually make more money for fitting the load."
According to ERCOT spokeswoman Dottie Roark, there are 2050 megawatts available through 136 resources that are qualified to be LAARs. Those qualified resources bid into the marketplace through energy traders like ConsumerPowerline.
ConsumerPowerline, through the Xtend Energy acquisition, is a relatively small player in the market. The largest companies, according to Smith, are energy giants like the former TXU Energy, a subsidiary of Dallas-based Energy Future Holdings Corp., and Houston-based Reliant Energy Inc.
However, a demand-response program launched in Texas in February for homes and small businesses is providing a new opportunity for growth for ConsumerPowerline, Smith said.
Called the Emergency Interruptible Load Service, this demand-response program is tailored to consumer and light industrial loads, Smith explained. ConsumerPowerline is contributing over 100 MW to the program, which is targeting more than 1,000 megawatts, but only manages 250 MW so far.