Competition Helps Electricity Grid Weather Summer Heat Wave

Competition is helping the nation’s organized markets weather this summer’s peak electricity demands as heat waves gripped much of the country. Both private investment and innovative demand response technology, two of the most distinct benefits of competitive markets supported by the transparent price signals markets provide, have kept the lights on in spite new power-demand records.
 
Several of the largest organized markets forecasted demand response programs would enable them to meet peak demand, and their predictions have held true. In the PJM Interconnection, over 2,500 megawatts of energy reductions were employed across thousands of sites during the hottest day of July’s heat wave. This represented the largest demand response action in three years and was equivalent to the generation capacity of more than two nuclear power plants. PJM’s 2010 Reliability Pricing Model (RPM) auction attracted 9,282 MW of demand response, 32 percent more than the 2009 RPM auction and more than 33,000 MW of capacity resources since 2007.
 
New York state set a record in July for monthly electricity demand, at 17,312 gigawatt hours (GWh), 300 GWh above the previous record, but the New York ISO (NYISO) maintained reliability. On July 6th, the state came within 500 megawatts (MW) of its all-time energy demand peak, but employed 450 MW of demand response technology to mitigate the surge. “Thanks to the significant private investment of resources in our system over the past 10 years and the innovative, market-driven demand response programs now in place, our system was well prepared,” said Stephen Whitley, NYISO President and CEO.
 
In ISO New England (ISO-NE), demand response prevented potential blackouts and power price spikes when two power plants failed in late June. COMPETE member EnerNOC, whom ISO-NE has contracted to provide demand response technology, quickly reduced demand by 380 MW across 1,000 customers for two-and-one-half hours.
 
National energy demand is expected to rise in coming years as a result of economic growth and technological advancements. But as this summer’s results show, demand response technologies – and the competitive organized markets that encourage them – can reduce consumer energy demand and the need for new generation.

Joel Malina | August 6, 2010