Maximizing value and efficiency in energy delivery

Itron's OpenWay solution enables demand response programs for residential, as well as commercial and industrial (C&I), energy consumers. OpenWay’s flexible architectural approach, combined with the adoption of open standards, provides the foundation on which utilities, independent system operators (ISOs), regional transmission organizations (RTOs) and energy service companies can optimize the efficiency of energy delivery across a diverse service territory.

Overview of Demand Response

Demand response (DR) generally refers to any action taken to reduce customer energy demand based on a financial incentive. The U.S Department of Energy formally defines demand response as:

Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.

This definition encapsulates a broad spectrum of programs which target different customer segments to achieve different results. However, DR programs are generally defined by three common characteristics:

• Incentives for participants

• Actuation methods

• Desired objectives

Incentives for Participants

Incentives are often financial, and can vary based on the targeted participants. For example, C&I customers may contract to remain below a certain demand threshold, whereas residential customers may receive rebates for actively participating in voluntary events. Other mass-market DR programs may simply utilize existing tariffs to encourage energy efficiency by signaling to energy customers when they are entering a higher energy pricing tier.

Actuation Methods

Actuation methods include any signals intended to result in a load reduction. These may be as simple as text messages to customers, indicating a temporary spike in the price of energy-which would then result in a manual load reduction by the customer. Other methods include automated signals to cycle an HVAC system through a programmable communicating thermostat (PCT), or a direct load control signal to a switch attached to a specific appliance, such as a hot water heater or pool pump.

Desired Objectives

The desired objective of a DR program or event is linked to the motivation of the party initiating DR events or signals. Some parties, such as ISOs, dispatch emergency events in response to critical generation shortfalls. Utilities enlist participation in DR programs to minimize customers‟ exposure to spikes in the wholesale price of energy, whereas energy service companies may aggregate demand resources to bid capacity into ancillary service programs. DR programs are not new-in fact, many have been in successful operation long before the advent of current smart meter or AMI deployments. However, smart meter deployments offer several features which can extend the reach and impact of DR programs:

• Two-way communications between utilities and service points

• In-home communications technology

• Network monitoring and management infrastructure

• Multiple channels of time-stamped load profile data

• Time-of-use (TOU) and critical peak pricing (CPP) registers in meters

Support for Demand Response within OpenWay

The OpenWay solution is a blend of smart meters, software and communications infrastructure that combines individual features of an AMI system to deliver business value to utilities. OpenWay delivers metering applications over multiple communications substrates using the ANSI C12.22 protocol. All OpenWay meters include a high-powered ZigBee® transceiver for reliable two-way communications with in-home devices. In the back office, the OpenWay Collection Engine software communicates with a number of industry-leading meter data management (MDM) and demand response management (DRM) systems through a publicly available service-oriented architecture (SOA) interface. By focusing the Collection Engine on reliable, scalable and secure management of network communications and data delivery, a wide variety of DR systems and devices can leverage OpenWay to deliver DR programs and benefits to various market participants.

At the solution level, OpenWay enables DR by:

• Providing two-way communications for delivering DR event messages and managing DR infrastructure

• Providing advanced metering support for DR programs

• Integrating with industry-leading DR management systems, including Tendril and Comverge

• Leveraging in-home communications for a variety of DR enabling and automating devices

Itron partners integrate with OpenWay to provide the following DR program management features:

• Program design

• Event execution

• Analytics for program effectiveness

OpenWay is designed to be a flexible and scalable communications platform for enabling DR solutions. A single OpenWay network may be used with different DRM platforms. By remaining agnostic to DR programs managed by upstream systems and focused instead on application delivery, OpenWay does not limit the deployment possibilities of DR programs or system designs. As a result, OpenWay maximizes the value of a utility's existing technology investment and ensures that future program design will not be impeded by system assumptions hard-wired into the AMI network.

Demand Response Programs

Each regulatory and grid management jurisdiction imposes different requirements on how a utility can structure DR programs. Additionally, the portfolio of possible incentives to motivate customer behavior presents a number of options to a utility program designer. OpenWay supports the breadth of possible solutions, and Itron provides ongoing leadership within standards development organizations to ensure that the list of options continues to expand.

As previously mentioned, DR programs typically carry a financial incentive to motivate participation. Incentives may take the form of either a special utility-supplied service, which requires participation in DR events, or application of a tariff which exposes the customer to fluctuations in wholesale energy prices. The most common residential DR programs are incented by the following tariffs:

• Critical peak pricing (CPP)

• Variable peak pricing (VPP)

• Time-of-use (TOU)

• Peak time rebate (PTR)

For more information, please review our white paper here.