California’s legislative and regulatory goals for renewable energy are changing the power grid’s dynamics. Increased variable generation resource penetration connected to the bulk power system, as well as, distributed energy resources (DERs) connected to the distribution system affect the grid’s reliable operation over many different time scales (e.g., days to hours to minutes to seconds). As the state continues this transition, it will require careful planning to ensure resources with the right characteristics are available to meet changing grid management needs.
Demand response (DR) has the potential to provide important resources for keeping the electricity grid stable and efficient, to defer upgrades to generation, transmission and distribution systems, and to deliver customer economic benefits. This study estimates the potential size and cost of future DR resources for California’s three investor-owned utilities (IOUs): Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E).
Our goal is to provide data-driven insights as the California Public Utilities Commission (CPUC) evaluates how to enhance DR’s role in meeting California’s resource planning needs and operational requirements. We address two fundamental questions:
- What cost-competitive DR service types will meet California’s future grid needs as it moves towards clean energy and advanced infrastructure?
- What is the size and cost of the expected resource base for the DR service types?
Demand response operates across a range of timescales from transient responses in seconds to long-run shifts in daily behavior, and the value created by DR depends on the timescale of the response. This dynamic necessitated a new framework for potential study analysis, and we developed a supply curve modeling framework to express the availability of system-level grid services from distributed resources, based on large samples of Smart Meter Load Shapes. To facilitate comparisons between the cost and value created from having a diverse set of flexible loads, we created a new DR services taxonomy and an analytic framework that groups these services into four core categories: Shape, Shift, Shed and Shimmy.
- Shape captures DR that reshapes customer load profiles through price response or on behavioral campaigns—"load-modifying DR"—with advance notice of months to days. Energy Technologies Area 2025 California Demand Response Potential Study 03/01/17 Final Report on Phase 2 Results 1-2
- Shift represents DR that encourages the movement of energy consumption from times of high demand to times of day when there is a surplus of renewable generation. Shift could smooth net load ramps associated with daily patterns of solar energy generation.
- Shed describes loads that can be curtailed to provide peak capacity and support the system in emergency or contingency events—at the statewide level, in local areas of high load, and on the distribution system, with a range in dispatch advance notice times.
- Shimmy involves using loads to dynamically adjust demand on the system to alleviate short-run ramps and disturbances at timescales ranging from seconds up to an hour.
