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June 30, 2004
Berkeley Lab to Operate PIER Demand Response Research Center
for California Energy Commission
New Center Will Evaluate and Develop Technologies and Strategies to Reduce Electricity Use, Power Price Increases, Threats to the Electric Grid

BERKELEY, CA — The California Energy Commission is providing $8 million in funding over three years for a new Demand Response Research Center (DRRC) that will be managed by the U.S. Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab). It is sponsored by the Commission's Public Interest Energy Research (PIER) program.

In this hypothetical example, wholesale electricity prices rise sharply during certain hours of a critical summer day.

Demand response facilitates the quick, automatic reduction of energy use in buildings, industrial facilities, and homes in response to a rising price in the cost of power or an emergency on the electric grid. The director of the new center is Mary Ann Piette, a scientist in Berkeley Lab's Environmental Energy Technologies Division.

"Demand response refers to using technologies, programs and policies, which allow building owners and managers to reduce their electrical use rapidly," says Piette. Berkeley Lab recently tested the first automatic, multibuilding, demand-response technology using internet connectivity.

When electricity prices rise, large commercial users can implement a preplanned program of reducing certain electrical loads of their choice. For example, they can decide in advance to dim lights or turn them off in unused areas of buildings, lower hot water temperatures, reduce air conditioning use, or shut down certain assembly lines or tools in response to an automatic signal of a power price increase or a grid emergency.

Being able to respond to electricity price signals in real time can help save power-users money, reduce energy consumption, and lower energy prices by making the power market more responsive to consumer needs. However, the technology to implement demand-response programs in California and the rest of the U.S. is only beginning to be available, and much remains to be learned about the program's cost-effectiveness.

"With the opening of this research center," Piette says, "the California Energy Commission has taken another concrete step to making demand-response programs a reality in California. The Commission recognizes that demand response offers the state a powerful, rapid, market-based response to growing electrical demand." The Demand Response Research Center will initiate planning through a scoping study to be completed this fall.

"Demand response will prove to be a boon to the electricity-supply picture in California in times of distress," says Energy Commissioner Arthur Rosenfeld, a former researcher at Berkeley Lab. "When combined with conservation and energy efficiency, demand response can both lighten the burden on the electricity grid and help stabilize peak pricing when supply becomes scarce and the demand margin becomes dangerously narrow."

Demand response has been identified as an important element of the State of California's Energy Action Plan, which was developed by the California Energy Commission (CEC), the California Public Utilities Commission, and the Consumer Power and Conservation Financing Authority.

"The new research center will serve as a focal point for demand-response research in California," says Piette. "Institutions from the around the state and the country will be eligible to propose and conduct R&D with Center funding."

Piette will oversee management of the research portfolio and facilitate establishing the strategic direction of the Center with the CEC and a Partners Planning Committee. The DRRC will fund research in four areas:

Policies, programs, and tariffs

Demand response can be designed as emergency-based (applying when the grid is overloaded) or price-based. Research can develop a better understanding of how customers respond to price changes vs. emergency response, and better methods of measuring energy savings from Demand Response programs.

Utility markets, technology, and systems

This includes intelligent and integrated control systems for demand-response control, and models of how demand-response programs affect the reliability of the electric power grid. Also needed are financial engineering models.

Customer and end-use technology and systems

An example of this might be an easy-to-use computer-based system showing energy savings possible from implementing certain energy reductions at a given price of electricity.

Consumer and institutional behavior

These studies address how people interact with the energy system and how energy provides for the needs and desires of people and businesses. An example would be a study examining what incentives bring customers into a demand-response program and what will keep them over the long run.

An important feature of the new Center will be its close ties to stakeholders, including control, metering, and information system developers; electric power utilities; policy makers; building owners, engineers, and operators; and building equipment manufacturers.

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