The Current Status and Prospect of Distributed Generation in Korea
Demand Side Management (DSM) A renewed tool for sustainable development A survey of the concept, development and application.
1. Demand Side Management
(DSM)
A renewed tool for sustainable development
A survey of the concept, development and application
Hans Nilsson
Chairman of the IEA DSM-Programme
2. DSM is universal and does not only apply
to utilities, electricity or monopolies!!
“The planning and implementation of those (utility)
activities designed to influence the customer use of
electricity /energy in ways that will produce
desired changes in the (utilitiy´s) load shape - i.e.
changes in the pattern and magnitude of a
(utility´s) load.”
3. The problem is not one but several!
• LOAD LEVEL (Too much supply for a
wasteful demand)
• LOAD SHAPE (high peaks, little reserve
capacity, bottlenecks in transmission and
distribution)
• MARKET RESPONSIBILITIES (who is the
owner of the problem?)
4. Cumulative Energy Investment 2003-
2030
Sixteen (16) Trillions USD!!
Power sector absorbs 62% of global energy investment in
the period 2003-2030
0 500 1 000 1 500 2 000 2 500 3 000 3 500
OECD North America
OECD Europe
OECD Pacific
Transition economies
China
Other Asia
Middle East
Africa
Latin America
billion $ (2000)
Coal Oil Gas Electricity
Source WEO 2004
5. Difference in Electricity Investment in
the Alternative vs. Reference
Scenario 2003-2030
Additional investments on the demand side are more than offset by
lower investment on the supply side
-2 000
-1 500
-1 000
- 500
0
500
1 000
billiondollars(2000)
Difference
Additional demand-side
investment
Efficiency
measures Avoided supply-side
investment
Generation
Transmis-
sion
Distribu-
tion
Source WEO 2004
6. Energy-use in the IEA-11
Source: 30 years of energy use in IEA countries
Actual energy use
20
40
60
80
100
120
140
160
1973
1980
1985
1990
1995
1998
Exajoules
49%49%
Hypothetical energy
use without savings
1975
AUS
DEK
FIN
FRA
GER
ITA
JAP
NOR
SWE
UK
US
20%
Additional energy use with
1973 intensity = Energy
saving
7. The rise in welfare depends more on
energy efficiency improvements than
on growth in energy use!
8. Energy Efficiency has multiple
dividends
• Employment
• Industrial development
• Poverty alleviation
• Holds back prices in
supply
• Reduces pressure on
supply reserves
• Cost
• Environment/Climate
9. DSM is a tool to make large scale
energy efficiency possible
10. LARGE-SCALE ENERGY EFFICIENCY
“Mandating” Market Acceptance
Standards
Agreed
actions
Delegated
Actions Commitments
Price-
responsive
customers
“Commoditise”
for Non Price-
responsive
e.g. Voluntary
Agreements;
Technology
Procurements
e.g. Muni-
cipalities
planning
e.g. Certificates
e.g. ESCO;
Labels e.g. Taxes;
DR (elasticity)
e.g. MEPS;
Top-runner
14. PEAK
SHIFT
VALLEY
DSM can Change the LOAD
SHAPE
Adapts the load to the capacity of the system
Winter Summer Winter
Day Night Day
Before
After
15. DR and price volatilityPrice
Load
Supply
Inelastic
Demand
Price without demand
response
Demand with
Enabling programmes
Price with enabling
programmes
Load with enabling programs
16. Load Shape Technology
• Meters ……….BUT ALSO…
• Communications ………..AND
• Software for calculation, billing,
verification, settlement ………AND
• Pricing structure…………AND
• Institutional models……..AND
• End use capacity to accommodate (e.g.
Storages)
17. New paradigms – Distributed Generation
Source: Distributed Generation In Liberalised Electricity Markets. OECD/IEA 2002
Bypass congestion
Reduce losses
Enables use
Stimulates
competition
18. Strategic
growth
From this Strategic
Saving
To ThisTo This
Or toOr to
thisthis
DSM can change the LOAD
LEVEL
Adapts the system to the environmental requirements
Shift from “carbon-fat” to “carbon-lean”
systems (e.g. fuel to electricity)
19. The value chain used to be
vertical..
Retailer
Network
Regulated
monopolyGenerators
Transmission
Distribution
Supply
End-use
kWh-VALUE
20. …but with liberalisation
the value chain is fragmented
Retailer
Network
Unbundled full
competitionWholesale market
Indepen-
dent
Retailers
Broker
Generators
Transmission
Distribution
Supply
End-use
21. Source: An EPRI Initiative to Advance the Efficient and Effective Use of Energy
New Technologies
22. Business interest in DSM
Actor Peak Load Load Level Remark
Generation
company
No (prices are set on the
margin)
No (loss of sales) Windfall profit may be
regarded to be too high by
authorities
Systems
responsible
(regulator)
Yes (to avoid systems break-
down)
Possibly regional
and in special
situations (to avoid
bottlenecks and to maintain
systems to develop as planned)
Very different organisation
between countries.
Transmission
and
Distribution
Yes (to maintain systems
and avoid bottlenecks)
See above
Energy
supplier
Yes (as a business
opportunity to shift loads and
operate in pools)
Yes ? (primarily as a
marketing instrument)
Where “white certificates” and
commitments are introduced
they concern the load level
operations from these actors.
IEA DSM-
Programme
tasks
pertaining to
utilities
Task II, VIII, XI,
XIII, XV and XVII
Task I, VI, VII, XIV
and XVI
-
23. Density
in supply
Intensity in
energy use
Low -intensity
•LED
•Low -temp. heat
Medium
•CFL
•Heat Pump
High
•Incand . lamp
•El. heating
Concentrated
Fossil,
Nuclear
Decentralised
Local
e.g.Biofuel
Scatterred
•PV,
•Solar heating
OK
Hardly
justified
OK OK
Very difficultMay work
OK
May work
OK
More
flexible
A sustainable system combines energy
efficiency and renewable energy