The third fact sheet in GPI’s series about demand response (DR) in the Midwest is titled Demand Response in a Resource Constrained World.

In recent years, historically low natural gas prices and new environmental regulations have heralded a period of rapid change in the Midwest’s electric system. Many baseload power plants have become less economically (and environmentally) competitive as a result and have begun the process of retiring, taking their electrical generation offline.

Fewer baseload power plants mean diminished excess electric supply and more potential issues for system reliability. As it turns out, demand response is a great resource that could potentially alleviate many of these concerns:

  • Demand response can meet capacity needs caused by electric generation retirements. MISO has identified up to 26 gigawatts (GW) of potentially retiring coal capacity. As a result, MISO is predicting a 2.3 GW generation resource shortfall by 2016. Only about 2% of the total 112 GW needed, this shortfall could be met by demand response practices.
  • DR can help mitigate reliability issues posed by retiring fossil fuel power plants. There are a number of power plants in the Midwest that have announced plans to retire but have been identified by MISO as must-run-power plants. With these plants offline, the electric system may become unstable. Demand response, in combination with other resources like distributed generation, energy efficiency, and transmission, can provide an alternative resource that will allow these plants to reture.
  • Resource planning could be improved by considering DR. Utility resource plans throughout the Midwest project energy supply and demand years into the future, but few actually consider demand response in their resource planning. There is ample room for utilities and regional transmission operators to improve their projections of DR availability, thus making it easier to plan for an energy efficient future.
  • State-by-state difference in resoure planning pose a challenge. Some states in the Midwest have a formal integrated resource planning process, but most do not. Differences in resource planning pose challenges to electric system operators. Harmonizing differences in these planning processes would improve regional resource adequacy while enabling greater efficiencies and cost savings.

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