ConEd awards 22 MW of demand response contracts in Brooklyn-Queens project

Dive Brief:

Consolidated Edison held its first auction for demand response capacity under its Brooklyn-Queens Neighborhood Program, which seeks to cut customer usage to defer a substation investment in New York.
The utility said it awarded contracts that would result in 22 MW of peak demand reductions in 2018, with payments to providers ranging from $215/kW/year to $988/kW/year.
Storage provider Stem was among the 10 auction winners, Bloomberg reports, and expects to install up to 857 kW of battery storage in the city by 2018.

Dive Insight:

Previously known as the Brooklyn Queens Demand Management (BQDM) project, the Neighborhood Program is among the most well-known of utility non-wire alternative projects. It is also one of Con Ed's demonstration projects under New York's Reforming the Energy Vision initiative.

Through a combination of 52 MW of demand reductions and 17 MW of distributed resource investments, ConEd planned to defer the need for a $1.2 billion substation upgrade

First proposed in 2014 , ConEd began deploying demand management resources last year. In the first quarter of 2016, it announced it had contracted for 10.68 MW of cumulative reductions during peak hours.

The new demand response capacity auction aims to build on those results, seeking more than double the peak hour reductions.

ConEd accepted offers for 22 MW of peak hour DR from 10 providers. Payments ranged from $215/kW/year to $988/kW/year, depending on the amount of power reduction and the demand management technology used.

The 22 MW is the sum of reductions from two daily periods — 4 p.m. to 8 p.m. and 8 p.m. to midnight.

"The DR providers/aggregators bid on four products," ConEd spokesperson Allan Drury wrote in an email.
"They bid amounts that they wanted to get paid for reducing load between 4 p.m. and 8 p.m. by summer 2017; between 8 p.m. and midnight by summer 2017; between 4 p.m. and 8 p.m. by summer 2018; and between 8 p.m. and midnight by summer 2018."

About 75% of the reductions are slated for the later period, Drury said.

Along with Stem, winners included EnerNOC Inc., Innoventive Power, Direct Energy, Power Efficiency, Demand Energy Networks, Energy Spectrum and Tarsier, Bloomberg noted. It now falls to those companies to sign up ConEd customers willing to reduce their usage during peak hours or deploy distributed technologies like solar or storage to cut their consumption.

A number of utilities have turned to Stem and its large-scale, behind-the-meter batteries for demand management and grid support in recent years.

In 2014, it contracted for 85 MW of storage with Southern California Edison. Last year, it bid aggregated storage into the California real-time electricity markets, and this summer signed on to provide batteries and software management systems to 250 Hawaiian public schools.

"'Behind-the-meter’ is not even an accurate characterization," Stem Policy Director Ted Ko recently told Utility Dive. "Aggregated smaller-scale storage can provide the same services that utility-scale storage can provide.”