An Assessment of Analytical Capabilities, Services and Tools for Demand Response

As with the planning, supply, and delivery of electricity to the U.S. economy, decisions around the use of demand response can be complex. Analytical tools and methods specific to demand response exist to help those involved with demand response, but those needs are changing as additional opportunities have opened up in wholesale and retail electricity markets for demand response resources. The working group focused on two key questions related to existing and future analytical capabilities, services and tools for demand response:

• What gaps, if any, occur in demand response capabilities, services, and tools?
• What types of tools would best be developed to support frameworks for demand response planning, program design, cost-effectiveness screening, and measurement and verification of program impacts?

As part of a "gap analysis," the working group identified analytic needs and requirements of stakeholders in the retail and wholesale DR markets and developed an inventory of analytic capabilities, services, and tools (public and proprietary) currently available to stakeholders, based on interviews with industry experts and literature reviews. The resulting report identifies gaps between stakeholder's needs (both immediate and anticipated, from evolution of the DR market) and analytical capabilities, services, and tools available for addressing those needs and finds that existing analytic capabilities and services are sufficient to effectively address many DR stakeholders' needs in most areas.

Of the 30 tools identified by the Working Group, the strongest capabilities were found in the areas of planning (e.g., system planning, market assessment and cost-effectiveness screening) and in curtailment service provider (CSP) and system operator DR operations and verification. Fewer services were available to load-serving entities (LSEs)/electric distribution companies (EDCs) for DR program implementation, grid optimization, and transaction management for price-based DR programs.

The report identifies four areas where further development of analytical tools may be appropriate to advance transfer of DR knowledge and program administrative expertise, while better addressing jurisdictional- and customer-specific needs. These four areas are: End-user settlement tools, LSE/EDC site opportunity assessment tools, LSE/EDC program implementation tools, and LSE/EDC impact assessment tools.