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Changing Trends in Peak Demand

Written by Sabrina Pedersen and Patrick Roche.

Each year, there’s a single hour – usually in the summer – in which the electric grid experiences its highest – or peak – demand. In order to ensure that there is enough electric “capacity” available on the grid to meet demand in future years, the grid operator ISO-New England (ISO-NE) has a program that pays energy generators if they meet future generation commitments. To make these payments, ISO-NE assesses its customers a capacity charge, which is incorporated into electricity supply rates. ISO-NE determines the amount of capacity charge a municipal facility must pay solely on the basis of its demand during that peak demand hour. Given the right forethought, this provides municipalities the opportunity to save big by “load-shedding,” or reducing consumption, during the expected annual peak hour.

Since 2015, MAPC has helped municipalities save hundreds of thousands of dollars from their largest facilities through peak demand management, running a notification email program to help municipalities anticipate days in which the annual peak could occur.

Learn more about peak demand, and MAPC’s notification program, here.

Changing Trends in Peak Demand

Demand response (DR) and off-grid solar photovoltaics (PV) are gaining momentum in shaping the future of the grid. Both the growing capacity for behind-the-meter PV and demand response (i.e. load shedding programs) have contributed to changes in the amount of peak demand and the timing of the peak during the day. The following provides a brief historical synopsis of peak demand to help you better understand these trends that help to predict the annual peak day. We also discuss how these impact MAPC’s development of risk thresholds.

How the Growth of Photovoltaics and Demand Response is Decreasing Demand

The demand on the grid tracked by ISO-New England measures only what is “in front” of the meter. It is a net amount, having been reduced from gross demand by behind-the-meter solar PV and DR actions. ISO-NE estimates the amount of behind-the-meter PV solar and demand response, so that it can have an understanding of the gross demand on the grid. ISO-NE might have to meet this gross level of demand if weather, mechanical, or behavioral issues caused problems with PV or DR. Gross demand is known as “non-adjusted” and net is known as “adjusted”, after ISO-NE subtracts its estimates.

Figures I and II below compare adjusted and non-adjusted forecasts. Figure I assumes an average temperature summer (50/50), whereas Figure II assumes an extremely cool summer (90/10) which would have much lower peak demand. Looking at Figure I, the non-adjusted forecast increased by roughly 2 percent from 2015 to 2018. Despite that growth, the adjusted forecast decreased 3 percent over that same time. Figure II shows a similar result. Both reveal that that accelerating growth of behind-the-meter PV and DR is more than offsetting peak demand growth. This is a major accomplishment and your participation in MAPC’s Peak Demand program is certainly part of the success. As it stands, behind-the-meter PV and DR account for 11 percent of gross demand. As behind-the-meter solar PV and DR grows, we should expect to see forecasts with even lower demand forecasts in the future.

Figure I. 50/50 forecast refers to a normal weather report.

Figure II. 90/10 forecast refers to a mild (cooler summer) weather report.

How PV and DR are Changing the Peak Time, but Not Day

ISO – New England provides public, historical data that describes the peak dates, hours, and loads from 2001 to 2017 (Table I). A majority of the annual peak days occur in the months of July and August when temperatures typically reach their highest. Since 2001 June has surprised us with a peak day two times – once last year, on June 13. MAPC strategically begins our notification program by June 1 to prepare municipalities for these early, unexpected peak days.

Examining the weekdays more closely, the peak date tends to happen more frequently on Tuesdays, Wednesdays, and Fridays; each of these weekdays has a past record of five annual peak days since 2001. There is no specific day of the week that outperforms them all. It is good practice to expect any day of the work week to be this year’s annual peak day.

Recently, the peak hour has occurred on hot afternoons. For over a decade, from 2001 to 2011, the hour was almost always 2 p.m. to 3 p.m.; 2004 was the only year that did not occur at that time. Then from 2012 until the present, the hour from 4 p.m. to 5 p.m. has become the dominant time, occurring four out of six years.

Why shift the peak hour? During the early afternoon, PV should produce more energy than later. This could mean that non-adjusted demand is still highest at 2 p.m., but that we have enough behind-the-meter PV that adjusted demand does not peak until later when PV production starts to fall off. If this is the case, we may need to prepare for a more hourly fluctuation of the peak. If unexpected cloud-cover should occur, perhaps due to a large thunderstorm, it could dramatically reduce PV output in early afternoon, causing a spike in adjusted demand.

Finally, Table I shows that in the past three years, the actual reported annual peak has experienced both increases and decreases. This erratic nature contrasts with the steady reduction shown in the forecasts of adjusted demand in Figures I and II above. The reason is that the specific weather experienced each year determines whether the annual peak is closer to the 50/50 scenario, the 90/10 cool or even the 90/10 hot.

Table I. Reported Annual System Peak Day, Hour, and Load

Peak Date Peak Hour Reported System Peak Load
Date Week

Day

Hour Begin Hour End MW
8/09/2001 Thurs 2:00 3:00 24,723
8/14/2002 Wed 2:00 3:00 25,103
8/22/2003 Fri 2:00 3:00 24,310
8/30/2004 Mon 3:00 4:00 23,718
7/27/2005 Wed 2:00 3:00 26,617
8/02/2006 Wed 2:00 3:00 28,038
8/03/2007 Fri 2:00 3:00 25,773
6/10/2008 Tues 2:00 3:00 25,691
8/18/2009 Tues 2:00 3:00 24,707
7/06/2010 Tues 2:00 3:00 26,701
7/22/2011 Fri 2:00 3:00 27,312
7/17/2012 Tues 4:00 5:00 25,543
7/19/2013 Fri 4:00 5:00 26,910
7/02/2014 Wed 2:00 3:00 24,067
7/29/2015 Wed 4:00 5:00 24,052
8/12/2016 Fri 2:00 3:00 25,111
6/13/2017 Tues 4:00 5:00 23,507
Source: ISO-NE Annual System, Peak, Day, Hour & Load report

Predicted Forecast Data vs. Actual Data

ISO – New England also provides public access to their Forecast Report of Capacity, Energy, Loads, and Transmission (CELT). In general, this report shares 10-year projections that are used in power system planning and reliability studies. By analyzing the accuracy of past forecast data, MAPC is able to adjust forecast data for the current year to set our ‘Likely’ thresholds for the peak electricity demand notification program. As shown in Table II, the actual demand tends to be much closer to the “90/10” forecast, which is for the cooler-than-average summer, than the 50/50 forecast.  However, the actual was still always lower than the 90/10 forecast. This tells us that the grid operator generally makes conservatively high estimates. As a result, MAPC usually takes the 90/10 forecast and decreases it by 5 percent or more to set our LIKELY threshold. Our goal is to minimize the days needed to load shed, but still ensure we do not miss the annual peak altogether.

Table II. Threshold Planning

Year 50/50 Prediction 90/10 Prediction Actual 50/50 Discrepancy 90/10 Discrepancy MAPC’s

LIKELY Threshold to Start Summer

2015 26,565 25,460 24,052 90.54% 94.47% 24,000
2016 26,704 25,308 25,111 94.03% 99.22% 23,500
2017 26,482 25,059 23,508 88.77% 93.81% 23,800
2018 25,728 24,299  – 22,800
Table II shows the 50/50 and 90/10 forecasts that are adjusted for photovoltaics and demand response from 2015 to 2018.

Moving Forward in Peak Demand

What can we take from these trends? The growing capacity for behind-them-meter PV and demand response are impacting the way in which we must plan for load shedding. What lessons can we take specifically? We can continue to expect the peak day to occur in the months of July or August in the late afternoon. While the hour will most likely be from 4 p.m. to 5 p.m., shifts in weather could unexpectedly push it back to 2 p.m. to 3 p.m. As a result, load shedding at 2 p.m. may be the safest bet to ensure that you do not miss the peak hour.

From MAPC’s perspective, we can expect the annual peak will likely continue to decline in future years, all things being equal. However, the exact number will always depend on the summer’s specific weather pattern. An unusually hot summer could see the annual peak increase, even though the forecasts show a decrease. As a result, MAPC will continue to set thresholds based upon the 90/10 cool weather forecast, out of an abundance of caution.

Going forward, we recommend that you browse the resources section below to find more information about CELT Reports and MAPC’s Peak Electricity Demand Response Notification Program. We also encourage you to take our survey for us to better understand how your municipality is currently managing peak demand and how we can help you become successful load shedders. If you have any questions, please reach out to us at Peakdemand@mapc.org.

Resources