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CEIC-02-03

"Modeling the Potential Savings of an Air Conditioner Reset Demand Response Program."

Peter van der Heijden.

Abstract:
This report discusses the results of a model that simulates Allegheny
Power's Electricity Price Response Pilot Program. This demand response
program increases the setting on the thermostat of residential
customerís air conditioners when the wholesale market price reaches a
certain minimum value. This way the program reduces the electricity
demand for that period. The model is written in Visual Basic 6.0 and
makes use of Excel to import historical data from and export output
into.

The simulations showed that the program reduces the fluctuation in a
customerís bills for the period that the program is active. Whether this
is true for the entire year depends on whether the customerís demand is
heating dominated or cooling dominated. Results also show that though
the program is successful from a reduction of peak demand point of view
this currently is not the case for the utility: the economical success
depends on the overhead costs associated with the installation and
operation of the hourly demand meter. With advancements in the
technology and economies of scale these costs should go down and the
program should become economically feasible.

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