LADWP: Using Demand Response to Support Los Angeles’ Grid and Reduce Emissions

Overview

The Los Angeles Department of Water and Power (LADWP) consists of two systems, the Water System and the Power System, delivering both drinking water and electricity to residents of Los Angeles County (LA). The LADWP Water System is reducing greenhouse gas emissions and supporting LA’s power grid by participating in a Demand Response Program developed by the Power System to reduce load during high peak periods.

Distributed energy resources (DER), including demand response (DR), are a key component of maintaining grid stability as LADWP’s Power System works toward achieving its aggressive target of 100% renewable energy by 2035 through “LA100.” At the same time, the Water System has set an aggressive target of maximized recycled water use by 2035 through Operation NEXT, a water supply initiative expected to increase water supply reliability but also increase electricity demand on LA’s power supply. This collaboration between LADWP’s Water System and Power System provides co-benefits and cost savings for both, even though each System functions independently with its own separate budget. 

ORGANIZATION TYPE

Industrial

BARRIER

Need to reduce energy load obligations as a water utility with ambitious water, energy, and GHG emissions reduction goals

SOLUTION

Incorporate demand response into water system operations

OUTCOME

Decreasing energy and water demand, avoiding the use of high GHG generating sources of electricity during peak periods, and increasing grid reliability 

Policies

LADWP’s Demand Response program is an incentive based, voluntary demand management program for businesses that helps reduce their utility bills during times of peak power demand, ensuring the continued reliability of power for Los Angeles. The ability to reduce loads during peak demand reduces capacity costs and supports grid stability. This becomes even more important as climate change increases the frequency and severity of heatwaves (leading to spikes in electricity demand to run air conditioners) and electrification increases load on the entire system. The Power System’s current commitment for the DR Program is 35 MW with a target of 300 MW by 2030 and 500 MW by 2035. Program success relies on the participation of large commercial and industrial customers such as: Anheuser-Busch, Los Angeles Community College District Campuses, L.A. Live, Los Angeles Unified School District Schools, and Paramount Pictures.

Process

Recognizing the value of managing its pumping operations to support the grid, the LADWP Water System has been examining demand response and additional distributed energy resource opportunities for its facilities since it joined the Better Plants program in 2015. Participation in Better Plants increased system management awareness of the magnitude of energy use by water treatment and distribution operations. The Power System kicked off the DR program that same year and ramped it up significantly the following year in response to the curtailment of natural gas storage at Aliso Canyon. When the Water System became aware of the Power System’s need for additional participation in the program, they committed to 4 MW of DR capacity, which they exceeded in every event. 

The Power System determines when a DR event is called based on peak demand for power and resource availability. Participating customers are notified through email or telephone, and they initiate their own DR curtailment procedure to achieve a predetermined amount of demand reduction (kW shed). Each participant controls, defines, and plans the curtailment for the 4-hour period defined by LADWP, between 1 pm and 6 pm on the day of the event. The adjustment relieves stress on the electric grid and ensures power reliability for all.   

For the Water System, demand reduction is achieved largely through changes in water pumping operations along with district yard measures. Upon notification of an upcoming event, water system operations charge up water storage tanks during the evening prior to or the morning of the event. Then, tank water system level setpoints and/or pressure setpoints are reset to delay pump start commands for selected pump stations. District yards also reduce load by curtailing lighting fixtures serving offices and conference rooms, increasing HVAC temperature setpoints by 2oF, and curtailing forklift charging and hot water heating. 

The next step in this process began with joining the Better Climate Challenge. As the Water System examined the pathway to reduce its carbon footprint, it highlighted the value of the interdependence with the Power System. As the Water System looked at Power System target of 100% clean energy by 2035 and the anticipated increase in energy use with the transition to maximized recycled water, they viewed the opportunity and importance to integrate efforts in their design and planning activities to support LA's grid without taking away from their own mission. In a meeting with members of water engineering and power planning, both Systems agreed to further collaborate by identifying and evaluating additional DER opportunities in water operations.

DR is now incorporated into Water System operations as this division has committed to participate in the program and find ways to support LADWP power grid’s transition to 100% clean energy. The amount of GHG emissions avoided will increase in coming years. As the renewable content of the power mix increases, the non-peak power mix emissions factor will decrease, widening the gap between peaker plant emissions and the power mix, thereby increasing the emissions avoided for every kWh not produced by peaker plants during DR events. In addition, the need for DR will increase due to increasing heatwave frequency and severity and increasing loads on the system.  In the future, the DR profile may change to take advantage of periods where solar generation exceeds customer demand and shift load away from periods where demand exceeds solar generation. 

Tools & Resources

Several tools and resources contribute to facilitating the evaluation and expansion of DER opportunities within the Water System. Planning studies like the LA100 study and the Urban Water Management Plan, energy data management and reporting, and the Better Plants and Better Climate Challenges, all contribute to raising awareness, enabling tracking results, and developing pathways to zero carbon. 

Measuring Success

LADWP used three categories to categorize key success metrics: GHG Emissions Avoided, Grid Benefits and Avoided Infrastructure Costs, and DER Projects Moving Forward.

  • GHG Emissions Avoided – Water System participation in DR has resulted in a 27% decrease in GHG emissions that otherwise would have occurred. With 388,000 kWh of energy use shifted to low- or off-peak hours, 100,000 lbs. of CO2e were avoided over the period of 2019-2021. Since the energy use is shifted rather than eliminated, the difference in GHG emissions is the amount of energy demand reduced during the DR event, times the difference in the emissions factor for natural gas-fired peaker plants and the emissions factor for the overall power mix.   
  • Grid Benefits and Avoided Infrastructure Costs – Grid management is a matter of balancing supply and demand. DR benefits the grid by providing flexibility in managing demand response to supply availability. This flexibility, in turn, results in avoided costs associated with the additional generation and infrastructure capacity that would otherwise need to be built to meet peak demand. Water Systems’ commitment to reduce demand by 4MW per event resulted in approximately $400,000 in avoided cost, at a rate of $100 per kW. In addition, during the record-setting California heatwaves in August 2020 and September 2022, LADWP’s DR efforts were instrumental in helping keep the lights on beyond Los Angeles, thereby benefitting the rest of the State. LADWP and its DR partners implemented additional demand reduction measures which enabled providing temporary generation capacity to the California Independent System Operator (CAISO) balancing authority reducing the need for rolling power outages in their territory.
  • DER Projects Moving Forward – The mission of each system will not change, but DER will provide a unique opportunity to co-plan, collaborate, and develop strategies. The metrics for DER will be the number of projects implemented and the associated energy savings, load reduction, and load management benefits of each project.  These projects will also provide avoided cost benefits for every kW of peak demand reduction. 

Outcomes

Over the last three years of participation in the Demand Response Program, water operations reduced demand an average of 7,100 kW per event and shifted a total of 388,000 kWh of energy use overall, avoiding 100,000 lbs. of CO2e emissions, a 27% emissions reduction that otherwise would have occurred. These practices will continue to provide benefits to the grid as LADWP transitions to 100% renewable energy. Overall, DR benefits both LADWP and its customers through: 

  • Reduced Environmental Impact: DR decreases the peak load that must be served with higher GHG emitting dispatchable resources. For LADWP, this means less use of natural gas fired power plants.   
  • Reduced System Costs: DR eliminates or defers the need to build additional power plants and the associated transmission and distribution infrastructure. It can also reduce purchased energy costs by reducing the amount of energy that would otherwise be purchased to meet load, especially during the expensive peak demand periods.  
  • Increased Reliability: The ability to strategically lower energy demand is one way to help overcome supply‐demand constraints and reduce the chance of overload and power failure. This is especially important at those few critical peak times each year when demand is at its highest, as well as times when generation units are off‐line. 
  • Integrating Renewables: As renewable energy continues to become a larger percentage of LADWP’s generation portfolio, there may be times where DR events are initiated to increase demand and absorb the renewable energy, reducing overall system costs. 

With its ambitious water and power targets, LADWP is embarking on major infrastructure investments over the next 15 years. The Water System’s goal to maximize water recycling by 2035 will require construction of additional treatment, storage, and conveyance infrastructure within the LADWP territory. This provides a unique opportunity to incorporate DER as new systems are being developed and designed. The evaluation and implementation of DER opportunities in existing and new facilities will evolve and grow throughout this process, contributing to the Power System targets of 1000 MW of local solar, 300 MW of DR, 1000 MW of battery storage, and support for 580,000 electric vehicles by 2030.    

The practice of incorporating DR into water operations is replicable and applicable to water systems across the country. Demand response programs are offered by many major power utilities. Participation in these programs benefits water utilities by reducing energy costs, reducing contributions to GHG emissions, and supporting the grid in times of need.