kandal88@students.rowan.edu
,
jansson@rowan..edu



Keywords: environmental, diurnal storage, benefits, PJM


There are many local benefits to providing cool storage for industrial, commercial and institutional entities. Usually
they involve economies associated with O&M cost reduction (off peak pricing of electricity, optimal operational
efficiencies of equipment) and reducing capital required to meet peak cooling system demand (by deferring or
eliminating new chiller construction). PJM provides extensive economic (marginal and average pricing)
information already available to utilities, customers and power marketing professionals on its website and soon
hopes to publish environmental attributes of its generation units to supplement that. The variations in pricing
throughout a single day during the summer peak demand period within the northeastern portion of the United States
provides significant economic incentives to assure that adequately designed diurnal storage systems can provide
significantly short paybacks. It is likely that seasonal storage, similar to that being developed at Richard Stockton
State College to supplement its world-famous ground-source heat pump system
1
, will also be able to take advantage
of seasonally varying marginal prices available locally and across PJM. Many universities are already reaping the
economic benefits of diurnal price fluctuations. This paper analyses and summarizes both the diurnal and seasonal
economic benefits that can be achieved by well developed diurnal and seasonal storage technologies. Tabular as
well as graphical results illustrate the benefits in terms and quantities that might prove useful to individuals and
institutions considering diurnal and seasonal cool storage as a means to economically save on electric demand,
infrastructure expansion through daily interactions with the PJM utility grid.

1. INTRODUCTION

In todays world, the energy usage in Universities typically follows the common pattern of the utilitys load shape
(higher demands during the day with relatively lower demand at night). Significant economic benefits may be
derived when such technologies as diurnal and seasonal cool storage are integrated on the university side of the
electric meter. Diurnal and seasonal cool storage technologies enable a campus to store cooling in water, aquifers or
other systems when utility system prices are significantly lower than normal tariffs. Often storing the cooling
during these off-peak periods inherently leads to equipment running more efficiently compared with on-peak
(warmer outside temperature day time). This operating strategy enables the use of the stored cooling in a campus
chilled water loop or campus building when electrical energy prices are high (reducing demand) and when typical
HVAC equipment would perform less efficiently.


The economic benefits of diurnal and seasonal energy storage technologies are derived by taking advantage of the
significant reduction in marginal off-peak energy compared with published utility tariffs. Often less equipment can
then be used with lower capacity and lower number of installed units since the stored cooling provides a
commensurate demand reduction for the campus overall. Equipment can also be operated more efficiently and on
its optimal operating curve. When a campus considers the feasibility of seasonal energy storage (in a local aquifer
for example), significantly greater operating efficiency benefits can be derived. By taking advantage of the free
cooling available in the winter periods achieved by conventional cooling towers and the use of winter air instead of
chillers, extremely high coefficients of performance for the entire system can be achieved. This paper highlights the
relatively stark contrasts between off-peak and on-peak marginal energy that can be observed on the PJM system.
This data can be used effectively to determine the operational cost benefits of using off-peak energy to charge
diurnal cool storage technologies and provides seasonal contrasts for use when considering the costs to provide
charging for aquifers or longer term storage systems.
2. OVERVIEW OF PJM

PJM Interconnection is a regional transmission organization (RTO), which monitors and dispatches the electricity
grid serving parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio,
Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. While PJM never takes ownership
of the electricity that flows through the RTO they are responsible for the record-keeping of all transactions
occurring between utilities, IPPs, and other generators as they sell to and buy power from each other. Multiple
control areas and a single regional market have been developed that makes transactions between the control areas
seamless, in this largest of interconnections in the world. PJM facilitates a collaborative stakeholder process that
also assures incentives for adequate investment in transmission and generation within the member areas.

PJM collects all the daily and monthly energy data from its control areas, which is updated in real-time
2
. The
information can be easily accessed through there website by using their quick links drop down menu and selecting
Real-Time LMP (Locational Marginal Pricing). LMP is based on actual flow between control areas, not scheduled.
LMP is calculated as the sum of generation marginal cost, transmission congestion cost and the cost of marginal
losses. The values within the Real-Time LMP spreadsheets represent the marginal cost (Mills/kWh or $/MWh) in
all of its control areas. In some situations, more often than one would imagine, PJM will have periods when there is
excess generation on the system and inadequate demand to consume it (typically in low load periods in the summer
when all units are available). Generators are therefore at such times asked to back down their units to minimum load
levels. At such times LMP can also have negative values. Storage systems that could consume electrical energy
during these periods would essentially be consuming electricity with only a delivery charge but a zero energy
component.

One local control area of concern within PJM is Atlantic Electric Company (AECO). This is where the conference
is being held and where Stocktons geothermal system is located. The geographical region can be seen in Figure 1.

Figure 1: AECO South Jersey Territory

There are no sources for generation of electrical energy for AECO from the east (due to its isolation as a peninsula)
and there are transmission limits from the west. AECO are also retiring some of their generating units in the east
(BL England). This will further raise costs in the Atlantic Electric area. They have already relatively higher
marginal cost when compared to PJM.

3. ANALYSIS OF MARGINAL COST (PJM & AECO, 2005)

The seasonal variation in PJM is quite significant with highs during the summer months over 160 Mills/kWh and
lows of 10 Mills/kWh in the winter. Volatility has increased over the past 5 years as regional utilities have
experienced deregulation within their state jurisdictions and independent power producers have entered the
wholesale generation market. While the most significant amounts of daily transactions are scheduled between
buyers and sellers the PJM provides an hourly price signal (estimated day and week ahead) to allow trading (buying
and selling) of electricity at the margin within PJM and sub areas as the actual days loads and weather conditions
materialize. This provides a significant benefit to institutions that have the ability to store energy on their site to
take advantage of daily and weekly fluctuations in the value of electricity using it for providing cool storage when
the prices are low and releasing the stored energy when the electricity prices are high.


Figure 2: PJM Daily Summer Analysis 2005

Figure 3: PJM Daily Winter Analysis 2005

Figures 2 and 3 depict a typical summer and typical winter cost analysis respectively. In the summer, for nearly
eleven hours each day average marginal costs fall well below 50 Mills/kWh and in some cases prices approach
nearly zero. In winter there is an example of a negative price signal. In both seasons peak pricing exceeds 250
Mills.

Figure 4: AECO Daily Summer Analysis 2005


Figure 5: AECO Daily Winter Analysis 2005

AECO marginal costs are considerably higher when compared to PJM as a whole. While similar prices occur in the
winter period at AECO as within PJM data analysis, the summer data shows that there is a remarkable difference
(approximately 200 Mills/kWh higher for AECO during peak periods).


4.

SUMMARY OF DAILY AND SEASONAL PRICE VARIATION

A daily and seasonal analysis was completed for PJM-RTO and AECO for the complete year of 2005. An analysis
of off-peak and on-peak demand cost was done which gives an average off-peak savings from PJM and AECO.
Apart from December both PJM and AECO exhibit remarkably economic off-peak prices for electricity at the
margin, which could be taken advantage of by diurnal storage technologies (3.0 and 3.7 cents per kWh
respectively). This data is for a remarkably long recharge period approaching 10 or more hours.


Figure 6: AECO & PJM Off-Peak Cost Analysis



Figure 7: AECO & PJM On-Peak Cost Analysis

Both AECO and PJM