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Rafael Herzberg
Rafael Herzberg
Expert Member
Top Contributor

Demand Flexibility Exchange (DFE)

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PART I – Regulatory Parameters for Electric Utility Companies and their clients

  • Recorded demand

    Maximum integrated (in a month) kW (usually calculated 15-min-intervals) recorded by the local utility meter
  • Contracted demand

    The value established by contract, designated in kW. It may be a fixed value or a ratchet (a % of the maximum recorded demand, usually in 1 year) – depending on each local utility company.
  • Billing demand

    The highest between the recorded demand and the contracted demand
  • Demand charge

    Typically, the kW demand charges (known also as “wire fees”) account for 20% to 30% of the electric power bill. The balance is the kWh energy consumption.
  • Demand Flexibility Exchange (DFE)

    The proposed internet-based platform, to be sponsored by the local electric utility company, that will allow energy users (that contract kW demand) to exchange their kW contracted differences.
  • Proposed business

    Develop the internet-based platform so that local utility companies will be able to offer value-added services to its customers charged by kW demand as well as improve their bottom-line
  • Value added services

    By enabling customers to trade their contracted demand differences they reduce their costs
  • Local utility’s bottom-line

    By offering this demand flexibility, the local utility improves its “load factor” meaning that they will sell more kWh with the same overall kW infrastructure
  • Value of the DFE

    Each GW of contracted differences exchanged brings USD 250 MM of additional energy sales with the same utility’s CAPEX.
  • What’s the market size for DFE

    Just the USA does have hundreds of GW contracted capacity. Developed nations and emerging ones could easily have more than 1 000 GW of contracted demand.
  • Where DFE is “appropriate”

    Around the globe, because everywhere industrial, commercial, and institutional energy users contract kW demand before their local utility companies