Demand Response News

Pike Research released a report early this year entitled “Demand Response for Industrial Markets.” The report examines the crucial role the industrial sector plays in successful demand response (DR) markets. DR providers and utilities are targeting the commercial and industrial (C&I) sector specifically to assist in balancing demand on the electric grid in times of stress. But, is this the best strategy for demand response? Or should DR change focus to the residential sector, which, according to EIA data, consumes more electricity in total?

The answer seems to be: stick with the industrial sector.

The report from Pike Research predicts that the growth of demand response will be considerable over the next few years. Globally, peak load curtailment currently amounts to about 26,849MW. By 2019, Pike estimates that number will grow to 62,084MW. That will equal a payment growth from $1.8 billion in 2013, to $4.3 billion by 2019.

Facilities that use a large amount of electricity often hear about, or participate in, demand response programs. Demand response programs typically compensate facilities based on their curtailment during a specified time period. The utility or market operator usually calls this “event” during a time when the grid is under a considerable amount of stress, and curtailment is needed to prevent a blackout or brownout. Facilities should be taking advantage of these programs to the maximum extent possible, and here’s why:

1. It makes you money.

Demand response programs offer large payments for facilities willing to reduce their electric use during periods of stress on the electric grid. These payments are substantial. For example, a facility able to reduce 1,500KW during an event will receive a payment of about $65,000. Demand response providers such as Energy Curtailment Specialists, Inc. will pay your facility in the form of a check, so you can use the money any way you like!

Alaska Republican Senator Lisa Murkowski released a report yesterday morning that detailed about 200 recommendations for energy policy through the year 2020. Her report, titled Energy 20/20: A Vision for America's Energy Future, focuses on the progress that must be made in the US to achieve energy security and independence in the next decade. The report highlights five principals that are vital to our national interest. Murkowski reports that she “believe[s] there is a consensus that it is in our national interest to make energy abundant, affordable, clean, diverse and secure. Our challenge is to align federal policy with that consensus.” Murkowski stresses in the introduction of the report that it is not meant to be an energy plan, but rather a tool to initiate serious discussion between Congress and the President so that a consensus can be reached on important energy issues.

A recent study published in the Journal of Power Sources has proposed that a mix of wind and solar energy production, along with energy storage technology and a standby supply of fossil fuel could create a 99.9% renewable energy grid by 2030. The study, titled “Cost-minimized combinations of wind power, solar power and electrochemical storage, powering the grid up to 99.9% of the time,” by Cory Budischack et al, investigates not only the issue of a renewable energy grid, but also minimizing the cost associated with renewable energy. The possibility of up to 99.9% renewable energy capacity is promising, but the study almost ignores demand response, and that could provide the extra .1%.

Demand response (DR) involves consumers curbing their energy use, or implementing distributed generation, to relieve stress on the electric grid when supply falls short. DR programs are already in use all over the country, and successfully prevent blackouts and brownouts every year. The added benefit of employing DR resources rather than fossil fuel generation is that DR is less costly than operating peaking plants. The focus of Budischak et al in the study was to keep costs to a minimum, so it seems DR may be a more fitting resource to consider.

Ontario’s Independent Electricity System Operator (IESO) has selected new sources of regulation services to assist in demand-side storage and delivery of additional energy to balance the province’s electric grid. These resources include battery storage, flywheel energy storage, and demand response. The integration of these technologies into Ontario’s electric grid should increase reliability and most importantly, flexibility. Regulation can correct sudden power system changes in frequency, which balances the flow of power, and as a result, grid reliability.