This post is one in a series featuring the complete slate of advanced energy technologies outlined in the report This Is Advanced Energy.
Photo courtesy of EnerNOC.
Demand Response (DR) is a grid management tool through which utilities and grid operators provide information and/or incentives to customers to encourage them to reduce energy use
at specific times. DR can use control technology that automatically responds to prices or other signals, or customers may respond to a DR request manually. Load reduction is typically achieved by temporarily switching off or reducing usage from cooling or lighting or by postponing energy-using activities, although some customers may switch to onsite generation. Storage-backed DR is a growing application that enables load reduction without a shift in energy use.
The United States DR market reached 1.25 billion in 2014, up 14% over 2013, and now accounts for almost two-thirds of the global DR market. The estimated potential peak load reduction from DR technology in independent system operator (ISO) regions in 2013 was almost 29 GW, up 9% from 2012. DR programs have traditionally targeted commercial and industrial customers, participating through aggregators.
EnerNOC works with dozens of utilities to incorporate the latest DR technologies, such as sub-second DR dispatches and automated DR, or AutoDR, into their programs. EnerNOC worked with Louisville Gas & Electric and Kentucky Utility Co. to incorporate AutoDR into their commercial and industrial DR program. Many utilities also offer DR programs to residential customers, incentivizing load curtailment through one or more of the following: time varying electricity rates, behavioral communications, participant incentives, and rebates for enabling technologies. Opower, a provider of energy efficiency and DR, is partnering with Baltimore Gas and Electric (BGE) in Maryland to deliver highly personalized communications to over 1 million residential customers, offering a rebate to customers who reduce energy consumption during peak hours.
Demand response allows customers to be compensated for providing a valuable service to grid operators and also gives them more control over their own energy usage and costs. EnerNOC enabled Midwest Energy, Inc., of Kansas to reduce peak demand by targeting agricultural customers, with an annual payment of $1,000 providing additional income for participating farmers. At the same time, DR improves reliability, helps to integrate renewable generation, and moderates energy prices for everyone by lowering demand at critical times and offering a lower cost alternative to expensive and rarely used peak generating capacity and transmission and distribution (T&D) infrastructure. When coupled with automated load controls, DR can provide sub-second dispatches and is increasingly being used by utilities at the distribution system level to manage more local grid issues, while also providing wholesale market ancillary services such as spinning reserves or regulation services.