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'Demand Response Will Need to Increase by Tenfold'

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Nevelyn Black's picture
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Nevelyn Black is an independent writer with a background in broadcast and a keen interest in renewable energy.  In the last few years, she transitioned from celebrity interviews and film shoots...

  • Member since 2017
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  • Jul 19, 2022
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‘Enough about the heat and the strain on the grid,’ might be your initial reaction but as I started to write this article the lights flickered, the air conditioner wheezed, and the power went out.  The high across the metro area was 99 degrees today and there is a heat advisory in effect until 9:00 this evening.  Utilities employ peaker plants to meet demand when the grid approaches maximum capacity.  But because the power they supply is more expensive than standard power generation facilities, utilities are looking to demand response management to maintain balance in electricity networks. Demand management programs incentivize energy use reductions and alleviate stress on the grid. 

 According to the International Energy Agency (IEA), the volume of demand response agreements in place will need to increase 10-fold over 2020 levels to meet the net-zero carbon emissions by 2050 objective. “These particular agreements are becoming more and more common, as the grid is evolving,” says Gary Lawrence, power and grid segment president at Schneider Electric. “And they’re evolving very fast in the U.S., the U.K., and Australia.”   Meeting net-zero goals are important but meeting demand for a growing population, in an age of electrification, is crucial.   

“This is an opportunity for organizations that can predict and react quickly to market volatility using DSR and AI platform and transform generating saving and revenue instead of being affected by the fluctuation of the grid,” said GridBeyond’s SVP North America Wayne Muncaster.  Last week was “the third time this year that ERCOT has called on Texans to cut power usage and the second time it has warned of the potential for rolling blackouts.”   Last week Texas’ PUC agreed on the expansion of the state’s industrial demand response program.  The budget for the program, also known as the Emergency Response Service (ERS), will be increased by $25 million effective immediately. 

California’s PUC will also expand the state’s efforts to increase demand response management. Their Proposed Decision acknowledges their current approach needs an update, stating, ‘The Commission’s existing piecemeal approach to load management may hinder the growth and effectiveness of demand flexibility.  In many decisions and forums, the Commission has recognized the critical role of demand response in ensuring system reliability, especially during severe weather events, as California’s electric system continues to integrate greater amounts of renewable generation and energy storage.’  The California PUC proposed decision agrees it is a challenge to coordinate demand flexibility but also views it as an opportunity to meet system needs more effectively, on a regular basis.

Most people want to be part of the solution.  They agree to be a team player, to participate in conservation programs and to use less energy but sometimes our best efforts don't produce the results needed to the keep the power on. What more can be done?

As I sit in the dark, at the kitchen island, typing this document, with the soft glow from below the keys of the laptop’s keyboard, and the screen’s white shining light, it’s very hard to ignore the extreme heat and the effect it’s having on the grid. 

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Matt Chester's picture
Matt Chester on Jul 19, 2022

The word 'smart' gets thrown around too much, this is the type of area where we'll wonder why it took us so long to get smart with planning the grid. Demand response removes the brute force strategy and makes sure we're intelligently incentivizing where and when power is generated and consumed. 

Michael Keller's picture
Michael Keller on Jul 20, 2022

The California PUC has chosen a path of excessively deploying unreliable green energy. Costs have rocketed upward to some of the highest electric rates in the nation.

Adding insult to injury, the PUC’s solution to lack of power when needed: vastly increase rates (costs) when demand is high. The beneficiaries are utilities and commodity brokers. The poor and middle class are the biggest losers.

larry hooks's picture
larry hooks on Jul 27, 2022

yes, the ordinary rate payer seems to be the third-class citizen, as usual. 

Rafael Herzberg's picture
Rafael Herzberg on Jul 27, 2022

Hi Nevelyn,

Sure DR should be increased. One additional way to go (synergic) is developing a demand exchange, which is a tool that could really help. Watch this 6 min video  to know this concept I created and I am ready and willing to team up with an entrepreneur to make it happen.

larry hooks's picture
larry hooks on Jul 27, 2022

The incentives to be part of this type of program need to be greatly increased with contractual agreements to the rate payer. For instance, free power with only delivery charges during off peak hours. Utility companies are not the most trusted people on the planet. Offering 10-25% off is not going to get it.

Christopher Neely's picture
Christopher Neely on Jul 31, 2022

Perhaps accelerated investment in efficiency programs, such as weatherization, could help as well. Demand in major markets is going to continue growing, but ensuring that energy use is as efficient as possible could be more realistic than asking the bulk of your customers to voluntarily change their behavior and use less power. 

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