FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy...
C&I Customers Get Smart
Technology creates new opportunities for demand- side management
resource more frequently, and customers can self-schedule load reductions in response to system prices.
While not all C&I DR resources can be automatically controlled, those that can be are enabling a new class of DR that can respond automatically and very rapidly to signals from utilities and grid operators, providing ancillary services that may be used to help balance intermittent renewable resources, for example. C&I customers can automate load reductions by programming load control scripts in building management systems, or sending wireless signals to lighting control systems. DR resources currently participate in 10-minute response reserves markets with strenuous rules and performance standards, such as the PJM Interconnection’s synchronized reserves market, the Electric Reliability Council of Texas’s (ERCOT) load acting as a resource program, and National Grid’s short term operation reserves market in the United Kingdom. As smart grid technologies are deployed at more C&I facilities, such DR participation will become more widespread.
• Customer-centric demand response : Historically, customers that committed to participate as DR resources were required to be available for the entire availability period defined by a utility or grid operator. Smart grid technologies have enabled DR participation to be much more customer-friendly. Utilities and third-party aggregators can now maximize customer participation by using advanced software algorithms to effectively manage a diverse set of DR capabilities across thousands of C&I customers, assembling a portfolio of customers that in aggregate provides the utility with a firm, dispatchable resource ( see Figure 2 ).
In many cases, the capabilities of specific C&I customers won’t exactly match the resource needs of the utility. For example, some types of C&I facilities might be able to curtail load for up to 10 hours at a time; others may be limited to shorter event durations. Certain facilities may be able to use direct load-control technologies to respond within five minutes of event notification; others may require more time to manually shut down certain processes. Some types of load ( e.g., air conditioning) are able to reduce load only during certain seasons, while others can perform consistently year-round. A utility might need a firm amount of DR capacity to be available from noon to 8:00 p.m., but a manufacturer might not operate past 6:00 p.m. That manufacturer can and should be able to contribute to the DR program, but will require a complementary resource in the DR portfolio that can respond from 6:00 p.m. to 8:00 p.m.—and smart grid applications can help manage a diverse portfolio of C&I DR effectively and reliably.
• Real-time energy data—“You can’t manage what you don’t measure” : Historically, most C&I customers have had only monthly billing data to manage electric utility costs. Today, C&I smart grid technologies are available that capture real-time building data—meter data and potentially sub-meter and building system data—and present that data in meaningful ways. These technologies can drive value for C&I customers by empowering management teams with much more insight about energy use and costs.
Many C&I customers find that being able to view such real-time data gives them enhanced awareness of their overall energy usage.