[BETA] Fortnightly

Change is in the air. 

Demand response technology has enabled utilities, grid operators, and commercial and industrial energy users to control their power consumption for 30 years and counting. At times when peak demand threatens grid reliability or prices soar, demand response (DR) has acted as a critical and reliable resource, an intervention that subverts catastrophic grid shut-downs and ballooning bills.  None of this capability has changed.

What has changed is the way utilities can approach and execute DR programs. Now, in addition to using them to mitigate emergency situations, utilities rely on DR technologies to meet comprehensive conservation mandates and act as a focal point for other smart grid initiatives. To meet this increased scope, sophisticated DR programs are now focused on helping utilities both manage demand and increase customer engagement.

This new phase of DR brings not only an evolution in energy management practices, but also in customer relations. As the benefits of the smart grid are beginning to be realized, the industry has reached a crossroads and it’s heading down a different path, armed with the knowledge gained from recent DR programs. For example, Pepco Holdings Inc. has enrolled 150,000 customers as part of one of the largest DR programs in the nation. The Energy Wise Rewards program is expected to enroll a total of 300,000 participants, allowing them to take more control over their energy usage, save money, and move toward a more sustainable lifestyle. Another DR program is being deployed by Gulf Power . The Florida utility has achieved a 97 percent satisfaction rate by helping 87 percent of participating customers lower their electricity usage through dynamic pricing initiatives coupled with automation to respond to those prices. These results are being achieved through the new two-way capabilities of demand response.

Two-way Communication
In the past, demand response was similar to many other utility-run programs as it was almost entirely a one-way conversation from the utility to the energy customer.

In contrast to one-way communication, today’s demand response is beginning to employ two-way communication between consumers and utilities, keeping customers informed, engaging them in managing their energy consumption, and helping them tailor their DR participation and other energy efficiency programs to fit their budgets and power needs.

To make this possible, DR platforms are now integrating seamlessly with other energy information and management tools, with which consumers have become increasingly familiar. Residents and businesses are working with interactive on-line portals to help them better understand their energy use, and are using devices like programmable thermostats to manage energy choices. In the short term, this allows consumers to do things like set energy efficiency goals and easily monitor their progress. In the longer term, by integrating traditional DR programs with consumer engagement, utilities can reduce both peak demand and base load. In the process, they’ll be creating more engaged and ultimately happier consumers.

Further, by interacting directly with consumers, utilities gain insight into the demand needs they must meet, and the flexibility that consumers might have in their usage patterns. Utilities can use this knowledge to further optimize energy delivery.