Michael Senff, President, Advantage Energy Partners
Over the last 10 years, Demand Response (DR) participation has increased and continues to provide electricity consumers with an opportunity to leverage their consumption behaviors/patterns to optimize their energy costs. During this time, the DR market has matured by way of legislation, program development, product development, innovation, and education.
DR is essentially a series of programs sponsored by the power grid to allow electricity customers to be “on-call” to reduce their consumption when the grid is reaching its capacity. During these stressed periods a utility will declare a DR event, also known as “Conservation Events”, “Peak Events” or “Peak Hours”. Customers that respond to the DR event by reducing or eliminating their consumption will recognize various levels of savings on their energy costs.
With the DR market evolution over the last 10 years, the programs offered by utilities allowing for customer savings have moved from Mandatory only to Voluntary Economic DR programs. For those enrolled in the Mandatory programs, there was a requirement to curtail load during a DR event. We are now seeing Voluntary programs that allow customers the flexibility to decide if they will participate in an event, reduce their consumption, and subsequently be compensated.
Technology has also played a major role in the evolution of DR, leading to the advent of Demand Response Management Systems (DRMS). The DRMS allows customers to adjust their electricity consumption in a “Peak Period” by scheduling tasks to run outside of the “Peak Period” or by leveraging an alternative source of energy during this time. As computing technology moved forward, so did these DRMS. These systems are now available as a cloud-based Software as a Service (SaaS), allowing customers to monitor and automate the curtailment of electricity at their facilities. This made a DRMS more affordable and accessible to customers of all sizes. These systems are now offered by curtailment service providers (CSPs).
In addition to the computer-related technologies, the advances in smart devices, smart grid, and alternative sources for energy have been a factor in the growth of DR. Companies are now recognizing what we already see in our homes with the use of Smart Appliances, Thermostats, Plugs, and Integration with networked Building Automation Systems (BAS). The increasing availability of solar and battery walls has also provided customers with alternative sources of energy. These devices enable customers to reduce their overall consumption and be proactive about scheduling curtailment during a DR Event. DR continues to evolve, as does our approach and outlook to energy consumption. We continue to move towards an environment that provides customers options as to how, from where, and when they will consume electricity. Now, these customers can be compensated based on their choices.
Michael Senff is President of Advantage Energy Partners. Mr. Senff has been in the retail energy industry for over 25 years serving as President of some of the largest energy retailers in the business, including, Guttman Energy and Direct Energy.