Q & A: What is Demand Response?

With the current high temperatures, buildings are demanding a lot from the grid to keep building occupants cool. By reducing energy loads during peak times, buildings can help reduce strain on the energy infrastructure – and get paid for it – with a program called demand response.

Demand response programs exist to trim electricity demand during times of high electricity usage. By avoiding high energy loads during peak hours, the energy supply does not need to bring back up power plants on-line, which can be more polluting than the area’s main power sources.

Customers achieve these reductions by enrolling in a demand response program, for which they are compensated for how much demand they are willing to shed if necessary. Customers estimate how much electricity use can be reduced, usually through turning off elevator banks, raising temperature set points, and selectively turning off lighting during the day. More sophisticated systems may include using a generator for backup power.

DR can prove to be a compelling revenue stream for a real estate manager who can eliminate some services (an elevator bank, turning off a chiller) for a few hours without disrupting business within their property. Usually, demand response events happen a few times a year for a few hours. There have been three events in NYC so far this year: on the afternoons of June 9, July 21, and July 22.

Generally, customers enroll in a program through a demand response provider such as Constellation Energy’s C-Power, Energy Curtailment Services (ECS), Enernoc, or Hess Energy Services, who acts as demand aggregators. These aggregators negotiate with the utility to get the best reimbursement rates for their customers. They usually have a proprietary system to track demand reduction, such as a submeter attached to a customer’s electricity meter that wirelessly transmits electricity data during demand response events to determine whether the load shedding target (in KW) was achieved.

If customers meet their load shedding target, they are paid by the aggregator.

Great Forest is working toward enhanced metrics for certain clients who have experience with DR, to help them understand in detail their facilities’ current contribution to lowering peak load in New York and how they might increase their commitments (or “negawatts”) for the future. On Friday 7/22/2011 for example, the Con Edison peak demand reached an all time high of 13,189 MW. The previous record had been 13,141 MW on 8/2/2006. Con Edison reports 500 MW of DR resources deployed specifically on Friday, and reports of load committed to DR programs totalled 800 MW (including the Lower Hudson Valley and Long Island). We will be looking forward to working with all DR clients who want to examine performance during recent events and help the City avoid another record in 2012.


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