Demand response
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In demand response (DR), electricity customers reduce their consumption at critical times or in response to market prices. This is different from energy efficiency, which is performing the same services but using less power. In demand response, customers shed loads in response to a request by utility or favorable market conditions. Services (lights, machines, air conditioning) are cut back for a few hours or a day at a time. An alternative is to start an on-site generator to supplement the power grid.
Incentives to shed loads
Energy consumers need some incentive to respond to such a request from their utility. Demand Response incentives can be formal or informal. For example, the utility might create a tariff-based incentive by passing along short-term increases in the price of electricity. Or they might impose mandatory cutbacks during a heat wave for selected high-volume users, who are compensated for their participation.Commercial and industrial power users might impose load shedding on themselves, without a request from the utility. Some businesses generate their own power and wish to stay within their energy production capacity to avoid buying power from the grid. Some utilities have commercial tariff structures that set a customer's power costs for the month based on the customer's moment of highest use, or peak demand. This encourages users to flatten their demand for energy, known as energy demand management, which sometimes requires cutting back services temporarily.
Technologies for DR
Technologies are available, and more are under development, to automate the process of demand response. Such technologies detect the need for load shedding, communicate the demand to participating users, automate load shedding, and verify compliance with demand-response programs. [GridWise] and [EnergyWeb] are two major federal initiatives to develop these technologies. [Universities] and private industry are also doing research and development in this arena.Short-term inconvenience for long-term benefits
Shedding loads during peak demand is important because it reduces the need for new power plants. To respond to high peak demand, utilities build very capital-intensive power plants and lines. Peak demand happens just a few times a year, so those assets run at a mere fraction of their capacity. Electric users pay for those idle "spinning reserves" with rate hikes. DR is a way for utilities to avoid large capital expenditures, and thus keep rates lower overall.Available Markets
ISO New England
- Real Time Demand Response
- Real Time Price Response
- Day-Ahead Option
NYISO
- Day Ahead Demand Response Program
- Emergency Demand Response Program
- Special Case Resources
Sources and additional resources
[What Is Demand Response?] A brief overview of demand response, it's benefits, & capabilities.[Demand Response in a Nutshell]
[EnergyWeb] Bonneville Power Administration research initiative
[Demand Response: Risks, Rewards for Early Adopters]
[GridWise] Pacific Northwest National Laboratories research initiative
[Distributed Generation's Technology Threesome] Demand management, distributed generation and alternative energy work in unison to solve peak demand problems
Providers
[EnerNOC, Inc.] Demand response and energy management solutions provider for commercial & industrial end-users, utilities & system operators, and wholesale suppliers.[ConsumerPowerline] A Strategic Energy Asset Management firm offering services like Demand Response and Steam Monitoring.
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