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The Smart Grid and Demand Response Programs

  • January 24, 2018

Most consumers of energy are familiar with the grid, which brings you the electricity you need from power plants through transmission lines.  Built in the late nineteenth century, our original electric grid consists of 300,000 miles of transmission lines with over 1 million megawatts of generation capacity.  However, as consumer demand changes and the industry evolves, a system over a hundred years old may require some updates.  Welcome the smart grid, one that is ready to respond to changes in electricity demand and quickly and efficiently implement demand response programs.

What makes a grid smart?

To make a grid smart, it requires a communication between the customer and the utility generating the electricity.  A smart grid has controls, automation, and new technologies all working together to respond to changes in electric demand.  The added technical abilities to the grid provide numerous benefits to both suppliers and consumers:

  • Supportive of renewable technologies – Simplifies the integration of renewable energy sources into the grid. Traditional grids face difficulties incorporating renewables due to their frequent intermittency. (Solar needs sun, wind energy needs wind)
  • Keeps the lights on – With aging infrastructure on the traditional grid, the smart grid ensures a more reliable energy service. Smart meters allow utilities to be alerted of outages so that they are managed efficiently and power is delivered consistently.
  • Saves money – By reducing operation and management costs for utilities, consumers ultimately see reductions in their costs. Smart meters give customers real-time information about their consumption resulting in a reduction of the peak demand, lowering electricity rates.

Originally, the implementation of the smart grid had goals of improving demand-side management, increasing energy efficiency, and promoting a self-fixing grid that supports reliability and resiliency.  However, as technology has continued to advance, the modernized smart grid has allowed for an increase in consumer control and cost savings through demand response.

What is demand response?

Demand response gives consumers the opportunity to voluntarily reduce or shift their electricity usage during peak hours by incentivizing with lower rates or other forms of compensation.  Demand response programs are being used by utilities and operators to balance supply and demand of electricity in an evolving market.  In heat waves or harsh winters when utilities worry about the reliability of power supply, demand response becomes increasingly useful.  Without demand response, grid operators may be forced to rely on expensive or polluting power plants to meet demand peaks.

How does it work for my company?

For each consumer of electricity, demand response energy-saving measures are implemented differently.  Commercial real estate owners may find that their tenant’s businesses rely heavily on power for production, meaning certain energy-saving methods may affect their operations.  However, simple adjustments to facilities such as turning off lights, raising temperature set points, or shutting down select elevator banks are just some of the ways to easily participate in demand response programs.

Working with a team like EnergyWatch will help to identify strategies that will most benefit your facilities.  EnergyWatch evaluates applicable programs, notifies you of potential peak load days, verifies and quantifies performance, provides real-time visualization of performance and alerts through watchwire , and optimizes your procurement strategy to take advantage of peak load management activities.

Download the Watchwire Factsheet

Sources:
https://www.forbes.com/sites/energyinnovation/2017/03/13/how-a-smart-grid-relies-on-customer-demand-response-to-manage-wind-and-solar/#54fa47361461
https://www.greenbiz.com/blog/2014/04/29/greenbiz-101-what-do-you-need-know-about-demand-response
https://www.forbes.com/sites/jamesconca/2015/02/24/solving-americas-energy-future-requires-a-demand-response/#6551fff25984