How ConEd is boosting demand management to save on grid upgrades
The utility wants to use demand management to put off investing in a billion-dollar substation
With a peak load in excess of 13,000 MW, Consolidated Edison is doing everything it can do manage its demand and avoid construction of additional generation, transmission and distribution assets. In the past year the utility has poured millions into energy efficiency and demand response, adding new management programs and increasing a suite of rebates.
The utility pays out hundreds of millions of dollars to its customers for participating in a host of programs aimed at delaying billions of dollars in infrastructure upgrades. And as customers are increasingly asked to be conscious of their energy decisions, the utility is also utilizing third-party cloud computing vendors which ultimately make managing load simpler and reduce the time it takes to get demand management programs up and running.
Most recently, the utility turned to EnergyOrbit to deploy its demand side management operations platform. The company is helping ConEd target 100 MW of demand reduction, primarily from commercial and industrial customers.
"We looked at different options and decided that EnergyOrbit's cloud-based solution would be best for helping us perform the important functions we need to do in our demand management programs," said Vicki Kuo, section manager for customer technology solutions at Con Edison. "We can get to the information we need easily and quickly, which is essential for providing our customers with the best service possible."
The platform includes a project management system which encompasses customer engagement and acquisition, which according to EnergyOrbit President and founder Udi Merhav can help get programs up and running faster, ultimately speeding up customer rebates. From program conception to cutting a check, Merhav said cloud computing demand management can help utilities push implementation up to 75% faster.
With 3 million customers and a service territory that includes New York City, Consolidated Edison faces a challenge to continue supplying power without having to invest too heavily in new infrastructure. Regardless of managing its load — which peaked at 13,322 MW on a hot summer day in July 2013 — the system requires infrastructure upgrades and expansions. Last year the utility spent more than $1 billion on infrastructure and is in the midst of a four-year program to strengthen the grid.
But the utility is also doing whatever it can to reduce the need for those investments, including currently enrolling large commercial building customers in a demand response program which asks for peak time demand reductions. ConEd will pay up to $500,000 over a three-year period for every MW of reduction a customer or aggregator provides.
And last year state regulators approved a unique demand management program the utility proposed for the boroughs of Brookyn and Queens. Facing growth in the area and staring down the need for a $1.1 billion substation to handle that demand, the utility will spend up to $150 million on energy efficiency initiatives and distributed resources. Ultimately, the goal is to find about 20 MW of energy savings or capacity by early next year.
If successful, the utility will delay having to build the substation until 2024 and customers could see as much as $500 million in savings on their electricity bills.
Last year the utility boosted the incentives available to commercial buildings, significantly raising potential rebates on thermal storage, battery storage, efficient LED lighting and demand response enabling technology.
"We’re a bit unusual as a business in that we actually encourage customers to use less of our products and services," ConEd spokesman Allan Drury said. The utility has paid out $190 million in incentives to 221,000 customers since 2009 for utilizing a range of energy efficiency programs.
Consolidated Edison customers ave also completed 4,000 solar projects, producing 60 MW renewable power. Drury said the utility works with city and state agencies "to make the installation process as smooth as possible," and said they also provided technical support for the creation of the NYC Solar Map, which shows the solar potential of buildings.
Consolidated Edison is the most recent client of EnergyOrbit, but not its largest. Pacific Gas & Electric Co. is the eight year-old company's flagship customer, and according to founder Merhav the company's demand management platform has allowed its customers to avoid building several power plants.
"It really is an oxymoron when you think about it," Merhav said. "Their job was to be out there and to produce more energy and especially with respect to the investor owned utilities, that translates into greater shareholder value. But no more."
"But no more" refers to the changing business model, which is something utilities have struggled with in recent years. A model traditionally built on selling power is now in a state of flux, with utilities seeking ways to profit by selling less. It's a perplexing split even for utility executives: A recent Utility Dive survey simultaneously found executives that see distributed energy as their greatest opportunity, while also ranking stagnant load growth as a significant challenge.
But according to Merhav, when utilities can reliably and predictably manage their load then the revenue streams start to become clear. Consolidated Edison's ability meet efficiency goals while pushing back billions of dollars in investment means savings for both the company, shareholders and customers.
"Whereas in the past utilities were not able to put demand side management on the books as a value add or as a direct impact to the bottom line, now they are mandated to do this," Merhav said. "If they don’t achieve the goals that are mandated by respective regimes they are penalized. If they are a achieving, they are avoiding infrastructure costs, transmission costs, so at the end of the day they come up ahead."
One of the key benefits to a third-party demand management provider is the efficiency and speed with which the platform handles the programs. From conception of a program to cutting that first rebate check, Merhav said his clients report speeding up the process from 65% to 75%. And as utility's work on increasing customer engagement, the faster response time ultimately means a more responsive customer and effective program.
"This project carries special weight in the industry as it squarely reflects the increasingly pervasive view of treating energy efficiency and demand management as a resource on par with new or existing generation, transmission and distribution capabilities," Merhav said.
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