Dive Brief:
- A “representative” utility in the Southwest Power Pool could unlock an additional 90 MW of demand-side capacity in 2030 by stacking demand response, energy efficiency and time-of-use rates, according to a new Brattle Group report prepared for Uplight.
- Brattle said the approach, called the “demand stack,” is a repeatable and customizable strategy to increase near-term demand response capability and lay the groundwork for more expansive efforts in the longer run. Although the group’s analysis focused on an SPP utility, the findings are applicable across geographies, Brattle said.
- “Enrollment-focused strategies” such as one-click enrollment and personalized multi-channel engagement are key to enrolling customers in demand stack programs, Brattle said. For its representative SPP utility, enrollment-focused strategies can deliver up to 53 MW of incremental demand response capability, the report found.
Dive Insight:
“The Demand Stack: An Assessment of the Benefits” is the latest Brattle report to explore how utilities can deploy demand-side solutions to serve new loads, reduce power bottlenecks and mitigate capital costs that would typically be passed through to ratepayers.
In a separate report prepared for the Utilize Coalition earlier this year, Brattle said an approach that combines demand-side strategies like managed EV charging and distributed batteries with other load management tools and strategic interconnection of new loads could save customers of U.S. vertically integrated utilities up to $170 billion over 10 years. Its modeling assumed a 10% increase in grid utilization during that time.
To utilize demand-side capabilities more effectively and ensure they contribute meaningfully to accredited capacity, utilities need to reimagine them “as part of the grid’s core infrastructure” and find ways to keep participating customers engaged, Hannah Bascom, general manager of Uplight, said in a statement.
“Demand-side capacity becomes more scalable and dependable when customers enroll easily, stay engaged and participate when the grid needs them,” Bascom said.
The report Brattle prepared for Uplight examined six strategies it said could significantly increase demand-side capabilities over the next four years. Four focus on utility customers themselves: “point-of-sale” enrollment that signs up customers for demand response programs by default when they purchase eligible equipment; improving the customer experience during demand response events; engaging customers more deeply with resources like home energy reports; and marketing tools like customer referral programs.
Collectively, Brattle found those strategies boosted the representative SPP utility’s demand-side capability by 66 MW. Two other strategies — improved forecasting and staggered asset dispatch — added another 23 MW. The combined benefit is about 5% of total system load, up from 3% in a “status quo” scenario.
Brattle’s report advises utilities to incorporate lessons from any pilot-level work being done on the demand stack into scaled programs that can unlock meaningful capacity. As that happens, it may make sense for utilities to shift from managing programs individually to portfolio-level management that incorporates “clear system-level performance targets” and “interactive effects across programs as technology adoption and utility offerings increase,” it said.
But even as demand response programming grows, utilities should continue to focus on high-value strategies like outreach efforts targeted to customers with the greatest peak reduction potential, Brattle said.
The framework outlined in the report is “broadly applicable” outside SPP, from regions experiencing rapid load growth — where demand-side portfolios can provide near-term capacity — to areas with high renewable penetration or adoption of electrified technologies, where it can manage ramps, price volatility and demand peaks, Brattle said.
The report acknowledged that efforts to scale demand-side programs may face local or regional regulatory and market barriers not included in its scope. For example, the study assumes that behind-the-meter batteries receive compensation for exporting energy to the grid, which may not be true everywhere, Brattle said
