National Grid finds an electric approach to natural gas demand response
The company is learning a lot about its new program to reduce gas use at peak times, including the need to sit down with customers and explain the benefits.
New York's Reforming the Energy Vision is helping to fundamentally change the energy marketplace, with utilities looking to solutions that capitalize on untapped flexibility and efficiencies instead of immediately turning to infrastructure solutions.
So far, the primary focus has been on electricity, and National Grid has launched a series of demonstration projects that include microgrids, "dynamic load management," distributed resources and other grid-edge advances. The utility has also proposed gas projects, and in many ways they mirror electric-side concepts.
Among those ideas: Harnessing flexibility.
DR for natural gas
National Grid proposed four natural gas demonstrations and just this month one was recognized by the National Association of Regulatory Utility Commissioners for an "innovation" award. Working with AutoGrid Systems and IPKeys Technologies, the utility rolled out direct load control devices for furnaces, boilers and other gas-fired equipment in facilities, including city agencies, schools and commercial buildings. In other words, demand response for natural gas.
Similar to electricity DR, there was a learning curve for the utility. National Grid discovered the program's target audience wasn't who they thought, and customers have been participating in unexpected ways.
“Customers are starting to get really creative in ways they can shift their peak," said Carlos Nouel, vice president of new energy solutions for National Grid.
National Grid was facing a peak demand that challenged its system — a problem many summer-peaking electric utilities know well. But in New York City and Long Island, the utility faced a potential constraint between 6 a.m. and 9 a.m. during the winter heating season, from Dec. 1 through Feb. 28.
"While the demand for gas is pretty much flat or declining, we do have a lot of customers coming into the system," Nouel said. National Grid already has "aggressive efficiency programs," he said, but “similar to the electric side, you start to have some peaking issues."
Traditionally, the utility would deal with the issue with a temperature control program, but many smaller commercial and industrial customers lack a secondary heating source Nouel told Utility Dive. That made expanding the program difficult, as smaller facilities "don't necessarily have the resources or the budget to have a secondary source for heating, and so for them it really becomes challenging to take advantage of those opportunities,” he said.
Focus on different customers
National Grid's new gas demand response program does not replace the older heating program, but focuses on different customer segments. Monthly savings can run into the thousands, allowing some businesses to save substantially.
"It is an interesting opportunity for customers to make some additional money," Nouel said.
But despite the potential savings, the program got off to a slow start. The utility was using large mailings, "but the reality is, we didn't get much response," Nouel said. So National Grid moved to a face-to-face outreach campaign for the program, and got its next surprise.
"Facilities that have production associated with gas use, we thought they'd be interested," Nouel said. But think about all the laundromats in Brooklyn — if one pauses for a demand response event, its competitors likely do not.
The message from some customers was definitive, Nouel said. "It doesn't matter how much you pay me, I'll never shift my load because it's critical.”
More automation = easier participation
As the utility fine-tuned its marketing, it made sure to focus on the ease of participation. "One of the things we've learned on the electric side: the more automation you can bring to the program, the easier participation will be for customers … if you don't make it easy, a lot of customers will not participate," Nouel said.
The two-way direct control device shuts down the electric side of equipment it is cycling, rather than adding a restriction to the gas flow, helping to avoid costly restart times with gas-fired processes.
AutoGrid Senior Director Shane O’Quinn said the program stands out from other offerings because it avoids blocking gas flows. "Most of the other gas-type DR programs have been based off some interruptible gas-type tariff," he said.
When a demand response event is called — about six per season are anticipated — AutoGrid's system sends a signal to the IPKeys box. "There is no hardware involved that interacts with the gas flow," O'Quinn said.
Because the project is still in the pilot phase, O'Quinn said determining when to call an event happens outside the system, but that could be automated.
“On the electric side, there's been an evolution towards more and more automation,” O'Quinn said, echoing Nouel. "As this progresses, you will see more and more full automation occurring in the gas markets like you do in the electric space."
And much like the electric side, particularly in the plug-and-play Internet of Things world, more connected devices means a more flexible system. "I think a lot of customers on their own are going to come up with new ways for them to actually save energy," Nouel said. It's almost like "crowdsourcing" efficiency. "The more devices customers start to realize they can control, and flex as needed, they will basically have on their side of the fence more control and options in how they participate."
Thus far, National Grid has been unable to entice any production facilities to participate in the gas demand response program. The participating facilities so far are include city agency and education facilities, and the reduction in gas demand is coming almost exclusively from heating.
But Nouel recalls that demand response wasn't always an easy sell in the electric industry either. Capturing flexible industrial gas demand may take more customization.
The mailing blast "failed pretty bad, in all honesty," Nouel said, but the utility talked to customers directly and learned that it needed a new approach.
"This is still a new market," Nouel told Utility Dive. "On the gas side, it's so new that you do need a custom or consultative approach where you sit down with customers and explain what it is. Early on, we'll have to continue that approach to be successful."
O'Quin said he expects to see customer segment "stratification" take place.
"The very large consumers, the ones who are more industrial in nature, that are heavy gas users are going to require a much higher touch in order to convince facility managers to change the way that they consume gas and change their processes," O'Quinn said. Lighter industrial or commercial customers may be an easier sell.
And O'Quinn said he expects more utilities to embrace demand response on the gas side, just as they have done on the electric.
Also similar to the electric side, O'Quinn predicts more gas utilities will begin to face peaking issues and will turn to demand management.
"There are a lot more people looking to get gas for heating," he said. "Everyone needs to find a way similar to the electric side, to maximize the assets in the ground ... while being able to serve new customers that connect to your system."
For utilities with both gas and electric operations, any system constraints may offer new ways to interact with customers.
"The beauty will be, if you are one of those utilities where you have a full overlap between the electric and gas system," O'Quinn said. "You will be able to go with a full package solution that can help you in the summer and then during the winter. ... I think ultimately you'll start to see a lot of that packaging."
Follow Robert Walton on Twitter