This is how you get consumers to do demand response
What's the best way to get consumers to do demand response?
Here's a hint: Don't make it about demand response.
While energy efficiency and demand response have typically meant vastly different things behind the meter, they mean the same thing to customers—cost savings.
“No one—if they thought about it—would go one day to customer Joe to talk about energy efficiency and then come back the next to talk about demand response,” Dan Delurey, executive director for the Association for Demand Response and Smart Grid (ADS), told Utility Dive.
"The customers don't really distinguish between the two," EnerNOC VP of Utility Solutions Brad Davids told Utility Dive. "We're hearing from a lot of utilities [...] that they're interested in integrating those two activities."
It makes sense for utilities to get customers to reduce their load when grid reliability is threatened, but it makes little sense for customers. Why would they save money for the five to ten critical peak days that matter to utilities, when they could be saving money everyday when it matters to them?
So, if you're wondering how to convince energy consumers big and small to do demand response, here's your answer—integrate demand response and energy efficiency.
This is precisely the strategy being taken up by NV Energy, the Nevada utility that's in the process of being acquired by Warren Buffett's MidAmerican Holdings, and BuildingIQ, the energy management software-as-a-service provider who raised $9 million in venture capital from investors such as Siemens and Schneider Electric earlier this year.
NV Energy told BuildingIQ it could bring its intelligent efficiency software to big commercial customers like the Las Vegas casinos if—and only if—it convinced them to participate in demand response.
By introducing demand response and energy efficiency as a singular concept, BuildingIQ persuaded utility customers whose energy usage is essential to their business that its software would save them energy and money "without disruption to comfort or operations," according to a press release.
The company's "integrated energy efficiency and automated demand response solution" reduced usage by 10% to 18% simply by "automatically fine tun[ing]" the air conditioning systems that drive consumers' energy costs through the roof and suck the power grid dry in the hot summer months.
According to BuildingIQ's website, "the solution continuously monitors inputs including weather, occupancy, energy prices and demand response events. Based on those inputs, it runs thousands of computations to arrive at the most efficient HVAC operating strategy for the next 24 hours. It makes small changes in temperature and pressure that result in large HVAC savings."
NV Energy has enrolled 12 megawatts in their pilot demand response program so far, is targeting another 10 MW by next summer and is looking to get 75 MW by 2016. In the first year, participating customers dropped their HVAC consumption by 12% to 20% during demand response events.
The trick is that customers don't notice the load reduction while reaping cost savings and the utility gets another demand-side resource.
“By burying [demand response] into energy efficiency, everybody really participates,” Michael Nark, president and CEO of BuildingIQ, told Greentech Media.