Demand response refers to utility and wholesale market programs that energy customers can participate in to earn money for reducing electricity use during peak times. Demand response is a key resource for maintaining grid reliability and reducing peak electricity prices. But traditionally, it can be challenging to participate. In order to do so, customers must have the flexibility to adjust electricity consumption – flexibility that many customers (especially commercial and industrial) do not have.
Business operations typically follow strict schedules, and curtailing energy use for demand response often requires equipment shutdowns or adjustments in the building that can impact tenant comfort. These drawbacks often prevent energy customers from reaping the benefits of demand response, and limit utilities’ ability to leverage it as a resource.
Energy storage changes all of that. By giving customers the flexibility to reduce their site’s grid demand at critical times – without changing their electricity consumption – energy storage makes demand response participation a lot easier.
This is good news for operations leaders, as utilities across the nation are beginning to further incentivize demand response.
Here are 3 ways common trends impacting demand response in many parts of the U.S. and Canada.
1. Peak hours are getting later
Historically, demand response dispatches occurred during summer afternoons, which were correlated with peak energy use. Today, in states like California, solar generation is meeting load requirements during mid-day. California demand response programs like the Demand Response Auction Mechanism (DRAM) and Critical Peak Pricing (CPP) are more likely to be dispatched in the evening hours, as solar production wanes.
2. Utilities need flexible resources
Demand response used to be an emergency resource that was called only a few times per year, with multiple hours of notice prior to an event. Now, utilities are looking for flexible demand response that can respond quickly and frequently to fluctuating grid conditions. For example, the Massachusetts ConnectedSolutions program is called up to 60 times during the summer.
3. Demand response dispatches are market-driven
Grid operators, like the IESO in Ontario, are tightly integrating demand response into their wholesale markets, which means that demand response dispatches are tied to market prices, and not just based on emergency conditions.
What does this mean for demand response participants? That you need to be ready to respond at all times (even after normal business hours), provide frequent and flexible load reductions, and monitor market pricing in real-time. This may sound complicated, and it is for many customers. Fortunately, energy storage is an ideal resource for maximizing value from today’s demand response programs. Here’s why:
Energy storage is 100% automated
Intelligent energy storage processes demand response notifications and automatically discharges to reduce your load. You don’t need to manually curtail, monitor your demand during the demand response event, or interface with your utility.
Energy storage causes zero disruption
With energy storage, you can participate in demand response without impacting your operations. All load reduction happens in the background via the energy storage system. You don’t have to shut down any processes or risk employee/customer discomfort by adjusting HVAC setpoints. Get paid to reduce your load and keep your business operating.
Energy storage maximizes your flexibility
Energy storage can respond instantaneously, or to a day-ahead notification. It can adjust output on a second-by-second basis, or on a seasonal basis. It can dispatch for five minutes, or up to four hours. Whatever the requirements of a demand response program, energy storage can meet them. As program requirements change over time, energy storage will change operating parameters to meet them.
Energy storage integrates with other resources
Energy storage plays well with others resources at your facility, including traditional manual curtailment. Take advantage of our partnership with CPower, you can combine energy storage with your traditional curtailment strategy to maximize your load reduction – and your revenue – in DR programs.
How Artificial Intelligence maximizes demand response value
The flexibility of energy storage is made possible through Stem’s artificial intelligence platform, Athena. Athena’s Analytics engine forecasts customer load and DR value to optimize the timing of battery charge and discharge. Athena’s robust Edge Platform receives and manages utility dispatch signals from standard communications protocols to automate the storage dispatch. Athena’s Cloud Platform processes and stores measurement data, backed up by a best-in-class program operations team, to manage performance settlement.
Contact us today to learn more about how Stem can help you participate in demand response programs with AI-powered energy storage.