The energy seesaw of supply and demand is a wild ride for both utilities and businesses, as utilities constantly balance customer needs with production capabilities. When an incident or condition disrupts that balance and leaves a forecasted supply deficit, electric grid operators have historically had only two tough options — bring online additional, often costly generation capacity, or neglect to meet demand by instituting blackouts. Demand response represents a third alternative grounded in a more cooperative mentality: providing incentives to customers to cut their demand or to bring on additional grid capacity when the demand for electricity exceeds its existing supply. Demand response frees up or adds to the electrical capacity so that it can continue meeting the needs of other users.

The concept itself is not so complex, but until recently, demand response has had a bit of a PR problem. The term demand response (DR) is still not commonly understood by many residential and commercial customers who can benefit from the energy and cost savings it provides. All users of the electricity grid stand to gain from DR, especially with the rising frequency and duration of costly widespread power outages.

Fortunately, collaborations between utility offerings and intuitive smart energy management devices are demystifying demand response, making the savings benefits easier to understand and tap into for us all.

Demand Response Is Trending

User-friendly, simple devices give facility professionals and homeowners the ability to manage energy use in a smarter way by executing “set it and forget it” participation parameters. According to the 2017 Utility Demand Response Market Snapshot (registration required) from the Smart Electric Power Alliance (SEPA) and Navigant, nearly one million customers have enrolled in smart thermostat programs offered by utilities for easier demand response integration. Beyond those of us in the energy world, this energy management trend is important for its cost- and energy-savings potential and the emissions reduction benefits.

Energy technology is also fueling adoption and new avenues for use. Demand response is on the rise as utilities integrate more distributed energy resources into the grid. SEPA finds almost 30% of utilities are already using demand response programs, and 70% are planning or considering applications. Programs are now deploying energy storage — an increasingly affordable option for end users for demand response which uses participation to buffer the grid from renewable generation variability.

Our digital habits are helping shift demand response to a user-controlled benefit, rather than a backup resource only triggered during emergencies. Residential and business utility customers can opt-in to participate through communication channels we use in our daily lives: 40% of SEPA utility respondents use email to engage with customers, 27% use text messages and 12% utilize social media. The shift to intuitive communication has made demand response programs easier for everyone to understand.

Complex Name, Simple Benefits