What is demand response? I found that most power companies would find clients that would agree to reduce their energy consumption in order to help with peak system demand which results in the stability of grid energy usage and leads to lower market prices.
CPower, a energy company, sees demand response as a energy management strategy which is useful for the company. Essentially it is a win/win situation resulting in a greater revenue and a reduction of energy consumption expenses. The one part about this program that CPower enjoys is the fact that customers who join into the demand response program actually increase the companies bottom line. However, the overall true benefit to this management tool is the environmental impact it has. But some may say how is this true? The answer to that question is the company is lower the carbon dioxide emissions into the air from the power plant including other harmful emissions. By having people not overloading the grid the power plant doesn’t have to work as hard as it would if there was no one reducing their energy usage.
What type of programs are there? CPower uses two types; capacity and price response. Capacity is when participants will sign up in advance to earn a revenue on there bill mostly on a monthly basis for reducing there energy usage in their grid. Price response is the easiest and most common method for a customer and the company to save money, plus it can be combined with the method of capacity. The easiest way to explain the process of price reduction is the more kwatt hour a customer can reduce the more money they can make.
(http://www.cpowered.com/images/chart_drinaction.gif)
The graph below comes from the CPower company that perfectly matches the description of demand response and its outcomes. By having clients sign up to these programs the original load shape(purple graph) is lessened to the demand response shape(Orange graph). The graph shows the different times such as the peak time rounding out around 2pm. In the orange graph the peak time usage doesn’t last as long as the peak time usage of the original usage. Comparing the peak usage, the orange graph is one third the usage as the purple graph. It Works!
(http://www.cpowered.com/images/chart_dailyload.gif)
Nice visuals, and it’s interesting how this company has turned it into a win-win situation for both themselves and their customers.
Hi Jonathan,
I liked how you approached the Demand Response concept bottom-up. It is true DR brings in higher revenues not only in short term, but even in longer one. And it was quite educating to know that there are companies out there, which are trying to follow an environmentally- conscious path which would most definitely be profitable in the future and not merely in monetary terms.
Genta S.