Demand Response – The First Key to Improve Energy Efficiency
Source from “Energy Efficiency Road Map”, Bonneville Power Administration
Introduction
“Energy Efficiency Road Map”, published by Bonneville Power Administration (BPA) is a technology roadmap that analyzes the energy efficiency and distribution of resources. This document focused on energy use in residential and commercial sectors, and regionally, on the impacts in Pacific Northwest. The document is aiming for RD&D (Research and Development + Delivery) of BPA’s work to make sure resources of BPA are correctly and efficiently used for energy businesses.
Demand Response – Overview
Demand Response (DR) is one of eight most prioritized energy efficiency criteria posed by BPA. DR is “a method of using technology and incentives to reduce energy loss in the residential sector to prevent wasting energy at the time of peak use and high wholesale market prices.” By improving the level of DR, reduction in energy loss is expected. DR approaches to the efficient energy supply by reviewing demand exchange, distributed generation, energy storage and direct load control of energy needs. DR uses various technologies to expand the energy capacity of electrical system.
Three Approaches of Demand Response
Demand response technology has three main ways to reduce energy loss: voluntary demand reduction, direct load control and distributed generation.
Voluntary demand response is a method of reducing energy overuse by offering consumers incentives to voluntarily reduce their electric loads at system peaks. Voluntary DR uses Demand Exchange (DEMX) system which offers demand reduction to ordinary consumers via the Internet.
Direct Load Control (DLC) involves a utility-controlled appliance at a customer site. Examples of possible DLC energy source are air-conditioner or winter heat appliances in the residential sector.
Distributed generation (DG) is the alternative back-up generators used when peaking resources are needed. Natural gas is preferably used to lower the fuel costs and reduce the environmental effect by polluted gas.
Challenges of Demand Response
Challenges of DR are diverse. First, it is very hard to find a customer who agrees to use their home appliances for researching. Another hurdle is that many of BPA’s energy providers give an incentive to end users for higher electricity use. It is natural that firms try to maximize their profit and do not consider the external negative effects. It is very important to save energy use for the conservation of the environment, but this is contrary to the nature of firms. Still there is another hurdle and that is implementing DR would force “market-based” rates on the basis of taxation.
Contributions on Demand Response by BPA
DR offers benefits to both utilities and consumers. Example benefits brought by DR are increased electric system reliability and reduced price volatility.
DR programs are actually practiced around the U.S. BPA successfully demonstrated the Demand Exchange system during the 2000-2001 West Coast energy crisis. It saved $1.9 million by purchasing DR instead of purchasing from the profit-seeking private sector. Moreover there are many example of DR used in organizations in the U.S.
Future goals of Demand Response
As BPA’s future role BPA is expected to continue its research and evaluation on using DR techniques by paying special attention to the implications of dealing with utility customers and contracting and field installation logistics. Also regional experimentation of the DR program across the U.S. is expected.
BPA’s DR goals are to reduce costs, defer transmission investments and safeguard the region’s resources. BPA is focusing on reducing winter peak in constrained areas, providing energy in dry years, stabilizing market prices at peak seasons and stable economic distribution.
Demand Response Technology video from California Energy Commission
