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Editor's note: Earlier this month Kevin Klustner and Todd Greenwalt of Powerit Solutions wrote an opinion piece for Smart Grid News questioning whether demand response can scale to the height of its hype. Today John Rossi, Senior Vice President for Corporate Strategy at Comverge, presents a very different perspective.

 

By John Rossi

 

Many people tend to think about the smart grid from their own frame of reference, and with something so large and complex, it can be difficult to take a holistic view. Still, it is only when everything is working together, from supply and demand-side technologies to energy policy and consumer education, that we will be able to achieve the goal of a more reliable and efficient grid.

 

This interconnectedness is also true of the demand response industry. At the core of demand response is the goal of optimizing energy usage by helping utilities, grid operators and commercial and industrial organizations better manage peak demand. Demand response control events might only happen a few days each year, but the ability to curtail demand at the touch of a button and avoid both costly power outages and peaking generation is what makes demand response such a critical part of the global energy mix.

 

Given the importance of a holistic approach, we were surprised to read the recent story on SmartGridNews.com that doubted that demand response can scale and questioned whether commercial and residential loads were worth trying to reduce through demand management programs.  The authors raised some valid points, including highlighting the important role that automated demand response will increasingly play, but too swiftly dismissed the role that commercial and residential customers can play in curtailing peak demand. In our view, industrial demand response is not the standalone solution that the article suggests it may be, especially since much of the industrial load is not and never will be remotely controllable since it is process critical and hence not interruptible at any arbitrary time.

 

As noted by Doug Houseman of EnerNex in the comments section of the article, “Let us not get into the rut of the "Right Way" to do demand response, please. There are many program types; they can all work in the right setting with the right incentives.”

The numbers make the case

To make their argument, the article authors argued that the commercial and residential sectors offer a negligible amount of untapped reserves and is often a manual process. We strongly disagree. This summer alone, the Comverge team delivered 32 gigawatt hours of reduced electricity demand through automated control events that reduced load at residential and commercial customers as well as at our many industrial customers.

 

These numbers make a strong case for engaging all demand-side resources, including those in the commercial and residential areas, to reduce load. Figures on the amount of energy that those two customer classes consume are equally illustrative. According to the U.S. Census Bureau, residential customers consume 22.2% of energy in the U.S. and commercial customers consume 18.2%. Together these comprise 40.4% —close to half of all energy consumed, and outweighing industrial at 30.1%. Further, when you factor in that residential air conditioning is often the primary driver of peak demand (and that managing this is the key role of demand response), it becomes evident that these two sectors are pivotal players in the mix. Additionally, the massive investments in advanced metering infrastructure (AMI) were justified in large measure based on the promise of price-responsive programs that could now be targeted at smaller customers, since granular metering has long been available at the industrial level.

 

The article authors advance their argument about the impossibility of scaling the demand response system by also noting that residential and commercial customers are “challenging to sign up.” We couldn’t agree more. That’s one of the enduring challenges of the industry and one reason that Comverge strongly emphasizes customer engagement in our approach to demand response programs. By using the appropriate channels, it is possible to enroll residential customers in demand response programs at a scale that adds up to significant load. With a million enrollments and more than five and a half million energy management devices deployed in the field, Comverge has proven that residential and commercial demand response can scale to deliver real results – not hype – and that it should be considered as part of all demand-side management initiatives.

 

John Rossi co-founded Comverge, Inc. in 1997 and is responsible for the company's strategic direction. Rossi has held a number of senior management positions within Comverge, including most recently, Vice President of Engineering. Prior to joining Comverge, Mr. Rossi spent 25 years at Bell Laboratories, the research and development arm of AT&T and later Lucent Technologies.

 

More from our demand response channel…

DR on the upswing, but dynamic pricing? We're not so sure

Further proof AutoDR is fast becoming a reality

A better way to do demand response? IBM's Swiss pilot may show the way

Talk Back to the Author

Current Comments (4)

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There *is* huge DR potential for the commercial market

John, I absolutely agree with you that there *is* significant DR potential in the commercial sector. IMHO, it's a matter of providing solutions that are not only cost effective, but more importantly, simple enough -- and dare I say it -- completely hands-free. IMHO, conventional building control systems have overshot the ability for all but the most sophisticated customers in terms of complexity, thereby preventing those customers from engaging in additional load management strategies, such as DR. On the other end of the spectrum, there exist vast numbers of commercial property operators who have nothing but programmable thermostats. Providing a DR solution (with EE benefits to boot, such as our products) that's simple enough for them to accept without the need for training and hands-on management is the only way we'll access that "huge ocean" of load just waiting to be curtailed. :-)

Mark Kerbel, REGEN Energy - 11/29/2012 - 08:22

"All of the above" strategy for DR

John makes excellent points. There are many types of DR programs - load control, dynamic pricing, peak time rebates, smart thermostats, etc. - and many types of customers. In many places, e.g. California and Texas, the residential and small business peak demand is well over 50% of the peak demand - and is the vast majority of the difference between average demand and peak demand on the hottest days. And voluntary opt-in rates reach 40% for mature, well-run programs (e.g. Arizona Public Service and Salt River Project). Here is just one of over a hundred papers documenting the huge benefits of mass market demand response programs: http://www.brattle.com/_documents/UploadLibrary/Upload1097.pdf

Chris King - 11/30/2012 - 09:37

Broaden the scope to get beyond the hype

John, at BPL Global, we agree that today’s DR industry and next generation systems are indeed scalable. We would go further. Demand management is expanding beyond peak load reduction for use as an operational resource. Limiting DR to curtailing demand to avoid both power outages and peaking generation misses a bigger opportunity for utilities and their customers. Solutions are evolving to provide greater program flexibility for participants as well as a broader spectrum of uses including operational emergency curtailment, ancillary services and peak load shifting. Demand management also becomes more useful when it can be managed in coordination with other supply side distributed energy resources (DER) such as renewable and distributed generation and energy storage. DR models are also evolving for EV charging. As an operational resource for utilities, visibility into the characteristics of the load is critical. A system capable of knowing the location of a managed load on the grid, situational load reduction capacity and curtailment response time in addition to measuring and verifying the actual load reduction significantly enhances the value of load management. Utility planning-level decisions should drive location and the type of customer to enroll in a demand management program to derive the greatest operational value. With today’s next generation technology, utilities can create more value for themselves and their customers by utilizing all that the latest DR systems can offer to offset the addition of peak generation and upgrading of distribution circuits. We agree that demand response will exceed the hype by expanding its flexibility for customer programs and uses for utilities.

Steve Jennings, BPL Global - 11/30/2012 - 13:18

Nice work John...

Excellent article. Excellent insight John. I'm glad SOMEONE is paying attention to this. It was only a matter of time. Thanks for all your effort in making that time come sooner rather than later. After all, it's only 'energy' we're talking about here... Jeff Daily

Jeff Daily - 12/05/2012 - 19:35

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