Demand response gets more diverse, customer-focused and flexible at PLMA conference | SEPA Skip to content

Demand response gets more diverse, customer-focused and flexible at PLMA conference

When I started working at the Smart Electric Power Alliance (SEPA) in January, one of my first jobs was to figure out how to expand our annual Utility Market Survey to include demand response. Reflecting SEPA’s own expanded mission — that sees demand response as part of a portfolio of distributed energy resources (DERs) — the original goal was to collect enough data to produce a Top 10 list of utility demand response programs, similar to our annual Top 10 list for utility solar.

But, as we designed the survey and started getting back initial responses, a couple of major challenges emerged. First, the term “demand response” — typically associated with summertime air conditioning cycling schemes — has grown to encompass a wide range of programs and technologies. Second, while solar capacity is easily quantified in megawatts, measuring demand response is a bit more slippery, with variations from utility to utility.

Certainly, traditional DR  is not a new concept for utilities that have had customers enrolled in cycling programs for air conditioning and water heaters for the past three decades. But, as with much else in the electric utility industry, demand response is in a period of transition. Those in the field describe the changes going on as the “evolution of demand response,” a phrase I heard repeatedly at the recent conference of the Peak Load Management Alliance (PLMA) in Nashville.

The PLMA, which defines itself as “the voice of demand response practitioners,” has a simple timeline that lays out what’s happening in the field.

Figure 1: The demand response evolution timeline

Source: PLMA
  • DR 1.0 represents the original demand response initiatives in which utilities paged customers to manually change their energy consumption, or leveraged one-way communication load-control devices to modify usage of residential air conditioning units and water heaters. Demand response at this time was predominantly used for emergency events or when wholesale prices were high.
  • DR 2.0 reflects the integration of demand response into wholesale electricity markets and grid operations by providing ancillary services to the grid such as frequency and voltage support, and spinning and non-spinning reserves.
  • DR 3.0 encompasses the evolution of demand response to function as a component in the larger field of DERs, in which electric vehicles, energy storage, and solar photovoltaic can provide services to the grid, for example, in renewable energy integration and distribution congestion management.

Nashville was my first time at a PLMA event, and the sense of evolution — and the excitement it is generating across the sector — was palpable. In particular, I was struck by several key trends now driving change in the field.


Changing demographics

As a newbie, one of the first threads of conference buzz I picked up from veteran PLMA attendees and longtime demand response practitioners was about the event’s changing demographics. PLMA membership has almost tripled in the past four years, from 42 member organizations at the end of 2012, to 123 today; and, the organizers said, conference attendance has doubled since 2014.

The crowd was also younger and more diverse than what one tends to see in the demand response space — I’m Exhibit A, female and Asian American. In addition to the usual suspects — the people on the ground running utility DR programs — I also met a wide range of representatives from technology solution providers, including such increasingly familiar names as Comverge, EnergyHub, Whisker Labs and Nest. These companies, and the new smart thermostat and data analytics markets developing around them, are bringing an increasingly young and tech-savvy crowd into the energy space. A spike in the number of women presenting — myself included — and participating at this year’s conference was also a hot topic at a lunch meeting of PLMA’s Women in Demand Management group.


Customer Engagement

The level of interest and conversation surrounding customer engagement was another thread figuring significantly in conference presentations and conversations. As DR continues to evolve, its purpose is also changing. DR is still aimed at helping reduce peak load, but it is also beginning to act as another form of customer engagement. In the new age of the Internet of Things, demand response programs are increasingly focused on empowering customers with greater choice and control over their energy use.

As reflected in a number of conference presentations, utilities and other industry players are now exploring different avenues to better understand customers and provide more options to increase their engagement and satisfaction with DR programs. For example, a presentation from Public Service Company of Oklahoma delved into the utility’s PowerHours ® DR program, in which customers can opt into direct load control programs via air conditioning and Wi-Fi programmable thermostats. After three years of testing and refining the equipment and processes of the program, the utility found that offering a range of choices and developing targeted marketing channels were the most effective ways to educate and engage customers.


Advancing Technology

Moving along the spectrum toward DR 3.0 means that technology also has to continue advancing. Duke Energy provided an interesting example in a presentation on how it transitioned a DR program from one-way paging to two-way Wi-Fi and cellular systems in partnership with Comverge. This effort was complex, required switching hardware, testing new tools, retraining staff and drumming up support from customers to participate.

Where the technology is heading was reflected in a range of new product offerings from solution providers exhibiting at the conference. Predictive controls, sensing technologies, and platforms for supporting connected home and customer devices were all on display, and utilities provided insights from pilots testing these technologies with their customers.


Bulk power system support

The transition toward DR 3.0 also means DR will play an increasing role on the bulk power system. Indeed, a sizeable chunk of DR is already participating in wholesale electricity markets today, with third-party aggregators playing a significant role.

This trend surfaced at PLMA in presentations discussing insights into pilot studies on utilities’ use of demand response as a non-wires alternative to transmission or distribution infrastructure. For example, in a pilot study in Rhode Island, National Grid was able to leverage smart thermostats and cycle central and window air conditioning units through DR events to relieve stress on two overloaded feeders.

As I noted in my own conference presentation, DR’s move into the bulk power system is one of the key trends emerging from SEPA’s Utility Market Survey this year. Responses from more than 100 utilities indicate that many are beginning to look seriously at DR as a location-specific resource to manage real-time grid conditions and as a non-wires alternative to grid upgrades.

Figure 2: Utility interest grows in bulk power uses of demand response

Source: SEPA

The subtext to this stream of demand response evolution  — at the conference and in the field — is about collaboration. Utilities, solution providers and customers are all involved in the process of change, and all stand to benefit, least of all with a cleaner, more efficient and reliable grid.

Certainly, one of the challenges ahead is developing more unified metrics for evaluating demand response programs. In the end, SEPA put its Top 10 demand response list on hold for this year. But we will be releasing our demand response survey results later this year, and Top 10 utility awards for solar and storage will be announced April 26 at the SEPA Utility Conference in Tucson.

Demand response will also continue to be a focus of SEPA’s research. I, for one, can’t wait to see how things unfold.

Brenda Chew is SEPA’s Research Analyst. She can be reached at [email protected]