Electricity Companies

Developing Infrastructure to Pursue Voluntary and Active Demand Management Programs

// For a few years now, utilities have been dabbling with ways to help customers engage in their energy consumption habits better so they understand how power is delivered and how much it costs. Smart metering technologies have been part of this picture, but so far, such deployments have been costly and, for the most part, deployed on a small scale. Customers that are “energy geeks” may have installed some sort of device to indicate how much they’re spending on power at any given time, but their numbers have also been small.

The problem is that these approaches tried with residential users have not been able to move the energy consumption needle on a large enough scale. There have been successes here and there in specific areas, but stabilizing the grid will require a much broader type of deployment. The Smart Grid Consumer Collaborative 2012 State of the Consumer Report suggests that “interest in participating in smart grid programs is higher when consumers are given timely access to their energy usage data using channels easy for engagement. Direct and continuous feedback has been shown to be more successful in triggering behavioral changes in energy usage as well as reinforcing consumers’ reason-to-believe in the benefit(s) of the smart meter program.”

The concept seems simple enough and solution providers are now supplying energy efficiency or demand response systems that use a smart thermostat in the home combined with simple smartphone or computer apps designed to keep the user fully informed and in control. Customers provided with a Wiser North America smart thermostat by utilities deploying an energy management program also receive a software app that can be installed on smart phones, tablets, and home computers. That app is the point of engagement with the utility and it serves as the basic building block for a larger home energy efficiency or demand response program. In a matter of seconds, it tells customers what’s going on with the grid, how much electricity costs at the moment, weather forecasts, and if there are any specific messages being broadcast by the utility. The customer can interface with and manage single or multiple cooling systems throughout the residence.

If the utility is moving into a crisis situation, it can send messages to its customers warning that the grid is getting stressed and request that customers cut back. This messaging can be broadcast over a wide area or localized along with a specific problem. Customers can then decide not to run high-demand appliances if they’re at home, or adjust their thermostat via the app from any location. Customers will understand they are reducing use at a time when electricity costs are at their highest. There may be additional incentives provided when responding to such a request.

Usually such programs prove sufficient if customers are effectively educated and motivated with the right kinds of incentives. However some situations may call for more drastic action due to exceptionally high temperatures or a problem causing higher levels of stress in a particular part of the grid. In those cases, the utility can access the thermostat and adjust it directly for some period of time, with permission from customers. Customers will need to understand how this works and understand it as a part of the incentive program. Those that have legitimate needs requiring some sort of exception can be covered. Demand response software platforms, such as the one provided by AutoGrid, can allow a utility very precise control of such active demand management situations.

These efforts obviously depend on having sufficient numbers of customers equipped with smart thermostats and enrolled in the demand management program. The more homes in the program, the better it is for everyone. Incentive programs to encourage participation can include a mix of options:

  • Initial bonus for signing up and installing the apps and thermostat;
  • Flat credit for a defined participation in each demand-event day;
  • Variable credit based on the extent of participation;
  • Credits for reduction of overall usage from historical levels; and,
  • Indications of how much a customer saved simply by dialing back during a high-demand period.

These programs, built carefully and used consistently, can result in lower overall energy use and more stable distribution.


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