The number one reason to appreciate demand response
Today, we’re taking the time to appreciate the work that thousands of participants in our PowerPay Demand Response Programs are doing. Call it a “feel-good-Friday”, I think it’s a sentiment worth sharing. With climate change becoming a part of our everyday conversations, and a winter that’s been brutal for a lot of the East Coast, it seems like a good opportunity to focus on the positive. Businesses across the continent are taking steps to become leaders in responsible energy management, and we think that deserves some recognition. Demand response (DR) is simple enough; customers curtail their energy usage to take stress off the power grid and get paid for it. This is cheaper (and greener) than firing up a pollution-spewing peaking plant, and it prevents costly blackouts.
As consumers we expect our products to be supplied to us adequately and on-demand (pun intended). Demand response is so intriguing because it solves the problem of inadequate electricity supply by modifying consumer behavior, not ramping up energy production. In almost no other market segment do we expect to solve shortages and price hikes by modifying consumer behavior (a method called demand side management or DSM). For example, gas prices have been on a roller coaster for years, but I have yet to receive a check from an oil company thanking me for taking the bus.
So why is demand response so successful? Electricity is certainly a necessity for businesses in the United States, and still many companies are willing to standby and reduce power when called. Which makes me think that for many participants, it must be more than just the payout.
Economically, even without compensating participants, demand response makes sense. Most businesses would lose a significant amount of money in production and labor if power were to go out. By responding to high demand, companies might need to curtail a few processes or ancillary equipment, but power stays on, and the revenue lost is significantly less, if at all. More importantly, DR ensures electricity stays on for all consumers. Business’ reduction can mean that a residence with young children can keep its air conditioning running on the hottest day of the year; it can mean a nursing home is able to continue to heat the facility on the coldest day of the year; and it can mean water sanitation facilities continue to operate in extreme weather – ensuring the community has access to clean water.
DR is a way for large energy users to give back to the community and the environment. Companies that typically use a lot of electricity are also contributing to the greenhouse gas emissions that supply the electricity. When companies curtail, they take some of those emissions out of the equation by preventing the need for peaking plants. Additionally, our Green Roots Initiative means that for every business we enroll, ten trees are planted by the Arbor Day Foundation to keep our national forests alive for future generations. By participating in DR, companies are socially responsible AND they get paid; it’s a win-win situation.
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