Top 10 Demand Response Questions You Need Answered

demand-response-questionsWhether you are looking to track your facility’s energy consumption, or seeking a new form of revenue, chances are you have questions about participating in a demand response program. You’ve heard that your business could get paid to temporarily reduce its electric usage, but how exactly does that work? How does your company begin the process? And are the benefits truly worth it? Below you will find the top 10 questions customers have regarding demand response programs. They will teach you how your company can get involved and answer the most common questions that are probably going through your head right now.

10) Why is demand response an effective option for grid stability?

When the electric grid is experiencing high demand, utilities have a couple of options to stabilize it. They can purchase electricity from outside the region, but transmission can be costly; they can start up old “stand-by” power plants, but these are inefficient and harmful to the environment; or they can rely on demand response, where participants are called upon to temporarily reduce their electric consumption to safely and effectively stabilize the grid.

9) What will happen if the utility does not produce enough electricity?

The most obvious result is a blackout, which will leave everyone in the region in complete darkness. To prevent a full blackout, utilities will sometimes reduce voltage until a stockpile of electricity builds up again. This is commonly referred to as a brownout.

8) Why is it so important to avoid blackouts and brownouts?

Blackouts leave everyone without electricity, but brownouts can lead to more serious repercussions. Fluctuations in voltage can be hazardous to businesses, causing serious damage to a facility’s equipment, which can cost thousands of dollars to replace.

7) Who qualifies for a demand response program?

Any business or organization that consumes a considerable amount of energy could participate. In general, the most successful participants include manufacturing facilities, hospitals and healthcare facilities, commercial properties, schools and universities, data centers, large hotels, and shopping centers.

6) When and how often are events called?

Demand response events are generally held in the summer months when everyone is blasting their air conditioning units in an attempt to stay cool. Each year is different and the number of events may vary, but most events will only last a few hours.

5) What are some methods of reduction?

Each facility will have a different reduction plan but some successful methods include running on-site generators, reducing air-conditioning usage, and shutting off lights and large pieces of equipment.

4) How will we be notified to reduce our electricity?

Designated contacts at your business will be notified via telephone message, email, fax, and a personal phone call from the demand response provider you enrolled with. Depending on your location, notifications are sent out 10 minutes to 4 hours in advance.

3) What if we cannot participate in a certain event because it interferes with our facility’s operations?

Different demand response programs will have different requirements during an event. If you enroll in a reputable program, consequences will be minimal. You get paid for what you reduce, so not performing will simply result in no payment.

2) Do we need to install any hardware to participate in demand response?

An interval meter is required to participate, but in most cases, the provider of the program will install it at your facility at no charge.

1) How will my facility benefit from a demand response program?

Participation does require some effort, but financial compensation is certainly worth it. For example, if a plastics manufacturer successfully reduces 1,500 KW when called, that company will receive a payment of roughly $65,000.

Participating in a demand response program can be profitable for your facility. Please visit Energy Curtailment Specialists for further information on how you can participate.

Sarah Battaglia
Energy Curtailment Specialists, Inc.

Sarah can be found on LinkedIn and Google+.

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