Are you ready to make full use of your facility’s flexible resources for demand response?

Facility and energy managers are generally familiar with demand response programs (DR). These programs, present in many parts of the U.S., offer energy customers financial incentives for dialing back energy use when the power grid is under strain. But do those same facility and energy managers know that they can deploy smart energy technologies to reap even greater benefits from demand response programs? 

Smart energy technology tools infuse more flexibility and efficiency into the way businesses manage their energy. As the Smart Electric Power Alliance described it, the old school approach to reducing energy use and managing demand is like the early “flip phone.” In contrast, demand response powered by today’s smart energy technologies functions more like a modern smartphone. Smart energy tech can automate and multi-task, reducing energy use during peak demand, maximizing the lowest-emitting sources, and better integrating intermittent renewable energy resources like solar and wind. 

Smart technologies have upended and transformed traditional notions about electricity demand and demand response events. The transition to demand response 2.0 is often called demand flexibility, which describes energy consumers’ ability to change how much energy they use at key points — both with advance notice and in real-time response — to save money and advance sustainability goals. 

So, what are the technologies that enable demand flexibility for energy users? In many cases, they are already widely available, affordable, and ready to be integrated into a facility’s demand response capabilities. It’s possible you have already installed some of these but have yet to make the most of their flexibility benefits. Examples of readily available smart technologies include: 

• Peak shaving – voluntary energy use reduction during multiple peak consumption periods
• Smart thermostats 
• Smart building energy management controls 
• Smart and timed air conditioners, water heaters, and other heating systems 
• Electric vehicle chargers 
• Distributed energy resources and backup generators 
• Refrigeration, elevators, and other electric appliances 

Thanks to technology advances like automation and smart sensors, these energy use, and management sources can now boost your arsenal of tools to help better manage your energy consumption. 

The savings and other benefits each business can capture through demand flexibility will vary widely depending on a range of factors, including local energy market design and pricing structures, incentive programs, and the nature of a facility’s operations. The Brattle Group sees the potential for demand flexibility to reduce energy costs by $15 billion per year across the U.S. 

The biggest benefit to the grid comes from a reduced need for new utility-scale generation, transmission, and distribution infrastructure. Businesses that deploy demand flexibility receive immediate benefits in the form of rebates, direct energy cost savings, and revenue from participating in demand response. These businesses also gain greater control over their energy use and may be able to access new ways to earn revenue and actively participate in the market. Options include the possibility of engaging in demand-side management and net metering and acting as a virtual power plant. Businesses could also sell ancillary services — support services to help ensure the reliable flow of energy on the grid, especially during peak periods.

The need to apply a demand flexibility mindset and technologies is increasing. This past winter’s deep freeze brought on by Winter Storm Uri underscores how important it is for customers to have a working relationship with an expert energy partner that rewards them for avoiding electricity usage during scarce times, while also helping them adopt technologies and control curtailment of their energy use, ideally in an automated way.

Now, as facility and energy managers prepare for summer and higher energy use, demand flexibility is again important. In markets like ERCOT that frequently face extreme heat, you can expect calls for demand response. You may already have smart technologies in place that either already are or could be easily and affordably implemented. 

Creating an effective demand response program — one that employs smart tools — requires an understanding of your facility’s mission-critical operations and your energy resources. Answering key questions with the deep analysis offered by an expert advisor will allow you to make the best decisions about what times and days you can participate in demand response when you should avoid dialing back operations, and whether larger investments such as backup generators or energy storage are smart choices for your business. 

As a sophisticated energy partner, NRG brings a depth and breadth of insight to your demand response strategies. We have many tools that can help you manage energy consumption more effectively. If you’re wondering how to use demand flexibility to enhance your energy strategy, let us know. With decades of experience in the wholesale market, more than 4,500 employees, and a proven track record as a demand response provider, we stand ready to help.