You may be hearing catch phrases such as “grid modernization” and “smart grid” as the next big thing in the utility industry. What these all mean is a larger discussion, but one essential component of both is demand response (DR). So, what is demand response and how does it help our utility grid? And, why is it part of the modern grid? To answer this, we have to look at what DR has been and what it’s becoming.
Traditionally, DR programs have been structured to ask customers to reduce their load when the grid was over-stressed – times when a lot of people need electricity. For example, during cold winter days when heaters are running full blast, a utility may ask participating customers to dim their lights or turn off non-essential equipment to reduce the overall load on the grid. This allows the utility to save money (which it then passes along to its customers) by not purchasing expensive power to meet these peak needs. The utility industry, including within the Pacific Northwest, has a long history of this load-shedding demand response.
Demand response will lower the peak system needs by customers reducing loads during these "curtailment" periods
Today, the utility system is more complicated. With the grid including more variable resources like wind turbines and solar power, which produce power only when the wind is blowing or the sun is shining, there can be periods of over-generation of power. Utilities are now starting to use demand response to help balance the customer loads with their generation resources. This type of demand response can include both load shedding as well as load building, depending on the resources available.
In order to help maintain a flat load profile, demand response can move load from peak periods to underused periods
Advances in data analytics allows this balancing to happen on short time scales and in localized areas where the need is greatest, with minimal impact on customers. As a result, the grid runs more efficiently, resulting in a more reliable grid at a lower overall cost.
So how much money can demand response save the Pacific Northwest?
The Council found in the Seventh Power Plan that demand response could result in regional cost savings of $4 billion. The Council has formed a demand response advisory committee to explore how to overcome any barriers to implementing DR within our region. The first meeting is December 1, 2016.