As utilities and grid operators face new flexibility challenges, demand response is more important than ever. Applications for demand-side resources are evolving as a result.

There are a handful of themes emerging from the industry worth exploring: a strong focus on customer engagement; a growing array of demand response resources; an increased focus on non-wires alternatives to infrastructure; and the slow progress when turning pilots into commercial programs.

A community of thought leaders, utilities, consultants and vendors in demand response came together last week at the Peak Load Management Alliance conference last week to talk through some of those themes. Below, we offer some insight into how different players are grappling with them.

Success through customer engagement

Utilities have traditionally designed programs based on available technology, but customers are demanding more focus on solutions. Utilities attending the PLMA conference emphasized that customer engagement is critical for successful program deployment, with a big push on marketing for customer acquisition and retention.

PowerHours, a bring-your-own-thermostat program developed by AEP Public Service of Oklahoma (PSO), is an example of the evolution from pilot to program.

The program began in 2012 when the utility sought to create an approach that could leverage its advanced metering infrastructure deployment. The program has been in full implementation since 2014 and owes much of its success to its third-party program manager, Honeywell, and its marketing efforts across various media outlets, including TV, radio, email and social media.

According to PSO, community-focused messaging with an emphasis on environmental benefits acted as a catalyst for customer enrollment. That sentiment was echoed by several utilities throughout the conference. For successful program implementation, PSO recommended two strategies: First, as needed, adjust your marketing strategy on the fly, and second, ensure the program is easy to understand.

Diversification of DERs for demand response

Other participants highlighted emerging use cases for battery storage and thermal storage, which can stand alone or pair with other distributed energy resources to maximize value.

Steele-Waseca Cooperative Electric illustrated the successful marriage between the co-op’s community solar program and Great River Energy's electric-thermal storage water heater program. The resulting community solar program, the Sunna Project, allows members to subscribe to one 410-watt solar panel from tenKsolar for $170 while the member participates in the electric thermal storage water heater program, via which they can receive a free water heater.

The program has contributed to reducing coincident peak charges for the co-op, with thermal storage capacity contribution exceeding that of the solar generation.

In Tennessee Valley Authority territory, Glasgow Electric Plant Board’s residential customers received 165 customer-sited energy storage systems from Sunverge, 345 GE hot water heaters and ecobee smart thermostats. By connecting the batteries, thermostats and hot water heaters to Electric Plant Board’s broadband, the utility has been able to remotely manage demand increases. Batteries are charged during times of low demand and discharged when usage is high. Water heaters are preheated prior to time periods when high demand is forecasted, and thermostats dynamically adjust during summer months.

With this initiative, Glasgow Electric Power Board wanted to flatten load and influence customer behavior to address and lower its system-level coincident peak demand charges. Forecasting the coincident peak has proven to be both the biggest challenge and the biggest opportunity for the project -- one that many utilities are grappling with when eyeing new demand response value streams.

The multitude of storage options range in cost, performance and capabilities for key applications. Ice Energy’s CEO pointed out that the company's thermal storage battery solution for commercial and industrial customers is half the cost of a lithium-ion battery, and its residential product is even more cost-effective.

Non-wires alternatives (NWA): Straight outta Nashville

Utilities have traditionally applied demand response as a systemwide resource, but more recent solutions focus on the unique needs of different systems. For the past decade, Central Hudson has seen declining system peak load, rendering the case for system-wide demand response moot. However, because of persistent load growth on certain feeders, the utility opted for a targeted demand response solution as an alternative to infrastructure upgrades.

Partnering with Comverge, the utility developed its turnkey "Peak Perks" NWA with a goal to defer 16 megawatts of capacity by 2019. Digging deep to find capacity in the right locations starting in April 2016, to date the project has hit and even exceeded its milestones for leveraging flexibility from both residential and commercial and industrial customers.

National Grid’s Rhode DemandLink pilot is seeking 1 megawatt of load relief by 2018 through a combination of energy efficiency and demand response. The pilot has been underway since 2012 and will run through 2017.

The program’s key challenge is the demand variability of vacation homes, which are seasonally occupied. Targeted energy-efficiency measures have reduced the total available load to drop during a demand response event. Through its program, National Grid has increased customer participation by troubleshooting data problems, improving event design and optimizing technology choices. Although the program is on target to meet its capacity requirements, it did have to issue an additional RFP for 2017 for 250 kilowatts of load relief.

Approaches to targeted demand response vary from one utility to the next; however, utility programs often use NWAs to buy time and re-evaluate whether upgrades are absolutely necessary. The ideal situation is to fully defer the investment, but there is a lot of uncertainty about the final outcome of these projects. Utilities are relying more on the market to provide solutions in a timely manner.

However, a tension exists in the market: Vendors are seeking out higher-volume procurements than the limited number of pilot and demonstration NWA projects are delivering today.

Key takeaways

Demand response is shifting away from systemwide implementation with one-off events toward resources that provide targeted solutions for everyday grid operations. The demand-response resource mix is changing, and the way utilities procure these resources is changing.

The only problem is scale. Currently, pilots are leading this paradigm shift. The vendor community strongly desires comprehensive, long-term contracts, but utilities often seek targeted, turnkey solutions from the market rather than systemwide implementations. It could be a while before those systemwide implementations materialize.


Elta presented at the Insight From Leading-Edge Demand Response Research panel at the conference. Get her presentation here.