Generac Grid Services Blog

Ham and eggs. Abbott and Costello. Batman and Robin. Hey, there are a lot of great duos in the world, and here’s another one: building management systems and automated demand response (DR) designed specifically for small- to medium-sized companies.

What makes this a great combo?

CREATIVE FINANCING OPTIONS OPENS THE DER DOOR TO SMALLER BUSINESS CUSTOMERS

We all know the big guys – large commercial and industrial (C&I) customers – have been able to participate in wholesale markets thought demand-management programs for years. Now, small C&I customers are gaining this opportunity, too.

What gives? The financing.

The National Renewable Energy Lab has a great paper titled Flexibility in 21^st Century Power Systems. The paper addresses three grid requirements to accommodate increasing numbers of variable generation resources like wind and solar energy.

1. The first among those requirements is flexible generation. We need power plants that can run efficiently with a very low output level and ramp rapidly from those deep turn-down rates.
2. We also need flexible transmission to carry power without bottlenecks and facilitate access to a broad range of balancing resources. That’s requirement number two.
3. And, finally, the NREL authors say requirement number three is flexible demand-side resources. Those resources include storage, responsive distributed generation and loads engaged in demand response programs that can support the grid by responding to market signals or direct load control.

Amen to requirement number three.

According to FERC’s most recent "Demand Response and Advanced Metering Assessment," 74 percent of the potential peak reduction in retail demand-management programs comes from C&I customers. That means that the biggest, most valuable energy customers are also the most likely  allies in a demand response initiative.

Demand side management (DSM) is the umbrella term for the various methods that power providers employ to get customers to curb consumption. It’s been around since the 1970s, notes Joseph Eto, a Lawrence Berkeley National Lab researcher who wrote a detailed history of it in 1996. He counts conservation education, energy audits, efficiency freebies, financial assistance and time-based tariffs among the forms of DSM utilities use.

Eto also covers the technological approaches designed to achieve objectives like load shifting, peak reduction and off-peak consumption increases.

Anyone who thinks distributed energy resources (DERs) can’t be used for time-sensitive applications like renewable firming should have a look at this article about how New Brunswick Power was able to do just that. The NB Power project was the first time load management provided renewable firming for a Canadian utility. Serving some 394,000 residential, commercial and industrial customers, NB Power is targeting 40 percent renewable generation by 2020. Firming for these variable energy resources must be in place quickly, and the project described in the article shows how the utility proved that demand-side resources could do the job.