Demand Response Program Unfolded

A huge part of the electricity’s cost comes from a small part of hours throughout the year. Therefore, utilities, electricity grid administrators, and private businesses alike are concerned with providing innovative solutions to those uncommon but considerable electricity costs. One product that has already proven to achieve success is demand response (DR).

How do Demand Response Programs Operate?

Higher temperatures outside indicate that many of us are going to be turning to air-conditioning and different devices to remain cool throughout summers. All this electrically powered cooling places hundreds of Megawatts (MW) of additional demand on the electrical grid which may be a cause for service interruptions. 

That is the main reason why various companies attempt to beat the demand during peak electricity use during the summer with Demand Response programs that encourage consumers to reduce energy consumption during high-demand times on selected days.

As a utility client, it is vital to understand what Demand Response represents for you – and your electricity bill – thus you will be able to act, save, and even win this summer.

Demand Response is a method to decrease demand stress from the electricity grid. Furthermore, by curtailing the demand for electricity throughout peak periods, demand response programs can cut costs as well, since participation reduces the necessity to run high-cost generators. 

The electrical system is extremely capital-intensive, and investments in generation and transmission systems have long lead times and economic lives for many decades.

Such features of electric power systems entail the preparation and maintenance of power grids for years in advance to ensure that the network will function efficiently in real-time given the numerous uncertainties surrounding potential demands, fuel sources, availability of assets, and grid conditions.

These challenges are what make demand response participation so valuable. 

Enrolling in a Demand Response Program

Most energy utilities provide demand response services for energy users to register and earn money in return for reducing their energy consumption, at the request of the utilities during high demand and under-supply periods.

Some simple examples of such reduction processes involve:

  • Turning up the temperature on a thermostat to minimize air conditioning load.
  • Turning off various lights.
  • Moving the time of usage of certain energy-consuming appliances out of peak demand timeframe. 

You might consider that the load reduction by one facility can be low. However, as many other customers engage in these kinds of programs the net result produces a significant reduction in energy demand for the utility in question. 

Additionally, this is a fantastic opportunity for large manufacturers to perform necessary and preventive maintenance at the plant while being paid for not working.

Common Misbeliefs

Participating in DR events implies customers must manually adjust their loads

The advantage of enrolling in DR programs through a commercial service provider is that they can simplify the whole process. If the customer decides to participate in the service, programs will be automated, and the customer will automatically be financially rewarded for attending and participating during events.

Participating in DR events can trigger market disruptions

Generally, the events’ duration is between 2-4 hours and takes place only a few times per year, so business interruption is very limited and offset by compensation.  

For instance, an existing DR partner may help identify a strategy that aligns with your business’ purpose: 

  • It could exclude temperature critical areas within your establishment in the curtailment strategy.
  • It could provide different curtailment approaches that are specific to different areas of your facility.

Registering for DR events includes complex contracts and legal agreements

Agreements between utilities and consumers regarding demand response programs are not at all complex. When customers choose to collaborate with a commercial service provider, they offer permission to utilities to communicate with the partner on their behalf.

By engaging in DR programs, consumers take on a financial burden

Most service systems offered by utilities provide high incentives for participation. Various plans come with standards of success combined with a financial penalty if the performance targets are not achieved.

Another advantage of partnering with an existing provider is that they will absorb much of the financial risk, leaving the customer with a considerable upside value.

Lone Star Demand Response, LLC provider

Lone Star Demand Response, LLC is known as a commercial service provider for ERCOT – this is to say, it approaches and enters contracts with a variety of companies in the service area or electrical region concerned. Following, a combination of these businesses is aggregated into a wide block of curtailable demand, which enhances the effect of the contract portfolio. 

Lone Star Demand Response, LLC focuses on larger, commercial, or industrial electricity consumers, as opposed to residential households. To help make a clearer picture, you would require hundreds maybe thousands of such houses to meet the energy demand of a large industrial customer, so targeting industrial markets is a more feasible business model.

Lone Star Demand Response, LLC is specialized in delivering excellence. Customer human safety and minimizing risks are on the top of company’s priority list. These goals are achieved through hard work, daily load monitoring systems, brilliant customer service which focuses on identifying issues and solving techniques on the spot with no-frills, and integrity. 

Rest assured, as a partner, you will be taken care of and you will benefit from all transparency necessary, such as monthly statements to track your revenue and be always informed and educated. Building trust and a strong partnership is the company’s purpose.

Get a quote today and let us do all the work for you to be a demand response participant.

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