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How can Demand Response help my business?

Many energy consumers see electricity rates depending on an average of electricity costs and bear no connection to real electricity production costs, as they differ over time.

Demand Response (DR) is a system set up to encourage improvements in end-use consumers’ energy consumption in reaction to increases in energy rates over time. It can offer opportunities for lower electricity use in high-market prices circumstances or at times when grid reliability is in question. 

The capacity to respond to energy demand is limited in the United States today. A complete response to demands and capacity to handle loads has fallen by almost one-third since 1996 due to reduced service funding and investment.

The Benefits of Demand Response

Owing to a closer correlation between the energy prices of consumers and the importance they put on energy, the most significant advantage of demand response is enhanced resource-efficiency of electricity production. This improved productivity provides several benefits, which, according to studies can be organized into four groups:

  • Participant financial benefits are the savings in expenses and bonus payments received by customers who adapt their electricity demand to varying times of electricity prices, or services focused on benefits.
  • Market-wide financial rewards represent the lower wholesale market rates determined by the fact that DR prevents the necessity to utilize the most expensive power plants during otherwise high demand periods, driving down production costs and prices for all wholesale purchasers of electricity.

Sustained DR over the longer term reduces overall system capacity requirements, permitting load-serving companies to buy or create fewer new capacity. These savings may eventually be passed as savings on the bills of most retail customers.

  • Reliability benefits underscore the functional security and savings resulted, as DR brings down the probability and consequences of forced blackouts, which would lead to budgetary costs and distress to clients.
  • Market performance benefits relate to the value of DR in alleviating the capability of suppliers to exercise market power by considerably higher power costs than the original production.

How can DR benefit my business?

Did you know that energy rates change throughout the day? Under the supply and demand rules, energy is more costly when everyone utilizes it. 

As soon as summer approaches, due to air conditioning, we can see increased pressure on the electricity grid. Demand from heating, ventilation, and air conditioning can cause the power grids to hit their peaks during especially sizzling summer days, which is the moment when prices skyrocket. 

A failure to prepare for these high demand periods can become a considerable dent in the bottom line for the major energy users. Not only are companies likely to use more electricity to cool buildings themselves at peak hours, but they are also paying substantially more for each kilowatt.

Many businesses are interested in participation, as they can raise their energy costs and trigger new revenue sources. Yet, there could be other benefits.

Some of these benefits entail enhancing the reliability of existing facilities by paying for routine testing of backup generators, improving energy efficiency by real-time monitoring and new technologies, and promoting environmental ambitions. 

You need to understand both your power consumption and business operations to find out what demand response could offer to your company.

For participation, you should collect information about the operational and safety requirements for your business; electricity consumption, current Building Management System, and potentially acceptable assets and who oversees their management.

Demand Response will provide a substantial cost saving to the entire electricity system through successful balancing support. This can be of benefit to the system operator for balancing; network operators for handling local or regional limitations and preventing reinforcement; and suppliers for business risk management.

Businesses suited to Demand Response

  • Industrial manufacturing plants – which could save the slightest energy-intensive systems for peak periods while high-energy generation systems can be shifted to off-peak times.
  • Colleges and Universities  inside various rooms and around different locations, the lighting, heating, and air conditioning could be decreased during high peak times. An example of as such is public areas or offices.
  • Commercial workplaces  quick savings can be made by making sure power control devices are turned on to different systems, such as computers. Furthermore, coffee machines or water dispensers should be turned on only during office hours, which will lead to energy saving.
  • Grocery stores  for a limited period, the amount of energy in cold stores may be well diminished without disrupting business or harming stock.
  • Data centers – can adjust supply-air temperature or humidity setpoints to industry ranges. Furthermore, businesses as such can use innovative cooling system management. However, this is not applicable to data centers already operating at higher temperatures. 
  • Generator backed up businesses – having a backup generator can provide with power whenever the main power is down, ensuring the security system continues to work. A back-up generator is one way of meeting the energy demand in the event something unexpectedly fails.

Who can help me get started?

Demand Response providers can help you engage more easily. You could always request to have a no-commitment conversation and they will perform on-site surveys. Also, it is recommended to speak to someone with a similar company who already provides services for a DR business or research for related case studies.

Lone Star Demand Response is here to serve you at any time.

Contact us and get a quote with just a few clicks.


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