Commercial Real Estate Demand Response: A Key Piece in California’s Efficiency Puzzle

Written by: Fiona Dearth

As California continues to surge towards its ambitious goal for 50% renewable generation by 2030, it’s clear that innovative demand-side management solutions will play a critical role in supporting the state’s transition to a more diverse mix of energy supplies. California currently houses over half of the installed solar capacity of the United States and its electric grid is already feeling the impacts of accommodating distributed energy sources. By balancing electricity demand with the state’s increasingly variable supply, demand response (DR) will give California’s grid the flexibility it needs to support an influx of renewables while still increasing its overall efficiency.

California’s electricity load, represented by the infamous “duck curve,” has become even more pronounced in 2016. Its new profile will mean more steep ramp-ups to bring electricity online quickly during periods of high demand and more spans of oversupply during periods of low demand. By reducing electricity consumption during stretches of high demand, DR makes it possible to “smooth” the load curve, reducing costs and improving reliability across the grid.

Commercial real estate (CRE) properties are particularly well-positioned to participate in utility-sponsored DR programs and in doing so, take an active role in managing their energy usage and costs. Building owners and managers can implement several simple strategies to reduce their building’s load during peak hours to avoid expensive demand charges and receive additional financial incentives for temporarily reducing their electric load. Pacific Gas & Electric, for example, offers a number of opportunities for CRE customers to participate in DR programming and provides financial incentive of $200-400/kW saved during peak load periods.

Examples of DR strategies that can be implemented in commercial buildings include:

  • Reducing lighting levels

  • Limiting elevator usage

  • Increasing room temperature setpoints

  • Widening thermostat deadbands

Thanks to a number of important advances in the use of smart meters, CRE properties are now able to track interval data and reliably reduce electricity load during a DR event. Automated demand response (ADR) systems use these smart building controls to automatically implement the customer’s pre-programmed load reductions. ADR provides a fast and reliable way to respond to peak events, while still leaving the customer in complete control of their electric load reduction strategies. Similarly, demand response management systems (DRMS) allow grid operators to forecast and aggregate these reductions across many properties using two-way communicating devices. They can then dispatch load with greater precision and maximize efficiency across the system, while also integrating the influx of distributed energy resources to the grid.

Waypoint Energy works with a number of California utilities to help CRE customers understand their electricity usage and tailor strategies to maximize energy and money savings, including by drawing upon DR programs as appropriate.  These strategies will be critical with continued advances in smart metering give CRE customers greater control in managing their usage and the proliferation of renewable energy sources raises the stakes for CRE properties to capitalize on savings by shifting their loads.  If you’re interested in learning more or implementing DR measures in your own CRE portfolio, reach out to