Written by: Marta Schantz
Since Waypoint Energy is often in the energy efficiency role for utility demand side management programs, we’re usually focused on kWh: the amount of energy a commercial real estate property uses over a period of time. And that’s what property managers see when they look at their utility bill, right? Well, partially.
What they also see is a demand charge. Not only do utilities charge a certain $/kWh for a customer’s energy usage, they also charge a certain amount for overall energy demand – the kW. This demand charge, if a building’s peak demand is especially large, can add up to a hefty sum. In the mainstream sustainability world, most people talk in kWh… Waypoint Energy is here to remind you not to forget the kW.
Utilities are starting to focus more and more attention to customer demand (kW) via demand response programs, and there’s a reason for that – customers are using a lot of energy during peak demand periods, and utilities don’t want to run short on the supply capacity available to meet that need. Pacific Gas & Electric, the utility for Waypoint’s headquarters in San Francisco, offers multiple demand response program options for businesses to leverage. And it’s not just in San Francisco - ComEd in the Midwest has a demand response program for its commercial & industrial customers, as does Duke Energy for its business customers in the South.
Odds are – pick any utility, and it probably has a program to encourage customers to curb their peak demand usage. Dominion Energy Solutions VP Kathryn Curtis states the value proposition to utilities for demand response quite well:
Customer participation in demand response programs improves grid system reliability, mitigates price spikes and enables businesses to respond to wholesale price signals. A well-designed demand response program can help the power grid avoid rolling brownouts, and also generate revenue for businesses.
Earlier this year Waypoint wrote a blog about ways commercial real estate properties can reduce their peak demand (check it out here). Though as the adage always goes – you can’t manage what you don’t measure. Luckily the market is picking up on that. Buildings have plenty of options for benchmarking, tracking, and managing their overall energy usage (kWh), but there haven’t been as many opportunities to parallel that for demand (kW).
Electric Demand (kW) – the highest measured rate of electricity use on each bill
Electric Demand Cost ($) – the cost charged for electric demand on each bill (a subset of the bill’s total electricity cost)
Waypoint Energy is passionate about reducing the energy consumption in commercial buildings, and energy efficiency is a logical pathway to do so. With more and more emphasis on making the business case for energy efficiency, there’s dollars and sense in shaving the peak demand of buildings as well. No matter what your role is in the market, it’s about time you started paying more attention to your demand (kW). If you’re interested in learning more about taking advantage of utility incentives through demand response programs, or want more details on tactics to reduce peak demand in your office building, reach out to us at email@example.com.