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The Intersection of Energy Efficiency and Demand Response – Are we there yet?

Written by: Fiona Dearth

At Waypoint we’re often talking about the benefits of energy efficiency (EE) to utilities and commercial real estate (CRE), but we talk far less frequently about demand response (DR), EE’s close cousin. Part of the reason for this is that EE and DR are, more often than not, treated as very different types of programs by utilities and CRE stakeholders. The intersection of these two has been on our radar for some time now and Waypoint Energy sees this coming from a mile way.

Demand response is becoming a larger and larger player in the efforts to reduce energy consumption in buildings and its interaction with EE isn’t going unnoticed. And logically, it makes total sense. Utilities want to curb their customer usage to avoid turning on peaker power plants and avoid constructing new (very) expensive power plants. When we think about non-wires alternatives (NWA) to increasing utility capacity, both EE and DR come into play.

Traditionally, EE and DR have been at odds with each other; the more reductions in energy usage at a building from energy efficiency measures, the less of a load there is for demand response to shave during peak time periods. Nonetheless, the utility still has a singular overarching goal in mind here. So why are EE and DR so still stove-piped? Why hasn’t integrated demand side management (IDSM) caught on faster?

At the AESP National Conference earlier this year, the session on IDSM showed a range of states’ and utilities’ achievements in delivering peak and electricity savings. In Michigan for example, the Public Service Commission does not allow utilities to combine EE and DR programming – the two programs must remain separate. On the flip side at SoCal Edison, they’ve been integrating EE and DR for years.

Here are some examples of utilities who use EE and DR together successfully:

  • National Grid in Rhode Island - NGrid is avoiding infrastructure investments in a community near the southeast coast of Rhode Island, with a goal of reducing demand by 1MW, using distributed resources, energy efficiency, demand response, and storage to reduce peak load.

  • Consolidated Edison in New York - ConEd is avoiding a $1.2 Billion substation in the Brooklyn/Queens New York City area by funding a holistic mix of demand response, energy efficiency, and renewable energy projects. This includes lighting retrofits in warehouses and multifamily buildings, and peak DR reductions during two daily periods (4pm-8pm and 8pm-Midnight).

Last year at the ACEEE Summer Study, the Northeast Energy Efficiency Partnership (NEEP) took a look at the intersection of EE & DR in IDSM and found this to be a growing trend as well. Central to rolling out IDSM programs nationwide is a strong regulatory structure to support the integration. Furthermore, quantifying the energy savings that utilities can expect to realize, and forecast around, gives regulators and utilities greater certainty to plan for IDSM programs.

Waypoint Energy has seen the writing on the wall and is excited to lead utilities and the CRE industry towards to promised land of demand side management that is IDSM. To put it simply, IDSM is coming. Waypoint Energy is ready. Are you?


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