What is a Demand Response program?
Utility Incentive Program for Reducing Electricity Use
Demand Response may be a confusing term. It's actually backwards from a consumer's point of view. Here's the short definition:
Demand Response programs offer incentives to electricity users to reduce their power use in RESPONSE to a utility's need for power due to a high, system-wide DEMAND for electricity or emergencies that could affect the transmission grid.
Demand Response programs offer these incentives to users who volunteer to participate by temporarily reducing their electricity usage when demand could outpace supply. These high-demand situations are known by a number of different terms: peak demand day, peak demand event, peak energy event, critical demand event, peak demand period, etc. Utility and energy planners endorse Demand Response programs as fiscally and environmentally responsible ways to respond to peak demand periods.
Some Demand Response programs--like the Peak Energy Agriculture Rewards (PEAR) program—specialize in serving agriculture producers across the following functions:
- Cold Storage
For pumps over 250 horsepower with frequent usage, PEAR provides a suite of free monitoring and control equipment plus cash incentives for participating in peak demand events.
For pumps under 250 horsepower or large pumps with infrequent usage,
PEAR provides our web-to-wireless remote control switch. Participants will also receive cash incentives based upon event participation. Note that pumps must be 75 horsepower or larger to qualify.
Our highly configurable system can monitor and control variables such as, compressors, fans, temperature, humidity, door position and more. It is designed primarilty for substantial loads over 250 horsepower that can be turned down or off for 2 to 4 hours during hot summer afternoons. Our system can also be configured for smaller cold storage facilities with loads under 250 horsepower where simple on/off functionality is enough with the addition of temperature and humidity sensors.
PEAR technology can enhance a wide variety of facilities, including food processing, dehydrators, feed mills, wineries and more. Our engineering team will custom design a system to monitor and control an entire facility or a discrete function to enable you to receive incentives from the PEAR program. The beauty of our system lies in its flexibility to connect to many inputs and outputs.
Here are some other terms that are often associated with Demand Response programs.
Auto-DR - Short for "automated Demand Response," which is a utility term for reducing or shutting down loads automatically through the use of technology, rather than manual switching operations. Utilities often provide communications equipment to monitor and control motors, thus automating the Demand Response process.
California Independent System Operator - A non-profit public benefit corporation charged with operating the majority of California’s high-voltage wholesale power grid. Balancing the demand for electricity with an equal supply of megawatts, the ISO is the impartial link between power plants and the utilities that serve more than 30 million consumers. The ISO provides equal access to the grid for all qualified users and strategically plans for the transmission needs of this vital infrastructure.
Capacity Bidding - A specific type of Demand Response program where a third-party administrator, like PEAR by M2M, serves as an intermediary to enroll utility customers, coordinate participation in peak demand events, and both track and pay incentives.
Critical Peak Demand Periods - Declared by the California Independent System Operator (see above) when an unusually high demand for electricity threatens to impact the operability and reliability of the grid. Power planners and utility personnel are on alert to take actions to ensure the continued availability of affordable power.
Curtailment - Cutting back or eliminating electricity usage.
Discretionary Loads - Electrical loads, such as pumps, compressors and fans, that can be controlled more easily than more static loads, such as lighting, HVAC systems, water or sewage pumps, and other critical facilities.
Load Control - The function of limiting energy usage, often in response to a utility's call for demand reduction to reduce stress on the grid or to avoid a spike in the cost of electricity
Load Shedding - Turning electric loads down or off, generally in response to a notification
Load Shifting - Using electricity at an alternative time, often to avoid higher rates or surcharges, or to take advantage of an incentive program.
Peak Demand - Unusually high electricity usage, generally caused by air conditioning and cooling loads during hot summer afternoons, but sometimes caused by winter heading loads.
Peak Demand Events - A period of time in which utilities issue a call for participating customers to reduce or shut down loads.
Peaker Plants - Often natural gas-fired power plants used to meet short-term demands for electricity.
Renewable Resources - Energy supplies that come from natural resources such as sunlight, wind, rain, runoff, tides, and geothermal heat, which are renewable and naturally replenished.
Service Point - An electrical device that draws power where a meter keeps track of electricity usage over time.
Smart Grid - An electricity network incorporating digital technology for better information exchange and control. A smart grid delivers electricity from suppliers to consumers using two-way digital communications to control appliances at consumers' homes and businesses. This saves energy, reduces costs and increases reliability and transparency. It overlays the ordinary electrical grid with an information and net metering system, which includes smart meters. Smart grids are being promoted by many governments as a way of addressing energy independence, climate change and emergency resilience issues. (Definition based on Wikipedia. See www.wikipedia.com)
Smart Meter - Improved devices that replace older, mechanical meters to record power consumption in 15-minute intervals. These meters communicate back to the utility for monitoring and billing purposes. Smart meters enable two-way communication between the meter and the central system. Unlike home energy monitors, smart meters can gather data for remote reporting through the Internet.
Time-of-Use Pricing - Utility pricing for electricity based upon the actual cost to produce and deliver the power during a specific day and time. Based upon the premise that consumers should pay for power according to prevailing market rates. Power is generally more expensive when demand is high.