Demand response programs are available in many areas of the country and provide a means for energy users to earn revenue by curtailing some or all of their electric load during times when the local grid is flowing at maximum capacity. Demand response also allows the utility companies to defray building new power plants if enough customers are prepared to reduce load when needed. Demand response relies on those who can quickly reduce their energy usage to ensure that the entirety of the grid can have uninterrupted power.
Curtailment Service Provider
In order to participate in a demand response program a customer must retain a certified Curtailment Service Provider (CSP) to coordinate activities with the grid operators. A CSP will help a client identify non-essential loads that can be turned off or turned down for brief periods of time when called upon. The CSP will also provide advanced notice of when a curtailment request is likely to be made. Following the curtailment, the CSP works with the grid operator to identify how much power was reduced by the customer, what the prevailing rates for electricity were during that time and how much of a check they are owed.
There are different kinds of demand response programs and all involve revenue paid to clients who can control their energy consumption. However it is important to choose the one that best fits your energy needs and curtailment capabilities. The two major categories are:
Emergency Demand Response - This is considered a mandatory commitment to reduce or cap energy usage by an agreed upon amount when the grid reports a supply shortage or emergency conditions. Under this arrangement the client agrees to answer when called up or will be charged penalties for failing to do so.
Economic Demand Response - This is considered a voluntary commitment to reduce load when wholesale electric prices reach a certain level. At this point it is more cost effective for the grid to call on demand response clients and pay them for their service than to turn on higher-priced power plants.
Participants in demand response must be able to make a sufficient reduction in their load (typically at least 300 kW) in order to earn revenue from the grid. The best candidates are those who can shift the time of their usage or those with backup or co-generation (for example a combined heat and power systems (CHP)). Those who are able to participate in demand response programs provide a great service by helping minimize outages and maintaining the reliability of our energy grid.
As a Certified CSP in the PJM marketplace, Independent Energy Consultants is proud to offer demand response as yet another way to help our clients save or earn money from their energy consumption. If you would like to participate in a demand response program in 2014 the deadline to do so is fast approaching. Call us at 1-888-862-6060 to learn more.