Demand Response

What is Demand Side Response?

Demand Side Response (DSR), also called Demand Response (DR), is an energy flexibility program that incentivizes electricity users to change their electricity consumption in response to a signal from an energy provider. Demand Response is a tool for moderating demand that falls under the broader umbrella of Demand Side Management.

There are many types of Demand Response programs for consumers and businesses, ranging from direct compensation-based programs to savings-based programs.

Participants are rewarded for their willingness to be flexible in their energy use in response to grid conditions when demand peaks, while utilities gain a more reliable grid, avoid outages, and defer investments in additional generation capacity. With global electricity demand expected to grow more than 3.5% per year, demand flexibility could unlock significant capacity while improving grid efficiency at a cost up to three times lower than building new generation capabilities.

What is the purpose of Demand Side Response?

Demand Side Response programs typically focus on reducing electricity consumption during peak demand periods or in response to weather conditions that stress the grid, such as hot summer days or cold winter times, by increasing demand for cooling or heating.

The goal is to reduce demand for electricity to prevent outages and damage to grid infrastructure, or to avoid having to bring additional peaking generation resources online. However, with the growth in renewable energy sources, utilities are exploring demand flexibility to increase consumption when solar or wind energy is abundant.

What is a Demand Response event?

When a utility or grid operator anticipates that energy demand will exceed energy supply, it will declare a DR event and directly ask participants to reduce their energy demand during specified hours. Alternatively, a utility can designate a peak time during which customers are asked to reduce energy use. Typically, peak hours are in the late afternoon and early evening (4 pm to 9 pm) when people get home from work, cool or heat their homes, use appliances, and charge electric vehicles (EVs).

What incentives are customers offered to participate in Demand Response program?

Incentives for reducing energy use can take many forms. Utilities may pay customers directly or through billing credits for kilowatt-hours (kWh) saved. Or, they may employ time-of-use (TOU) pricing, charging sometimes significantly higher prices for electricity consumed during peak hours, to incentivize customers to defer energy use to off-peak hours.

What is the difference between active and passive Demand Response?

• Active Demand Response programs require the participants to take manual steps to reduce energy use in response to a DR event declared by the utility.
• Passive Demand Response, also known as Automated Demand Response (ADR), occurs automatically, without customer intervention, using smart or connected technology that can be programmed or adjusted by the utility or the aggregation partner, or that uses a timer-based setting in the device.

ADR for industrial customers

• ADR, combined with an energy management system (EMS), could switch to on-site solar panels or battery storage for electricity during a DR event.
• An EMS can also reduce heating or cooling of an office building during peak times.
• ADR can help businesses reach sustainability goals, such as net-zero targets or LEED certifications.
• ADR programs can include incentives and rebates for equipment and installation costs.

ADR for consumers

• Consumers can participate in ADR programs using internet-connected devices such as smart thermostats, water heaters, and EV chargers.
• A home can be pre-cooled or pre-heated before peak hours, and the thermostat adjusted during peak periods to reduce energy use.
• Utilities or aggregators can automatically schedule EV charging when electricity prices are lowest or when the grid has excess capacity.

Who manages Demand Response programs?

Demand Response programs originate with the utilities or grid operators who supply electricity. They may operate the programs directly with customers or work with independent aggregators or energy service providers that organize and execute customer participation on behalf of the utility. DR service providers often sell related equipment along with energy consumption management services. These include tracking and verifying energy use and reductions for industrial customers or providing automated services that adjust cooling, heating, or EV charging while still meeting the consumer’s comfort or driving requirements.

How do Demand Response and EV home charging work?

EV owners can install smart chargers at home and capture savings by participating in a utility’s Demand Response program for EV charging. Consumers can plug their cars in when they get home from work and set the smart charger to charge the EV during off-peak hours, typically late at night or in the morning. Or they can agree to let the utility control when the charger provides electricity to the EV. If needed for driving purposes, the owner can override the programmed settings.

What is Demand Response for EV charging networks?

Smart energy management software and smart chargers work together to enable EV charge point operators and EV fleet depot operators to participate in Demand Response programs. The smart EV charging energy management system can receive DR event notifications from the utility and moderate the site’s electricity use to comply with the Demand Response program commitments.

This is accomplished through automated energy management actions, including:

• Reducing the power of individual charge points
• Lengthening the time to charge plugged-in vehicles
• Blending onsite renewable generation or stored energy with grid power

The Driivz EV charging and energy management platform supports Demand Response by enabling network operators to automatically adjust charging loads, respond to grid signals, and coordinate EV charging with onsite energy resources.