How integrating EE & DR creates a ‘win-win’ for the utility and its customer
Earlier this summer, I hosted a webinar on how Smart Lighting can help a utility do more than save energy – it can target its Energy Efficiency to times of high stress on the grid. If you would like to watch the webinar, it can be found here. Smart Lighting is one example of a class of products that integrate Energy Efficiency and Demand Response into one package – my previous post details other types of customer load that can be controlled. For this post, we are going to highlight the value that gets created when we integrated EE & DR. If you missed the Part 2, it details the Open ADR technology that allows us to execute on this solution.
What is Integrated Energy Efficiency and Demand Response?
Integrated EE/DR products are both energy efficient and capable of automatically responding to a utility demand response signal. Integrated EE/DR products produce ‘stacked value’ – which is simply a bundle of benefits that create different value streams. These value streams impact the customer, and the utility. Stacked value helps decision makers justify capital spending on efficiency projects by providing a deeper understanding of the total value that a project can deliver across an organization.
What value is created for the customer?
Let’s think of a customer who installs a single Smart Thermostat in their small business. Smart Thermostats are efficient and we can conservatively estimate energy savings of 10%. A Smart Thermostat can also add additional value to the owner, through allowing remote, 24/7 access. Certain Smart Thermostats also provide the owner with a wealth of usage data that is easily visualized through interactive charts and graphs. Finally, if the owner enrolls the device in a Demand Response program they will see lower demand charges and likely an incentive for participating in an energy event. Smart Thermostats typically cost around $250 plus installation. We recommend that our utility partners fully cover the equipment and installation cost – thus providing the customer the full value stack at no monetary cost. We recommend that utilities mandate participation in a limited number or short term events that setback temperatures by only degrees and for a very limited time.
What is the value stack for the utility?
Demand Side Management programs often silo energy efficiency and demand response into separate programs. However, shrinking budgets and expanding goals requires decision makers to seek innovative solutions that allocate resources in a way that streamline internal operations. A combined offering that integrates EE and DR into a single package creates internal cost efficiencies that result in lower project management and administrative cost, while simplifying the planning, budgeting and procurement processes.
Beyond internal efficiencies, integrating EE/DR simplifies the customer outreach process by offering a combined incentive. Communicating problems associated with utility peak and demand management to customers is complicated. Integrating EE with DR allows the outreach professional to explain load curtailment in the context of energy efficiency, broadening the customer awareness of energy issues.
As our grids soak up more Variable Renewable Energy (VRE) – grid operators will seek out flexible resources like Demand Response in greater numbers to supplement capacity and maintain grid stability. Demand Response has traditionally relied on obtaining curtailable loads from the largest customers, but technological advances now make it possible to enroll customers from across the C&I segment – growing the pool of available participants. At DNV GL, we have scalable product recommendations that fit all classes of customers from small to national sized businesses. Even if peak management is not currently a concern for your utility, it may be in the future! Our recommendations work for both the retrofit and new construction markets and help mitigate lost opportunities.
Ultimately, an integrated EE/DR offering allows a utility to begin treating the customer load as a resource, raising the role of the customer to one of a trusted partner. This partnership extends in both directions, with the customer coming to view the utility not only as an energy supplier, but as a resource who helps them manage their energy resources. As I referenced in my previous post – everyone wins when we think outside the box and integrate EE with DR.
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DNV GL has successfully designed and implemented Smart Lighting Systems projects on behalf of our utility clients for four years. Our team has significant project experience in both retrofitting and new construction of lighting projects. We work through the project life-cycle to identify, justify and evaluate energy saving measures and provide post-installation engineering review to verify savings.
Our team is available to work directly with large institutions to assist them with Smart Lighting Systems projects. For more information, please contact Wesley Whited. Wesley Whited is a Senior Consultant for Smart Lighting Systems at DNV GL. Mr. Whited has seven years’ experience in the commercial lighting market ranging from project management to sales. Mr. Whited is a graduate of West Virginia University (WVU) and holds a MBA from Capital University in Columbus, OH