Demand response: National Grid to help businesses save $3.6bn

National Grid’s new demand response programme claims to help business customers save thousands of dollars in electricity.
Published: Tue 28 Feb 2017

US electricity and natural gas delivery company National Grid has put into place the first demand response programme for its business customers offering them the chance to reduce their electricity bills and at the same time, make money. 

The utility, serving nearly 7m customers in New York, Massachusetts and Rhode Island, is incentivising energy business customers to become more energy efficient in their operations. 

The two-year pilot, launched in late January of this year, could see commercial participants receive up to $3,500 in incentives for reducing electricity consumption during peak consumption times. The energy savings made from this pilot is expected to power over 20,000 homes.

National Grid demand response- a cost effective game changer

Carlos Nouel, vice president of New Energy Solutions for National Grid says that the company is pleased to be able to offer the demand response energy efficiency programme which will give customers the technology and information they need to make more informed decisions about reducing energy consumption. 

He adds that the utility hopes to demonstrate that this programme, and others like it, are “cost-effective game changers” that will revolutionise how customers and business use and budget for their energy. 

CPower, Enernoc and IPKeys are helping to administer the National Grid demand response programme. These companies will ask participating customers to reduce consumption for at least 20 hours during the summer months, typically in one-to-four hour increments. Participating businesses can receive up to $35 for every kilowatt-hour curtailed during these reduction periods.

Glenn Bogarde, Senior Vice President, CPower, says that these large energy consumers have the opportunity to mitigate high capacity prices and reduce their electricity costs, while simultaneously supporting grid reliability. Participants can “feel good” about being part of this solution, says Tim Healy, Chairman and CEO, EnerNOC because it is strengthening grid reliability at the same time.

National Grid’s energy efficiency plan

While this is National Grid’s first commercial demand response pilot, it is not the company’s first demand response programme that has been tested on the electricity distribution system. 

More recently, the utility was granted an interim extension by the Department of Public Utilities for its residential demand response pilot ‘Smart Energy Solutions’. Under this programme, nearly 15,000 customers in Worcester, MA, managed to save $16 per month on their electricity bills just by reducing usage during peak times.

The utility has a very ambitious three-year energy efficiency plan which was launched in 2016. Electric energy efficiency will receive nearly $850 million in finance and natural gas efficiency, $382 million over this period. The aim of the plan is to save customers $3.6bn.

To help meet these goals _as well as improving its distribution network and customer service - National Grid created a group called the NES Customer Solutions Group. The aim of the group is to focus on innovation and technologies that will drive “cleaner energy and improved efficiency, affordability and choice for the customer", according to James Bell, an associate engineer in the group. 

NES reflects National Grid's larger Connect21 goals, which focus on the utility's strategy for transforming its infrastructure and developing new energy solutions that align with state initiatives and customer benefits.

National Grid offers discounts on energy efficient products and technical assistance to commercial customers, enabling them to reach their company energy efficiency goals as well as its own.

This could perhaps be a more sustainable solution to getting customers to participate in US demand response programmes because incentives have the potential of hitting utilities’ bottom line in the long term.

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