Con Edison's Green Team has increased the incentives it pays to customers who agree to save electricity during periods of high energy consumption. This will help immensely during hot New York summer days when air conditioners are switched on.
Customers in the energy efficiency programs help Con Edison keep the power flowing during peak usage times and they form an important part of the utility's strategy to provide a reliable power service.
By increasing the incentive payouts, the utility aims to encourage more customers to join the demand response programs. Sim Zirkiyev, manager of Commercial Demand Response Programs at Con Edison, explains that customers will generate revenue and will help the utility to provide the city with a reliable power service.
Major savings for the customer
The incentives are aimed at owners and operators of commercial, industrial and multi-family buildings since they are generally more energy-intensive. The company's Demand Response programs already include 700 buildings.
Customers in the Distribution Load Relief Program can receive up to US$15 per month for each kilowatt they pledge to reduce, depending on their building’s location. The payout is the same for commercial customers. Even if the utility does not ask consumers to reduce their consumption, they will still receive their payouts.
During demand response events, participants will receive US$1 for each kilowatt hour they save. Customers in the Distribution Load Relief Program will receive a two hour (or less) advance notice to start reducing electrical consumption. However, customers in its Commercial System Relief Program, will receive a 21 hours’ notice to start reducing electrical usage. They then receive an additional notice two hours in advance.
Both programs have other flexible options. A new feature, launched at the beginning of this year, offers customers (in both programs) an additional lucrative incentive payment if they participate for three consecutive years.
The registration deadline for customers who want to begin participating and collecting payments for May is April 1. But customers can register through June 1 and begin participating and collecting payments in July.
Demand response potential in the US
Demand Response in the US has grown to a point where it can potentially meet about 9.2% (i.e. 72,000 MW) of peak demand nationwide. This is according to the annual demand response survey conducted by the Federal Energy Regulatory Commission (FERC).
According to the FERC report, the commercial and industrial category has shown the largest increase in demand reduction potential – a whopping 31%, as compared to about 26% increase by the wholesale markets and a less than 13% increase by the residential category.
The report also shows that incentive-based programs are more popular with customers as compared to time-based programs.
As the overall electricity grid becomes ‘smarter,’ a number of demand response programs can be integrated. This will assist in harnessing the full potential for peak reductions.
Smart grid developments will enhance demand response programs
Ongoing developments in the power industry may lead to growth of demand response program deployment and general acceptance. A smarter grid will allow utilities to integrate various demand response programs thereby increasing the overall potential of possible peak reduction.
The growth of advanced meter deployments will allow utilities to measure time-based use which may see renewed interest (from utilities and consumers) in time-based programs.
The advanced meter penetration (i.e. the number of advanced meters installed as a percentage of total electric meters) in the US has already increased from 8.7% in 2010 to about 23% in 2012-this amounts to a total of 38 million advanced meters. The number is expected to reach 65 million by 2015.
Widespread use of distributed generation, especially from residential consumers (for instance roof-top solar) will be another driver to maximize demand response potential. In these cases, the utilities can provide what is known as an ‘export demand response’ potential, where distributed generation consumers can feed electricity into the local grid as a means of participation, instead of only through load curtailment.
Demand response offers a win-win situation for both the utility and the consumer. It is therefore expected to become more mainstream in the near future. It provides opportunity to save money and at the same time reduce the need for increased investments in power generation. This will help to create a more reliable power system, keep rates down and help to reduce carbon dioxide and other greenhouse gases.