Amit Narayan, the Founder and CEO of AtuoGrid, Inc., prepared this article on demand response, in which he notes the shift that the industry is undergoing and has been unknowingly preparing for for quite some time. The old model of utilities had to focus on excess, creating an excess of power and capacity than what was typically needed so they could be ready for worst case scenarios. With demand response services, however, this excess would not be necessary. In fact, the FERC estimates that demand response services could actually provide for up to 20% of peak load demand.
Demand response also greatly benefits the move to work more intermittent renewables into a utility’s infrastructure, such as California’s goal to provide 33 percent of its power from renewable sources by 2020. Many renewable sources, such as wind and solar energy, are intermittent in that they depend on sources out of our control which are not always available. Demand response can pick up the slack when the wind isn’t blowing without utilities needing to resort to increased fossil-fuel generation capacity or energy storage that can cost around $2000 per kilowatt on average. Demand response systems actually cost up to 90% less than energy storage.
Demand response implementation has been slow over the past few decades, however. They have been primarily utilized by only the bigger utilities and the bigger end-users because of the need for expensive proprietary equipment installation and upkeep for something that may only be needed a few times a year, the same as the peak power plants that demand response is meant to replace. Not only that, but demand response has been historically limited in scope to specific applications based on the hardware the utility installed for the end user.
Recently, the implementation of the smart grid and the devices that utilize it have been on the rise. As the industry moves to open standards, it is finding that more and more consumers have devices already installed in their homes for various purposes that can be utilized to provide accurate and flexible response.
Read the full article here: Demand Response: Why the Future is in the Cloud
