Electricity Companies

Demand management: Strategies for building engagement with customers

To many utility customers, suggesting a demand management or energy efficiency program will generate a scenario along these lines: “I come home after a hard day. It’s 97º outside and I’m ready for a moment of relaxation in my home. I come in the door and it’s 95º in my house because the utility shut off my air conditioning. Thanks, but I don’t need that kind of aggravation.”

Is that an accurate picture of demand management? It shouldn’t be, but it could reflect a poorly designed or implemented program. Let’s say that you wouldn’t let that happen, but if a user expects it will be the reality, it is a misunderstanding you will have to work to dislodge. According to Navigant Research’s 2013 Smart Thermostats report, adaption rates of smart thermostats are dependent upon the user’s “desire to be proactive in preserving resources needed to generate energy, to save money on their energy bills, and to build convenience into their home with intelligent heating and cooling.” The ultimate goal of interaction with your customers on this kind of program is to have them so attuned to their demand patterns and the way they fit into the larger picture that demand management will take care of itself. Those people understand how it works, why it’s important, and how they want to participate. They’ll do it with minimal prompting.

The reward for those willing participants is that they will reduce their electric bills and have some sense that they are reducing the world’s carbon footprint. Maybe they don’t understand all the details, but they know that they’re doing something desirable and good.

The technical aspects of the program aren’t complicated, and they center around the Wiser North America solution with its innovative hardware (e.g. smart thermostat), engaging user apps and behavioral tools. Simple though the concept may be, the program will fail if customers don’t understand their role. Here are key points and steps that most customers don’t know – but are critical to delivering true energy management:

  • The amount of power generated and consumed at any given time have to match because electricity cannot be stored;
  • Utilities have to do their best to control production and follow demand. Spikes in demand can usually be predicted but some happen without warning. A utility must do its best to respond, but some tools do not have immediate effect;
  • The supply of power is limited for many practical reasons, and there are times when demand can outstrip supply, or transmission lines in a given area may be overloaded;
  • The results of these problems can be significant and cause blackouts or other interruptions; and,
  • The purpose of demand management is to reduce unnecessary consumption and total demand to more sustainable levels thereby preventing a larger problem.

A utility, including municipals and coop territories, must make the point that providing electricity during peak demand times is expensive, and customers end up paying that price whether they know it or not. Customers can, however, choose to minimize the amount they buy when it is expensive. They don’t need to run the clothes dryer in the middle of the day. They can stand a couple of hours with the thermostat set at 80º rather than 74º. Such modest reductions benefit them in two ways: They avoid the cost of those expensive kW hours, and they might get an additional incentive from the utility.

Having a solution installed, such as from Wiser North America, helps keep customers informed as to when they are moving into a demand management situation with broadcast messages and weather reports. Customers can adjust their air conditioning even when they aren’t home using the app. In some cases, they might receive a message from the utility asking them to make an adjustment to shed load, and the message can include the relevant incentives connected to that situation. When conditions are particularly extreme, the utility may make that adjustment unilaterally and offer appropriate compensation. But there will be a promise that there will be no situations as outlined at the beginning. Such interventions will be limited and carefully timed to avoid larger disruptions.


One Response
  1. Rod

    Well this article is a little misleading in itself.
    “A utility, including municipals and coop territories, must make the point that providing electricity during peak demand times is expensive”
    That is not entirely true although we can argue that as the demand increases the control centres bring on the more expensive fuel sources.

    But as far as the “poles and wires” utilities referenced it costs them no more to provide 1 kW of electricity at peak times vs off-peak times – it is the same wires.
    The issue for them is how BIG is that peak – that affects how big the wires (and transformers) need to be.
    So having designed a wire to handle a certain collective peak, the cost of the infrastructure to supply that electricity at off-peak or on-peak is the same as it is the same wire!!!
    However if we keep increasing the peak, the utility has to keep increasing the size of the wire. So we penalise the consumer for contributing to the peak.

    A utility here in Australia meaured the power demand on a feder on the same day in 2009 and again in 2014
    The peak was the same at 140 MW so we could say that things have been well managed and indeed they report some 37% penetration of domestic solar PV.
    But the midday trough fell from 90 MW to less than 20 MW.
    SO when you do the area under the curve you get kWh and hence revenue to the utility. That has reduced by some 30%.
    So now the utility has to maintain that peak capability but with 30% less revenue.
    Interesting conundrum!

    Reply

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