One of the best kept secrets is that there is money to be made if you are ready to cut your electricity use on short notice to meet the market demand for electricity. If you are a large or medium business, a large condominiun or apartment building or organization than you might want to contact a "curtailment service provider” also known as a "demand response company" to see how they could help you do this. Your actions will also be good for the environment.
What's a Demand Response Company or Curtailment Service Provider?
A demand response company is a company that is familiar with the jargon and intricacies of the regional electricity markets. They transact business with the power grid operators and represent groups of clients who are willing to curtail their electricity use in the regional electricity marketss. Some of the more well known names are North America Power Partners, EnerNoc, and New York's Consumer Powerline. These companies don't own any power plants or transmit electricity. However, they actively participate in the electricity markets by offering to reduce the demand for electricity for a fee.
How it works
Electricity cannot be stored efficiently. So to balance electricity supply and demand, and avert brownouts or blackouts, grid managers actively oversee power plants. In a sense they order power plants to come online or go offline and follow the demand for electricity each day. This varies each day and by the time of year.
During a typical day, the need for electricity increases and the electric grid operators in regional markets across the U.S. have to meet that demand. They are also required to do it at the lowest cost. They do this by scheduling the lower cost powerplants first. But as demand increases throughout the day, they traditionally had to schedule higher cost powerplants to meet the demand for electricity.
Things are different now that demand response companies are participating in the markets. Now the electric grid operators have another option. Here's an example. Let's assume that there is a need for 50 megawatts of power to meet the demand for electricity at 6:00 pm. Instead of ordering a very expensive 50 megawatt peaking plant to come on line, the grid operator may pay North America Power Partners, EnerNoc, and/or New York's Consumer Powerline to curtail 50 megawatts of electricity for 1 hour. The cost to reduce the demand is significantly lower for the grid operator than bringing that peaking plant online.
What do clients do to curtail electricity use?
There are a number of actions that a large or medium business, a large condominiun or apartment building or organization could do to reduce electricity. These include:
- Reduce common space lighting
- Change thermostats in buildings
- Reduce laundry volume
- Conduct maintenance on machinery
- Lower fan and pump speeds
- Reduce or discontinue manufacturing
See a graphical explanation of Demand Response works courtesy of EnerNoc
Using a demand response is a Win-Win-Win for the grid operator, demand response companies and the clients they represent. Here e some of the benefits:
- Lower cost of grid manager and electricity consumers not to operate that peaking power plant in the first place.
- Less strain and reduced congestion on the electricity grid.
- Better for the environment- not burning fossil fuels to get those extra megawatts.
- Demand response companies and their clients are compensated for curtailing their energy use temporarily.
- Demand response companies are ideal for large businesses looking for ways to cut their energy costs and become more competitive.
The following demand resources or curtailment service providers are leaders in this industry:
If you have experience with these companies, please share your experience with us by commenting below.
Large commercial and public organizations can also install solar panels and small wind turbines on their roofs to reduce their electricity needs and benefit the environment.