Understanding Demand Response to Save Energy

Did you know that you can play your role in reducing carbon emissions and help the environment? What if you can also save energy and reduce your electricity bills along with it? Demand Response (DR) solutions can be a good solution in this regard.

Residential energy consumption ranges from 30% and 40% of the total energy demand throughout the world, which makes it attractive also for the electricity utilities, helping them to reduce peak demand and price volatility. Users’ consumption patterns contribute directly to sporadic peaks of demand and, to support this variation, utility companies need to increase their generation in order to avoid interruptions in the power supply. Additionally, DR empowers consumers by increasing their interactivity with the energy supplier, taking advantage of new technologies applied to their daily appliances.

What is Demand Response?

In a few words, demand response refers to targeted, short-term reductions in energy consumption during times of peak demand in exchange for financial incentives. DR is commonly implemented in the industrial sector, where energy use is high and peak energy demand comes at a significant cost to utilities and the grid itself. However, DR is increasing in the residential sector, because of despite having a lower individual energy consumption per site, the potential to exploit demand flexibility for home appliances can contribute to grid load balancing and demand shaping.

How does Demand Response work?

There are different types of residential demand programs, which depends on the goal to be achieved and the technology available in the residences. For now, let’s just categorize in two groups: manual and automated.

In manual demand response, users receive notifications from the service provider to perform actions at specific times, usually when the electricity cost is lower or there is a need for peak load reduction. This information allows them to shift the time of use of their appliances; such as washing machines, tumble dryers, water pumps and heaters. In this model, the appliances do not need to have special features such as communication with the internet or smart controllers, as the user is free to choose what can be turned off during the demand response event. The most common example is the price-based, where the electricity price is not fixed, it varies in time. For instance, users can have time-of-use (ToU) rates, where prices can be lower for off-peak periods.

Regarding automated demand response, which is most common in incentive-based programs, end-users get compensation to reduce their electric loads, on request, or for giving permissions to regulate their electric loads. This typology of programs began with industrial and large commercial customers, but recent advances, in residential technology, allowed customers to be included in those programs as well. This model can also be applied to daily use appliances such as washing machines, tumble dryers, water pumps and heaters, but now they will need to meet some technical requirements, such as sensors and smart controller, which will allow connectivity and remote actions. The big advantage of this model is that the user does not need to worry about performing the actions. As an example, imagine that the lowest price occurs in the afternoon and that there is nobody at home to take advantage of it, why not allow remote control of the appliance or heat pump, hence achieving higher energy savings?

What additional benefits Demand Response can provide?

Demand Response programs can also help customers to manage energy better in different aspects. For instance, if a house is equipped with some kind of renewable generation (e.g., PV panels), it can help to improve the energy usage by using the appliances when the energy production is higher (usually in the afternoon). This kind of generation depends on weather conditions; hence it is considered an intermittent resource, so residential demand flexibility can play an important role in matching production and demand. As a curiosity, renewables represented almost two-thirds of new net world electricity capacity additions in 2016. Also, until 2022 it is expected an increase of 43%.

Residential demand response programs can also increase the user’s awareness of energy consumption by providing important information through a user-friendly smartphone app or web interface. This takes the solution to the next level and brings additional features to the user. For instance, the app can show in real-time the energy usage and also the historical data, sometimes showing a comparison against neighbors. Moreover, comfort is improved as control actions, such as turning on a heating or air conditioning systems, can be performed remotely. According to the technology available, users can verify environment conditions, for example, temperature, humidity and CO2 concentration.

Final thoughts

Demand response programs offer a wide range of new possibilities, improving user’s life and helping utilities to manage better their assets. On top of that, the environment urges for individual actions to tackle climate changes and carbon emissions. Every house matters in this challenge. Why not start now?