12/04/2006

The Benefits of Demand Response

Innovative programs like these actually turn your energy cost center into a recurring revenue producer

 

Demand-Response Example

Based upon the current ISO New England 30-minute Real Time Demand Response Program.*

Demand response (DR) can turn your energy cost center into a recurring revenue stream. 

DR capacity value...... 500kW
DR event days/year............2
Hours/event day................3
DR event hours/year...........6

Minimum energy rate............... 50 cents/kWh Capacity payment rate ............$3.05/kW/month Retail electricity rate (estimated)....... 6 cents/kWh

Minimum energy payment................... $1,500 Capacity payment..... $18,300 Avoided electricity purchase..................... $180

Total annual benefit ..................$19,980  

*Benefits are subject to wholesale electricity-market prices and may vary outside of New England.

 

 

If you're like most building owners and managers, you're inundated with energy-management challenges (such as soaring electricity use and retail rates) which are made worse by the risk of power shortages on hot summer days or in the dead of winter.

One of today's most effective tools for improving energy management is called "demand response" (or "DR"). DR provides financial incentives for businesses to reduce or shift electricity use in response to power grid reliability needs or, in some regions, high electricity prices.

These innovative programs, offered by DR providers and local utility companies, actually turn your energy cost center into a recurring revenue producer. And, by better managing your energy-use profile, you may be able to negotiate lower retail rates from your competitive supplier.

From big-box department and grocery stores to factories, educational institutions, and hospitals, DR is rapidly gaining ground among large users of electricity as a way of reducing electricity use and improving the bottom line.

DR programs work differently in different parts of the country, but here's a typical example. Let's say you manage an office complex or manufacturing plant. Your peak demand for electricity is between 1 and 3 megawatts (MW) and you have non-essential electric demand of 300 kilowatts (kW) that can be curtailed on short notice - dimming lights in common areas, cooling buildings earlier in the day before electricity price reaches its peak, etc. And, you may have a standby generator for emergencies.

By implementing DR, your company receives monthly payments just for being available to shift or curtail electricity use when the grid is overloaded and/or wholesale prices spike. On these days, the regional grid operator may ask you to curtail energy use rapidly to avoid emergencies as a condition of receiving these monthly payments. A company that relieves stress on the grid by switching to electricity produced by a back-up generator during such periods could receive similar payments. (Note: Make sure that using your generator in this fashion complies with all federal, state, and local environmental regulations.)

Essentially, your company will be contributing "nega-watts" to the grid, thereby providing utilities and the grid operator a valuable level of reliability insurance. And, businesses are well aware of the costs associated with power outages and blackouts. The August 2003 power outage that darkened most of the eastern United States cost more than $6 billion in lost goods and services alone.

Demand response itself is not a new idea. Many large retail customers are accustomed to changing their consumption behavior in response to a financial incentive, such as off-peak pricing. But, today's real-time metering, Web, and remote-control technologies put DR within easy reach of more customers.

For businesses, utilities and regional-system operators, DR addresses critical asset-utilization issues. Why incur the enormous cost of building more generation, transmission, and distribution infrastructure when DR can provide equivalent performance in a more environmentally friendly, less-disruptive way? After all, the cheapest, cleanest megawatt is the one that's never used.

Henry Yoshimura is manager of demand response at ISO New England Inc. (www.iso-ne.com), Holyoke, MA.

 


Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.

 


Tennant Company is a recognized leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. With thousands of satisfied customers already using award winning ec-H2O technology, why not see what you're missing? Test ec-H2O on your soils in your facility. Get a free demo.


Tennant Company is a recognized leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. With thousands of satisfied customers already using award winning ec-H2O technology, why not see what you're missing? Test ec-H2O on your soils in your facility. Get a free demo.

 

Replace core drilling with Connectrac In-Carpet and On-Floor Wireways, the proven connectivity solution in open interior spaces of all kinds. These elegant low-profile wireways are great for AV / telecom connectivity wherever it’s needed.

 

Add highly responsive multi-zone comfort to any building project, in any climate. Our CITY MULTI H2i R2- and Y-Series VRF systems give you flexibility to fit the needs of any building. Enjoy 100% heating capacity at 0°F outdoor ambient, and 85% heating capacity at -13°F outdoor ambient.  For more information, log on to www.mitsubishipro.com


Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.

 


Tennant Company is a recognized leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. With thousands of satisfied customers already using award winning ec-H2O technology, why not see what you're missing? Test ec-H2O on your soils in your facility. Get a free demo.


Tennant Company is a recognized leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. With thousands of satisfied customers already using award winning ec-H2O technology, why not see what you're missing? Test ec-H2O on your soils in your facility. Get a free demo.

 

Replace core drilling with Connectrac In-Carpet and On-Floor Wireways, the proven connectivity solution in open interior spaces of all kinds. These elegant low-profile wireways are great for AV / telecom connectivity wherever it’s needed.

 

Add highly responsive multi-zone comfort to any building project, in any climate. Our CITY MULTI H2i R2- and Y-Series VRF systems give you flexibility to fit the needs of any building. Enjoy 100% heating capacity at 0°F outdoor ambient, and 85% heating capacity at -13°F outdoor ambient.  For more information, log on to www.mitsubishipro.com


 
comments powered by Disqus

Related Products

Sponsored Links