Demand Response = New Revenue
This Contributed Column is brought to you by the International Economic Development Council's 2015 Annual Conference. Join the largest international gathering of economic development professionals in the world. Click here to learn more about this important event.
Energy represents a significant corporate expenditure. In today’s tight economy, facilities managers are exploring ways to save money by reducing energy consumption. Smart building technologies that efficiently control lighting, HVAC and even plug loads save millions of dollars annually for mid- to large-sized electricity users.
So how do demand response (DR) programs contribute further energy savings and earnings to the bottom line? DR has clearly emerged as an early example of “smart grid” enabling technology, empowering electricity users to reduce consumption – and get paid – for responding to grid emergencies or market-price events. Many DR opportunities are available, including the more widely adopted capacity programs, voluntary price-based, and ancillary services, to name a few.
Buildings and campuses are ideally positioned to leverage existing assets and generate revenue from the full range of DR earnings and savings opportunities. Overall benefits vary depending on energy-use patterns, zonal pricing, curtailable loads, and participation levels. An ideal approach to maximize returns is to work with a partner that combines the power of building automation technology with integrated demand management strategies. It is not unusual for facilities that actively participate via integrated web-based DR platforms to capture annual savings and earnings of $100,000 or more.
Many success stories showcase commercial, industrial, institutional, and government facilities using active DR participation as a viable method to leverage existing building automation systems and fund additional energy efficiency initiatives, while complementing corporate sustainability and conservation efforts. Looking ahead, it’s clear that industry/regulatory developments and technology innovation will continue to drive DR benefits and adoption.
Terrill Laughton is Director of DR Integration for Milwaukee-based Johnson Controls, a global leader in delivering solutions that increase energy efficiency in buildings. On July 1, 2011, Johnson Controls completed its strategic acquisition of EnergyConnect, joining forces to provide integrated solutions that combine the power of building automation with easy-to-implement demand response technology.