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The Manhattan Session: Talking DR and Energy Management
Luke McAuliffe | June 30, 2011 at 1:35 pm
Yesterday I moderated a Rockefeller Center event hosted by AGRION, a business network for energy development, on “Integrating Demand Response and Energy Management in the C&I Markets.” Participating in the keynote panel were some of the biggest names in DR and energy management, including Johnson Controls, Schneider Electric, GE, Siemens, EnerNoc, Lockheed Martin and World Energy. With the continuing evolution of the Demand Response markets and the recent acquisitions of many large “pure play” Demand Response Providers – CPower, Energy Connect, and Akuacom to name a few – the questions posed throughout this forum were certainly fertile ground for conversation!
Here’s what I took away from the discussion. Everyone agreed that Demand Response and Energy Efficiency are complex topics/products and that further education of their prospective and current customers needs to take place. Additionally, many of the larger control companies seem to want to provide an “end to end” solution regarding Demand Response services, but I did not recall anyone mentioning any product differentiation or approach to market (though the latter is certainly understandable). While the integration of DR and EE would intuitively seem to go hand in hand, there is a disconnect in that DR can be integrated quickly, there is no out of pocket costs for enrollment, and customers receive revenue for their participation. This differs from EE, where capital outlay is necessary and the revenue allocated for these projects needs to be budgeted in advance so implementation normally takes longer. At the end of the day, both do accomplish the same thing, which is to lower customer’s energy usage through effective energy management practices.
Two encouraging trends that seem to knit DR and EE much closer though are the OpenADR standard and the newly created LEED point for DR participation. The future of effective energy management seems bright and it is certainly evolving. Stay tuned!
Luke,
I agree that Demand Response and Energy Efficiency are topics that are complex and that further education is necessary. One of the aspects that makes DR and EE so complicated is that the rules governing DR and EE compensation change region to region and even State to State.
The Midwest states including those in PJM (Ohio, MI, WV) and the MISO States are really behind the curve on recognizing the benefits that EE and particularly DR can provide for their citizens. A lot of this is a result of their strict adherence to utility programs (as opposed to allowing competition.)
For example, DR in the MISO territory is almost non-existent. In the MISO states (MI, WI, IN, MO, MN, SD, ND…) aggregators are not permitted to independently provide services for customers because of both MISO rules and the refusal of the State Commissions to recognize its value. In those states the utilities’ DR programs still prevail and many of them have upfront costs (e.g installation of meters), in some states there are requirements for long term committments (e.g. Indiana, and significant penalty exposure if performance is not satisfactory. Obviousl, these are deterrents for customers participation.
Luke,
I agree that Demand Response and Energy Efficiency are topics that are complex and that further education is necessary. One of the aspects that makes DR and EE so complicated is that the rules governing DR and EE compensation change region to region and even State to State.
The Midwest states including those in PJM (Ohio, MI, WV) and the MISO States are really behind the curve on recognizing the benefits that EE and particularly DR can provide for their citizens. A lot of this is a result of their strict adherence to utility programs (as opposed to allowing competition.)
For example, DR in the MISO territory is almost non-existent. In the MISO states (MI, WI, IN, MO, MN, SD, ND…) aggregators are not permitted to independently provide services for customers because of both MISO rules and the refusal of the State Commissions to recognize its value. In those states the utilities’ DR programs still prevail and many of them have upfront costs (e.g installation of meters), in some states there are requirements for long term committments (e.g. Indiana, and significant penalty exposure if performance is not satisfactory. Obviously, these are deterrents for customers participation.