Building Operating Management

Demand Response Plays Big Role in Utility Energy Incentive Programs

By James Piper, P.E.   Energy Efficiency

OTHER PARTS OF THIS ARTICLEPt. 1: Utility Incentive Programs Can Help Facility Managers Save DollarsPt. 2: This Page

When the utility determines that demand must be reduced, those participating in the program are notified of the demand response event. Depending on the specifics of the program, participants are given an advance notice of 30 minutes to two hours. Participants are then asked to take steps to reduce their demand for electricity according to a preplanned load reduction scheme. In smaller and medium-sized facilities, customers typically turn off certain electrical loads, such as building air-conditioning systems, for the duration of the demand response event. Larger facilities and those with a building automation system can rotate the load curtailment among a number of different systems in order to minimize the impact on building operations and occupants. Facilities with standby generators also have the option of running their generators instead of or in addition to shedding electrical loads.

In order to participate, facility managers will have to identify loads that can be shed without serious disruption to operations and occupants.

Facility managers must also take into consideration how long it will take them to reduce loads when notified by their utility. Facilities with a building automation system can typically respond very quickly when notified. In large facilities, loads can be shed on a rotating basis as needed to meet demand targets.

Managers of facilities that do not have a centralized building automation system will have to take into consideration the time required for operating personnel to manually turn off and restart equipment as required.

Strategies for Success

Not all facilities are well suited for demand response programs. Demand response programs are particularly helpful for managers of facilities with electrical loads that can be shifted or temporarily curtailed without impacting operations.

It is also important that managers take into account how building occupants will react to participation in a demand response program. Turning off loads to reduce electrical demand will impact operations and building occupants. To increase the chances of success, it is important that building occupants be part of the decision making process when identifying loads that can be shed. Occupants may even be able to identify additional loads that can be shed. Ignoring the impact that the program will have on the occupants will only create resentment and resistance.

The importance of utility programs will increase as utilities move towards more widespread pricing of electricity based on its cost of generation rather than using average costs. Even if the local utility is not currently using that type of pricing schedule, facility managers should plan for its eventual adoption.

While these programs offer facility managers a variety of methods for reducing both their facility's electricity use and cost, it is important not to lose sight of the big picture when considering their energy options. In most facilities, even minor adjustments to operations can result in significant efficiency improvements. These opportunities are simply too good for facility managers to ignore.

James Piper, PhD, PE, is a writer and consultant who has more than 35 years of experience in facilities management. He is a contributing editor for Building Operating Management.

Green Energy Programs

These programs offer grants to commercial and institutional facilities for renewable energy systems, including photovoltaic, solar water heating, solar space heating, wind, fuel cell and geothermal-based systems. Most programs offer rebates to cover part of the installation costs and other incentives based on the annual kWh the system displaces. "To do's" for facility managers: ask if the utility is offering grants and incentives and if their facility is eligible to participate, then perform a site assessment to see if the facility qualifies. Funding is limited, and competition is high.

— James Piper

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Utility Incentive Programs Can Help Facility Managers Save Dollars

Demand Response Plays Big Role in Utility Energy Incentive Programs

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  posted on 9/23/2011   Article Use Policy