With utilities of today facing the challenge of meeting growing energy demand, investing in smart technologies, innovative demand-side management and expanding distributed resources have become priorities.
In addition to unplanned outages, failure to prioritise growing energy demand has resulted in vast amounts of funds being directed towards expanding energy generation resources and transportation networks. For energy companies in regions with carbon emission caps, this means extra expenditure due to penalties for failing to achieve reduction targets.
Factors resulting in increases in demand include growing consumer bases, changes in weather patterns and proliferation in economic and industrial activities.
The inability of renewables, due to fluctuations in generation, to provide baseload energy is also resulting in very high peaks for utilities adopting new business solutions comprising clean energy as the primary generation resource.
Volt/VAR optimisation, energy-efficiency, demand response and energy prepayment are critical demand-side management options which some energy retailers are turning to in addressing instability between supply and demand.
While some are still in the pilot stages, others have already witnessed considerable benefits in employing demand-side management.
Delaware Electric Cooperative (DEC), energy provider to 95,000 member-owners in the US counties of Kent and Sussex, has recorded $25 million in overall savings since 2008, $750,000 in annual savings in conservation voltage reduction and 68% reduction in operating costs for its irrigation consumers.
Smart Energy International spoke with Rob Book, vice president of marketing and member services at DEC, and Ben Wallace, general manager of Eaton’s energy automation solutions, to understand the project rollout, reasons behind the deployment, challenges faced and the benefits of their demand response initiative.
The need to adopt a demand response project – Beat the Peak – in 2008 followed sharp surges in transmission costs as a result of increased local demand and growing demand and congestion from the surrounding areas of Baltimore, Washington DC and Philadelphia.
The increase in demand was due to rapid growth in the number of metering points registered with the cooperative. In the preceding 15 years, DEC doubled its membership — with the majority of members joining after 2000. This was coupled by increases in energy tariffs as the cost of fuel needed to generate power more than doubled.
Demand for power was highest in the hot summer months between 3 and 7 p.m. During regular load periods, the co-op would pay pennies per kilowatt-hour for power, but those rates increase to nearly a dollar per hour during times of peak demand.
The Beat the Peak (BTP) programme was launched with the provision of water heater controllers for consumers, along with email notifications during peak demand times, enabling them to take active steps to conserve energy. Later, Eaton worked with DEC to develop an easy to read and use indicator light during peak loads to simplify customer participation.
As a result, the utility can send a BTP alert during peak periods to participating members; the indicator light is red during peak times, yellow when an alert period is approaching and green during off-peak times.
More than $5 million, since the programme’s inception, has been spent on deploying 60,000+ indicators, marketing to increase member participation and coordination of the programme.
Marketing and communication programmes included press rollouts, TV and radio ads, billing inserts, online advertising, social media posts, targeted digital ads, website content, the co-op magazine, billing inserts and engagement at public events.
A vital part of the BTP programme is the educational awareness the DEC has initiated to help its members understand effective methods of reducing their energy usage during peak times. These include raising the thermostat a few degrees in the summer months, turning off unnecessary lights and delaying the use of major appliances (like dishwashers and dryers) until off-peak times.
The DEC also incorporates conservation voltage reduction, which achieves energy savings by reducing voltages at the substation level on a continual basis.
For irrigation consumers, single-phase electric lines coming into the irrigation pumps and pivots were converted to three-phase power; hence farmers no longer needed to use diesel generators.
By extending three-phase power to these lines and installing variable frequency drive technology, farmers in the DEC service area saved 68% per hour in operating costs by using electricity rather than diesel fuel.
The BTP programme was launched on the heels of the co-op’s successful campaign to opt-out of state regulation. That campaign laid the framework for how DEC would effectively communicate with their members. The difficulty was knowing what to communicate.
The goal was to keep monthly demand costs as low as possible, but nobody in the electric utility space at the time was effectively communicating that members can play a significant role in helping with that effort.
These efforts include:
• Engaging with and notifying residential customers of peak demand times and when to reduce energy usage
• Identifying and applying the right demand response technologies to provide automatic reductions in energy consumption when electricity costs the most
• Supporting more power in the system during off-peak times without adding infrastructure costs
Smart grid prospects
Over the next five years, a majority of the members will receive a radio frequency (RF) meter, eventually allowing them to analyse their energy use and demand better. This summer, DEC launched a new programme that will allow the co-op to remotely control NEST thermostats during times of peak energy use via wireless communications.
Members who opt into the programme will receive a billing credit. In 2019, DEC is expected to use a similar system to launch a demand-side management programme directed at electric vehicle chargers.
Finally, a recently completed fibre loop across the DEC service territory will allow for the installation of new remote devices that will reduce the duration of power outages.
Cooperatives’ overall smart grid market
The market is rapidly expanding. The challenge within the cooperative utility segment is twofold. First, the smart grid is not just the meter on a members’ home which makes it easier for DEC to read the meter remotely.
The next challenge is the amount of data DEC now has available and what to do with it. This data offers a world of opportunity for DEC operations teams to find, diagnose and repair issues on the systems which can help reduce outages and keep rates low.
Another data consideration is if and how DEC presents this data to its members.
How much information about their usage do they want or need and, if DEC makes a substantial investment to offer a portal or the like to its members, will it be worth the investment? Will they still care two months after implementation?
The second challenge is the idea that the utility is going to have to be behind the meter more as the technology advances.
“We are at a point now where we can check the temperature of our homes and adjust the thermostat from our phone. We can check to see if our EV is still charging in the garage,” says Book. “We will eventually be at a point where all of these devices will be talking to the members and, in some cases, to the utility. We need to be firmly in this space and ready to assist our members with this new work or else some other entity will fill the void we leave.” SEI