Demand response is increasingly important, say Jeff Shaw, vice president of distributed energy and sustainability, SMECO, and Steve Hambric, vice president of consumer energy management, Itron.
The definition of ‘demand response’ (DR) is growing more important as more utilities aim to be more resourceful.
With this, it’s no surprise demand response and technologies such as advanced metering infrastructure (AMI) are on the rise, according to an analysis by the Federal Energy Regulatory Commission (FERC). DR participation in wholesale markets rose by about 3% from 2016 to 2017, to a total of 27,541MW.
The contribution of demand resources to meeting peak demand reached 5.6% last year, a 5.3% increase from 2016.
While the FERC report is new, the technology has been around for more than a decade and has already produced some impressive results. The growing interest, participation and success metrics tied to utility-driven programmes are being fuelled by the innovative use of AMI, following a surge in smart meter deployments over the last 10–20 years.
Simply put, as smart meters have become the most prevalent type of metering devices in use, utilities and consumers have been quick to maximize the opportunity to become more resourceful global citizens through programmes such as DR, among other important initiatives.
A great example of a pioneer in DR programme success is Southern Maryland Electric Cooperative (SMECO). When SMECO created a DR programme – in partnership with Itron – the utility not only set ambitious load reduction goals, the team was strategic in also tackling plan participation early on to ensure the programme’s efficacy in the long-term.
This project was launched in 2008 to enhance the system’s reliability to benefit the electric co-op’s 147,000 customer-members. Here’s what SMECO was looking to achieve:
• Achieve 33% plan participation
• Reduce load by 50MW by 2013
• Reduce load by 75MW by 2018
The overarching goal of this project was to give the utility more control over the cost of meeting its utility obligations with a more diverse mix of resources. This allows the co-op to rely less on conventional supply-side resources, which have fluctuating costs from high fuel prices.
Solution The utility opted for Itron’s pay-for performance demand response solutions in order to help reach its goal to achieve 33% plan participation and reduce load by 50 megawatts by 2013, and a longer term goal to reduce load by 75 megawatts by 2018. This programme was designed to engage all three customer classes: residential, small commercial, and large commercial and industrial. Residential customers were the primary focus.
Residential and small business customers were offered free installation of two technology options – either an IntelliTEMP programmable thermostat or an IntelliPEAK outdoor load control switch – through the SMECO CoolSentry programme.
This ensured that customers received signals for a conservation event. Bill credits were issued to participants during the summer-cooling season months.
CoolSentry was powered by a software that automates every phase of the programmes to guarantee seamless delivery and uniform customer experience. When the programmes began, SMECO had 132,000 residential customers, including an estimated 70,000 of them with central air conditioning or heat pumps. An additional 13,000 commercial business customers were eligible for the programmes. Itron and SMECO estimated that 33% of eligible customers would take part in the programmes.
Strategies The programme was successful thanks to coordinated marketing efforts and efficient operations, along with quality control and curtailment optimization. The marketing plan called for an effective multi-channel rollout, so SMECO led a word-of-mouth campaign and Itron initiated a campaign to further educate both new and legacy load management platform customers.
While SMECO educated customers during local community events, Itron kicked off a direct mail campaign, as well as a door-to-door information campaign to property managers and small commercial businesses.
Timing was vital to effectively coordinating enrolments with installations. However, because SMECO’s coverage area is primarily rural, the installations were divided into five target areas, with mail-drops being staggered in two-week segments. This ensured that installers had contiguity in their routes, while evading irritating delays for customers.
As the programmes matured and direct mail responses decreased, a shoe leather campaign was implemented, and trained agents went door-to-door to recruit for the programme. Although the curtailment plan originally called for 50% adaptive cycling for control switches and a three-degree setback option for thermostats, successive testing indicated that cycling all devices led to a higher load reduction.
A key factor in this programme’s success was coordinated communication and deployment efforts between SMECO and Itron to respond to opportunities and customer questions. Itron merges database information with SMECO bi-monthly and gives the co-op utility dedicated local resources to support their call centre. This assures positive customer experiences and gives the utility more time to focus on its business. Also, Itron field technicians inspect equipment before and after control seasons to identify any potential lost load. IntelliSOURCE Enterprise, Itron’s demand response management system, is used to automate SMECO’s programmes from analytics to load control.
After the first fully programmed year, over 20% of eligible customers enrolled. In fact, three of the first five years saw more than 20% enrolment. With over 43,000 devices installed, more than 50% of eligible households participate in the programmes today, which is 17% higher than the initial 33% projection.
Total residential and commercial participants account for nearly 60MW of load – 20% more than the five-year target. SMECO estimated that customers would see $840,000 in savings from the programmes by 2010, and since then enrolments have grown 200% and the savings keep adding up. SEI