Part 2 in a series focused on the strategies and trends that electric utility companies are offering, and the benefits customers can achieve by adopting them.
In our previous article, How utility companies reduce energy demand and alleviate stress on the grid, we discussed the variety of energy demand management programs utility companies are using to achieve a balance between energy production and demand. Available options that fall under demand-side management (DSM) – demand response (DR), energy efficiency (EE), and distributed energy resources (DER) – can all contribute to a successful energy-saving strategy.
The business model of utility companies has remained relatively unchanged for decades. Now that they are facing a rapidly changing environment that requires new thinking, utilities are embracing DM, EE, and DER as being part of a holistic approach to managing their electric generation assets and distribution grids. Programs being offered to customers by utilities are a response to market forces that include:
- Financial – It can be more cost-effective to pay customers to manage their electricity demand and consumption than it is to build new generation and transmission lines.
- Operational – DM, EE, and DER are now considered to be more desirable approaches than DR as they result in permanent kW and kWh reductions.
- Regulatory / legislative – More states and localities are issuing mandates for energy efficiency to provide cost savings to customers while also mitigating the effects of climate change caused by greenhouse gas (GHG) emissions.
- Greater adoption of renewable energy technologies – As these maturing technologies become more reliable, the cost for installing them continues to fall. There are more options than ever to purchase renewable energy to meet specific business needs.
- The continued emergence of IoT technologies – Employing a “work smarter, not harder” approach, there is a growing trend to integrate IoT (Internet of Things) into the picture. More than three-quarters of the companies that responded to a recent Smart Energy Decisions survey either are using IoT or are planning to implement it for energy management.1
- A shift in consumer behavior – Energy consumers are playing a more active role in deciding how their energy is produced. For example, Smart Energy Consumer Collaborative’s 2018 State of the Consumer report revealed that customers desire a shift to renewable energy programs that can help them reach their own goals.2
- Diminishing impact of DR – DR usually requires customers to reduce energy by increasing temperature setpoints and reducing load levels. Customers with smaller loads are often unable to quality for DR programs, while many larger customers eligible for DR are unwilling to accept the reduced comfort. With DM, EE, and DER, all customers are both willing and able to participate.
Success for customers
An optimal energy-saving strategy focuses on both energy consumption and peaks in demand. Achieving these reductions is a “win-win” for both customers and utilities. When customers and utilities partner to adopt DM, EE, and/or DER strategies, the benefits can be significant.
1. Lower electric costs. There is a myriad of energy-saving programs that enable customers to partner with utility companies and realize noticeable savings on their electric bills. Now more than ever, utilities are eager to improve the customer experience, and they continue to introduce programs designed to reduce energy use.
2. Achieve greater control over how and where their electricity is generated and delivered. Renewable energy is transforming the way electricity is generated and consumed. Advances in technology are empowering customers to take more control of their electricity usage. Digitally-connected customers are actively seeking value-added products and services and want to maximize their rewards for energy-efficient actions.
3. Meet sustainability goals. From solar panels and smart thermostats to electric vehicles and LED lighting, consumers are adopting a wide range of green practices that are energy-efficient and cost-effective. In this new era of sustainability, customers are asking how electricity is being produced so they can make decisions that won’t compromise the future of our planet.
Optimizing energy savings with cloud-based technology
Commercial and industrial customers who wish to take even greater advantage of utility-offered programs are doing so through IoT-enabled energy management software. An example of this is Encycle’s Swarm Logic® technology that dynamically synchronizes HVAC rooftop units (RTUs), enabling them to operate most efficiently by responding in real-time to changing conditions such as outdoor temperature and building occupancy levels.
Swarm Logic uses machine learning capabilities to create dynamic models for each building and its thermal load profile. With Swarm Logic, RTUs become part of an IoT-based closed-loop system that coordinates their activity and distributes energy consumption more logically among the individual RTUs without the need for additional hardware or equipment in most cases. The enterprise-wide solution operates quietly in the background, requiring no human interaction to maintain or monitor its actions. Companies using Swarm Logic routinely reduce HVAC electric costs and consumption by 10 to 20 percent with little or no capital investment.
As businesses continue to face unprecedented financial challenges, it is more important than ever to explore every possible angle for energy reduction. By doing a little research, enrolling in utility-offered programs, and considering new IoT-based technologies, customers can meet their energy reduction targets and improve their bottom line.
1Smart Energy Decisions / Siemens, 2020, Smart Energy Decisions Research: The State of IoT and Smart Buildings, www.smartenergydecisions.com/upload/research_+_reports/sed_the_state_of_iot_and_smart_buildings_2020.pdf.
2Smart Energy Consumer Collaborative, 2018, 2018 State of the Consumer, smartenergycc.org/research-releaseseccs-2018-state-of-the-consumer/.
Contributing author: Chris Hensley, Executive Vice President of Sales and Marketing, Encycle Corporation