Natural gas, water heaters, connected devices and EVs lead DR trends to watch
Peak Load Management Alliance Executive Director Ed Thomas talks about trends in an industry that is being fundamentally changed by energy technology.
Natural gas, water heaters, connected devices and electric vehicles are at the core of some of the top trends in demand response now.
But how did we get here? Utility Dive spoke to Ed Thomas, executive director at the Peak Load Management Alliance (PLMA). The group was founded almost 20 years ago as a forum for people involved with demand response programs.
“A lot of the folks who built these programs to dodge a peak are suddenly saying ‘Wait a minute — what if we use that to fill a valley?'” explained Thomas. And whereas peak demand might have been 10 hours a year in 1998 (when PLMA was founded), some utilities are flipping their switches multiple times a day.
“That’s not market forces,” Thomas said. “That’s operational.”
Alongside this shift in how demand response is being utilized, there are also more technologies being included under the DR tent. It has morphed into a demand management hybrid that can make for strange bedfellows, said Thomas. Energy efficiency is often paired or bundled with demand response efforts, and increasingly PLMA is seeing interest from solar+storage providers, Thomas noted. They want to better understand the value propositions around peak demand, and learn how to bundle renewables and storage “so they can play in the demand response markets.”
“I hope I live long enough to see both of those camps come together,” said Thomas. “Unfortunately, we don’t usually get all three. God forbid, energy efficiency, renewables and DR would all come together. But we think that’s the definition of distributed energy resources.”
And as utilities change the way they utilize demand response, they are also looking for more connected resources.
A report written by Navigant and the Smart Electric Power Alliance earlier this year found programs focused on air conditioning cycling have the most customers with more than 2.6 million. However, utilities say water heater programs provide more flexibility; they called DR events an average of 36 times per year for water heaters, versus 8 for air conditioning.
“Water heater control programs all of the sudden are sexy,” said Thomas.
“The other thing we’re seeing, the gas guys are coming to this party — it’s not just about electricity. The natural gas folks have peak demand driven by the pipeline [capacity], or if a supply source gets cut off,” said Thomas.
“Gas guys have never told people to use less,” said Thomas. But increasingly they are facing similar issues and are following in the electricity sector’s footsteps.
From gas demand response to reverse demand response, here are several utility programs that highlight these trends and serve as signs of the industry’s future.
National Grid’s electric approach to gas DR
It is a familiar story for many electric utilities: National Grid has seen flat or declining natural gas demand in its service territory, but still faces a peak demand problem over a very short duration. The utility wants to avoid or delay costly upgrades, and so it is looking at solutions not often seen on the gas side.