How Utilities Can Manage Customer Demand, Increase Customer Engagement

blue city

by Michael Nark, BuildingIQ

Businesses require considerable energy to drive day-to-day operations to stay competitive. The result is increased electricity usage during peak demand. Even with the large push to integrate renewable energy sources into the power grid, these sources are unreliable and not consistent enough to reduce consumption during peak demand. If the wind stops blowing or cloud cover moves in, peak demand doesn’t drop. A more reliable approach is to target energy usage in commercial buildings with demand response programs and technology.

Amid rising energy costs and increasing stress on the grid, companies and utilities are looking toward alternative methods to regulate and reduce energy consumption. Commercial buildings are the biggest utility customers, using nearly 40 percent of the total energy consumption in the U.S. With the right energy management platform, utilities can begin to understand how their energy is being used and then can control the load of their most intensive energy consumers during demand response events, thus tackling peak demand at the source.

Using Energy Management Platforms

Advanced cloud-based software applications leverage sophisticated algorithms and predictive optimization technology to streamline energy usage associated with heating and cooling operations. Unlike other solutions that might require retrofitting and invasive changes to buildings, this cloud-based technology leverages existing infrastructure. The software works with facilities’ present building management systems to create a sophisticated thermal model using variables such as weather forecasts, building characteristics, energy pricing, occupant comfort and demand response signals from the utilities. Once this model has been created for a building, the software then determines the most efficient HVAC operating strategy for the upcoming 24-hour period and makes real-time changes to building controls as necessary. In addition to optimizing daily energy usage, the software is also able to participate in demand response events.

Automated Demand Response

Because the software connects directly to local utilities, it can provide high control and visibility to all parties and can assist in implementing automated demand response initiatives. The software also allows utilities to forecast the amount of energy load that can be reduced before demand response events. For instance, a utility can identify a specific time of day when demand is at its peak and the grid is most pressurized. After determining the benefits, automated adjustments for demand response events are made without sacrificing occupant comfort, which means employees, staff and visitors in a building don’t even realize an event is happening.

During demand response events, utilities benefit from lowered peak demand, and customers benefit from lower energy charges. When demand response events are not occurring, the software still can provide energy savings to buildings by fine-tuning controls based on predictive analytics.

In areas where there are pricing block rates for energy, energy management platforms allow end users to participate in time-of-use (TOU) rates. This transition from a more traditional flat rate structure to a variable structure is another way to reduce expenses. Although TOU pricing and tariffs aren’t necessary for this application to be worthwhile, they augment its value. TOU rates create certain expense criteria that are hard to navigate without this real-time technology. The ability to control and visualize utilization allows managers to feel comfortable and informed in their decision-making.

Is an Official DR Program Necessary?

It’s often asked if an official demand response program is necessary for utilities. No; however, a major benefit for utilities that set up networks of energy management platforms is direct connection to their commercial building clients to regulate consumption, as opposed to going through third parties, such as an aggregator. In addition, the incorporation demand response programs add a clear economic factor that can serve as a driver within the market. The software naturally lowers day-to-day energy usage of commercial buildings, which will lower overall peak demand-just not in a targeted approach. The ease of implementation and automatic nature of the technology also help make enrollment into demand response programs much more attractive to customers.

Adoption, Role of account Manager

Although clear financial benefits come with demand response, intangible benefits also come with adopting energy management platforms.

Many of these technologies include a customer satisfaction tool for account managers. Take, for example, BuildingIQ’s solution that several utilities use. With the platform, account managers report that they better understand how energy is being used, are helping clients make better energy management decisions and are providing overall higher levels of customer service.

Because the software is automated, it also does not require labor hours from customers’ facility managers or building engineers. Their time can be allocated to more important tasks, creating an additional value utilities can provide to clients. More utilities are starting to offer this technology to their customers, and facility managers can deploy this solution on their own, as well. The ability to add transparency to energy usage is vital to key operational decisions.

The value of this type of software also can be shown through built-in measurement and verification features. A software solution with these capabilities can identify the savings that it specifically generated and verify the ROIs, which then are displayed to facility managers, building engineers or building owners in user-friendly reports and dashboards. This further promotes the benefits that local utilities have provided to customers. This new level of transparency allows utilities to better express the value they are creating and better use existing demand response programs.

Scalability, Creation of Smart Cities

Implementing energy management platforms into commercial buildings is not capital-intensive, does not require changes to existing infrastructure and does not require a lot of time to become operational. These all indicate a scalable solution, which has allowed some utilities to implement the technology on a city scale. The technology adds intelligence into structures, which leads to smart buildings, and by networking these to utilities, it also creates the foundation for smart cities.

A second important component to smart cities is distributed generation, such as solar and batteries. These distributed technologies give advanced energy management platforms another optimization input to leverage within their approach. Solutions will evolve to use this information as it becomes more readily available and can regulate total load.

The ability for utilities to visualize this activity and better use distributed generation without upsetting the grid will become essential as it continues to be more readily adopted.

Next-generation cloud-based software will better provide utilities with a full, controllable load profile that will give them consistency, comfort and the ability to effectively manage their day-to-day business easily and seamlessly.

Michael Nark is president and CEO of BuildingIQ.

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