Importance of Demand Response (DR)
The electrical grid is under increasing strain due to factors like population growth, reliance on electricity, and the integration of renewable energy sources. This, coupled with aging infrastructure and extreme weather events, can lead to peak demand periods that overwhelm the grid and cause blackouts. Emergency demand response programs offer a highly cost-effective solution. By enabling utilities to reduce peak demand during critical times, these programs can help prevent blackouts. While for businesses, participation in these programs can result in significant cost savings.
Please visit our page for your utility provider (shown on the right) or their website for more information on your utility's offerings. The following flyer summarizes many Michigan and Indiana utility emergency demand response programs.
How Does it Work?
Emergency demand response programs are a collaborative effort between utility companies and consumers (all commercial, industrial and residential) to ensure grid stability. Event-driven programs incentivize participants to temporarily reduce their energy use during critical peak hours, also known as "event days." Event days are typically pre-announced and limited in number throughout the year to minimize disruption.
Unlike event-driven programs that wait for specific triggers like seasonal spikes, another type of program is the continuous demand response programs. These are constantly on the lookout for ways to reduce energy use. This means they can take advantage of changing conditions, like fluctuating electricity prices based on time of day, market rates, or specific tariffs. Instead of waiting for a pre-defined event, continuous demand response allows facilities to adjust their energy consumption on a daily basis depending on the current utility costs, potentially leading to significant savings.
Benefits:
To encourage participation in both types of programs, utilities offer different rewards like billed credits or lower rates during peak demand periods. Businesses can achieve these reductions through various strategies, such as adjusting production schedules, powering down non-essential equipment, or implementing energy-efficient practices. By collectively reducing demand during peak times, these programs help alleviate pressure on the grid, preventing outages and ensuring a more reliable electricity supply for everyone. Ultimately, emergency demand response programs are win-win situations: participants benefit from financial incentives, and the grid gains much-needed stability during periods of high stress.