Businesses’ willingness to reduce their consumption will earn them savings and money: here’s how!
Published on Wednesday, 29 April 2020
The rise of renewables and the growth in global demand for energy on the one hand, and digitalisation and the electrification of consumption on the other, are transforming and decentralising the energy market. In this context, the ability to consume and generate energy shrewdly and flexibly is crucial to businesses’ competitiveness. Demand Response (DR) programmes are now the best answer to this issue.
Demand Response rewards businesses for their willingness to temporarily lessen or increase their energy consumption at the request of the network operator during peak periods of either demand and/or supply, thereby making the grid more stable and flexible and ensuring that the energy infrastructure is used more efficiently. This is a cutting-edge solution that guarantees a balance between supply and demand in a rapid and economically advantageous manner, maximising returns for grid operators and businesses alike, by decreasing costs and consumption and accelerating the decarbonisation process.
So how does DR work? When the operator identifies a peak or spike in energy consumption that might cause a grid stability problem, they send a balance request to the Balance Service Provider, a utility company that supplies energy flexibility on the dispatching services market. The Balance Service Provider issues a balancing order to client companies who manually or automatically implement the modulation, i.e. the reduction or increase in load or production, for a short period of time, thereby stabilising the grid. In exchange, the client receives an agreed financial compensation: payment for willingness to modulate the energy load and further remuneration when balancing orders arrive based on the amount of energy saved.
This allows excess demand to be met without any need to increase energy production which might mean using expensive and polluting sources. Payment aside, companies that sign up to DR programmes also have the advantage of being able to choose which times of the day to allocate their energy load to guarantee themselves the best savings and thus respond most effectively to the operator’s requests at peak times. This means they use less energy, in addition to paying a lower price for it.
The revenues guaranteed by DR can also be reinvested in energy management and optimisation software, centralised management programmes for bills, audits and other consumption efficiency-boosting services that translate into more savings. These benefits are multiplied further still if the DR programme is part of the client’s wider efficiency strategy that also includes photovoltaic self-generation and lithium ion battery storage systems.
There is a preparatory phase before a client joins the DR programme during which a team of energy management experts works with them to establish the best way to reduce non-essential energy consumption. Using an automatic system of cloud-based apps, sensors and algorithms, the machinery and equipment that use energy are monitored constantly to establish the energy usage plan that best suits the business. At this stage, many facilities discover that, in order to join the programme, they need only shift high energy usage processes by a few hours or transition to backup or storage systems, if available, which further boosts the efficiency of the entire process. This is thanks in part to the fact that they can see real time consumption monitoring and consumption data in the DR context.
Lastly, the programme helps to increase companies’ resilience and sustainability: participants get advance notification of grid stability problems and can prepare themselves to deal with potential outages or blackouts. DR also improves demand flexibility, thanks to the growing choice of supply from renewable sources: when production is high, the amount of clean energy being fed into the grid can be increased and when it drops, excess photovoltaic or wind power stored in storage devices can be used.
With a managed capacity of over 6 GW and a global market share of 12%, Enel X is the world’s leading Demand Response programme operator. Through its e-Industries business line, it offers large commercial and industrial customers a complete range of flexible, platform-based leading-edge solutions which, based on a 360-degree analysis of their energy portfolio, can maximise financial returns, reduce costs and risk exposure, and help them exploit market-specific trends and the regulatory environment in which they operate more efficiently, while at the same time pursuing sustainability goals.
Indeed, the benefits of DR affect the entire energy ecosystem. DR enables companies to help make the electricity grid greener, more reliable, more efficient and more economical by limiting both peaks in demand and price.
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