Demand Response Sees Record Activity Amid Shutdowns and Heat Waves

Demand response (DR) is a crucial tool for utilities and grid operators to help ensure stability in the face of grid stress, and this summer in particular has shown the importance of DR. As heat waves arrived throughout June and July and complications from coronavirus shutdowns have created additional uncertainty, demand response activity has been up significantly in many parts of the country.

DR Activity Increases

At Enel X, June 2020 had the most demand response dispatch activity of any June in our history, and by late July were on pace for another record month. Some noteworthy occurrences:

• In New York City, there had been 13 dispatch events for 52 total hours by late July. 
• On July 11 and 12, the Salt River Project in Arizona set a new record for their all-time peak load, which led to a dispatch on July 13. 
• In Ontario, an early July heat wave, coupled with Industrial Conservation Initiative (ICI) peak hiatus, led to the highest peaks in 7-years on July 6 and July 7. The Independent Electricity System Operator (IESO) declared an Emergency Energy Alert-1 (EEA-1) both times, which led to demand response dispatches. This was the first time the IESO DRA program was dispatched for emergency purposes.

Enel X Customers Perform Well

Paul Miles, Manager of DR & Load Response Programs for PECO Energy, told us by email that demand response programs have undergone many changes over recent years. He mentioned the importance of curtailment service providers actually achieving the reduction in load they pledged.

“While there are many curtailment services providers (CSPs), there are only a handful with the scale, business models and capability to extract the best DR value proposition for all participants,” Miles said. “Conversely, some business models treat DR as a voluntary resource, placing participation squarely in the hands of their customers. This approach does deliver value and subsequently may yield lower reductions in load than were previously expected or committed to for a given event.”  

The comments from Miles on demand response are especially relevant this summer, with the dramatic changes that have occurred for businesses since coronavirus. But despite the uncertainty, our customers have performed well during demand response events this year. 

We’re extremely thankful to our customers and proud of what we’ve been able to contribute to the grid. To navigate this summer, we’ve worked both with utilities to help provide flexibility to our customers, and with customers to understand their new load patterns and how much they can curtail. 

Our Data Mirrors a Common Trend: Average Demand Is Down, But Peak Demand Remains High

When we last looked at energy data during the coronavirus, the biggest story was the drop in average demand. Average demand is still down—in the contiguous United States since May 31, Bloomberg NEF’s data on U.S. power finds that average demand is down 3.7% versus what it calls “business as usual” expectations. 

But in many areas of the country, peak demand is as high as normal, and in some cases higher. Peak demand is a factor in some demand response programs, so that may be part of the reason for the increase in DR activity. 

Internal data from our commercial and industrial customers – who represent approximately 2% of demand across USA and Canada—shows, on the left, that average demand is broadly down for nearly every industry year-over-year between March 1 and August 3. But our data shows many companies’ facility peaks are higher than they were last year.