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Why Did Demand Response Events Increase in 2021?

See what Enel X data shows about the growth of demand response, and find out the themes behind the rising trend.

May 16, 2022
  • The grid is changing, and flexible resources like demand response are becoming even more important. 
  • Enel X data shows an increase in DR events over the past few years, and we see several themes behind this trend.
  • The importance of demand response is only becoming clearer, and participants are making important contributions to keeping the grid stable.


Growing Opportunities for Demand Response Participants

Demand response (DR) has long been a valuable tool for utilities and grid operators, and now they are increasingly using DR to respond to changes to the grid and increase reliability. In 2021, our data showed that demand response was more important than ever, and that is leading to more revenue opportunities for participants both now and in the future.


2021 Saw the Most Enel X DR Dispatches in Recent History

Enel X manages one of the largest demand response portfolios of demand response globally, offering a unique cross-section of demand response programs throughout North America. To compare data for the number of DR dispatches across the last several years, we looked only at a sample of programs that Enel X has participated in since 2017 to allow for an apples-to-apples comparison of programs over time. 

The trend in our data is clear—utilities and system operators are using demand response more than ever.

Chart showing demand response even count growth over time


Why Are There More DR Events?

These are aggregate counts of dozens of programs, and the reasons for these events vary between each region and each event. But at a high level, we’re seeing a number of themes across the country, including some of the following:


Extreme weather is part of the increase, but not all of it. The effects of extreme weather on the grid are varied and can be complicated. Fundamentally, though, extreme weather stresses the grid by affecting both demand (creating high demand for heating or cooling, for instance) and supply (extreme weather makes generation operation more difficult). 


Weather can contribute to grid stress in a variety of compounding ways. For instance, in 2020, extreme weather was a major driver of an increase in the number of California demand response events. Both heatwaves and the resulting wildfires had a part in it—the region had huge energy demand due to cooling needs during the heatwave, but the wildfires and heat put stress on energy generation equipment, and solar generation decreased as smoke clouds the sky. At times like this, demand response can be one helpful resource in the larger process of balancing supply and demand.


Even so, while such extreme weather events have led to many dispatches across the country, weather alone is not sufficient to explain the size of the increase. 


The flexibility offered by DR is crucial as more intermittent renewables come online. High levels of renewable energy can lead to the classic “duck curve” and other load shift patterns. The duck curve creates challenges for grid operators even on normal days because solar and wind, as intermittent technologies, are hard to predict. But on peak demand days where resources are stretched thin, the duck curve creates even more of a challenge. 


As states try to move away from more readily dispatchable supply like gas and coal, a cleaner option at times of real-time shortfall is to use resources like demand response. DR can help to lower demand on peak days where there are supply concerns – for instance, if a cloudy forecast leads to unexpectedly low solar generation.


Fast DR is becoming even more important as the grid changes. Not only are grid operators using demand response more than ever, fast dispatch programs specifically are increasing quickly.

Fast dispatch (Ancillary Services) programs have the same purpose of balancing supply and demand as day-ahead DR does. But as more intermittent renewables come on the grid, unexpected problems can arise quickly and require rapid intervention. As the name implies, these programs require faster response time, but they are in turn often more lucrative in payments. Many regions are increasing their fast dispatch payments and seeking out new registrations.


For example, in PJM, the fast-DR program in the Synchronized Reserve Market (SRM) has seen a large increase in dispatches, more than doubling since 2018.

Chart showing demand response even count growth over time in PJM market
Distributed energy resources (DERs) are contributing as well. It is clear that DERs like behind-the-meter energy storage or smart EV charging are important to the future of demand response, and could become even moreso with the approval of FERC Order 2222 in September 2020. Enel X had DERs in programs even prior to FERC Order 2222, and we’re seeing an increase in events among those program as well. Note that this data is based on a sample of Enel X programs, not comprehensive nationwide totals.
Chart showing demand response even count involving battery storage growth over time

Customer Contributions Are Crucial

Extreme weather is a danger to individuals in part because it’s a danger to the grid. It’s crucial to have reliable energy at all times for light, heat, and essential services during these events. We deeply appreciate the efforts of our customers to reduce their energy during these demand response events. It is no exaggeration to say that the contributions of demand response customers can be a very real part of keeping a local community safe during these events.