Curbing Energy Use During Peak Demand Periods Reaps Economic Benefits I Illinois & Massachusetts

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Analysis of peak demand periods shows cost benefits for energy users

A recent Advanced Energy Economy report, prepared by Navigant Consulting, finds significant economic benefits take place in Illinois and Massachusetts while curbing energy use during peak demand periods.

electric utility meters shutterstock_202523926According to AEE, demand response (DR) services enable utilities and grid operators to curb energy use by relieving stress on the electricity distribution system. By compensating commercial, industrial, and residential customers for curbing their electricity use during times of peak demand, economic savings are achieved.

In the complex and continuous challenge of energy use and grid management, grid operators manage DR compensation through wholesale capacity markets. Peak load reduction measures are then customized for commercial customer facilities. Proactive measures can include turning lighting, air conditioning, pumps, and other non-essential equipment down or off without affecting business operations, comfort, or product quality.

DR also concerns residential grid customers. Residential changes include advanced metering infrastructure, and two-way communicating load switches and smart thermostats are now facilitating effective demand response programs for participating energy use households.

The Navigant report, titled Peak Demand Reduction Strategy, shows states which adopt standards for reducing peak demand through DR can significantly reduce costs for customers, strengthen reliability of electric service, and ease compliance with EPA’s Clean Power Plan.

Researchers looked at the feasibility of utilities to procure the resources to meet demand reduction goals over 10 years. In each of three scenarios (low, medium and high), the cost-benefit ratio is highly positive, with the ratio of benefits to cost increasing as the standard rises.

“Specifically, in the medium scenario, where demand is reduced 0.25% per year over 10 years, Navigant concluded that the cost of every dollar invested in demand response programs is outweighed by benefits totaling $3.53 in Massachusetts., and by $2.66 in Illinois,” reported Monique Hanis from AEE.

“This month, the Massachusetts Department of Public Utilities (DPU) will receive final three-year energy efficiency plans from the Commonwealth’s utilities,” explain AEE in the accompanying press release. “These plans, and the approval process of the DPU, will determine the size and design of the DR market moving forward.”

Meanwhile, in Illinois, policy makers have for a year now been considering “comprehensive reforms” to the state’s energy policy, including the possibility of making changes to the state’s energy efficiency and renewable energy programs.

Image: Electric utility meters via Shutterstock 

Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

CleanTechnica Holiday Wish Book

Holiday Wish Book Cover

Click to download.

Our Latest EVObsession Video

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it!! So, we've decided to completely nix paywalls here at CleanTechnica. But...
Like other media companies, we need reader support! If you support us, please chip in a bit monthly to help our team write, edit, and publish 15 cleantech stories a day!
Thank you!

CleanTechnica uses affiliate links. See our policy here.

Glenn Meyers

is a writer, producer, and director. Meyers was editor and site director of Green Building Elements, a contributing writer for CleanTechnica, and is founder of Green Streets MediaTrain, a communications connection and eLearning hub. As an independent producer, he's been involved in the development, production and distribution of television and distance learning programs for both the education industry and corporate sector. He also is an avid gardener and loves sustainable innovation.

Glenn Meyers has 449 posts and counting. See all posts by Glenn Meyers

3 thoughts on “Curbing Energy Use During Peak Demand Periods Reaps Economic Benefits I Illinois & Massachusetts

  • This sounds like exactly the solution Tesla’s Powerwall is trying to address! Shaving peak time use down is better for everyone, but mostly for the stability of the grid.

    All the best,
    Aaron Lephart

  • Time of use metering needs to be implemented everywhere. It will make the grid much more efficient.

  • What?! ‘medium scenario, where demand is reduced 0.25% per year over 10 years’?
    Surely we can get it down by more than that or is that just peak utilities?

Comments are closed.