Understanding Demand Response in Retail Electricity

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How does customizing your business’s energy bill sound? A Demand Response program is a great way to change how you manage your bill each month. These programs are often used by electricity operators to balance supply and demand, allowing “load relief” for our electric grid, and compensating you for your participation.

How Does It Work?

A Demand Response program is an opportunity for customers to get paid to curb their electricity use in response to economic or reliability signals. According to the Minnesota Public Utilities Commission, “Economic signals come in the form of electricity prices or financial incentives, whereas reliability signals appear as alerts when the electric grid is under stress and vulnerable to high prices.”

Here’s how it works: Power reduction or outages pose an extreme risk to many high-usage businesses, so to help that, Demand Response requires businesses to be able to shut off equipment or switch to backup generation during peak hours to relieve stress on the electric grid. Examples of this look like turning on your backup battery storage, adjusting your thermostat settings, or shutting off your company’s machinery.

To participate in a Demand Response program, you’ll also need to have an hourly interval meter in place. In most cases, Catalyst Power can have one installed for you.

The key takeaway is that joining a Demand Response program gets you paid for reducing your demand (electric usage) during peak hours. Yes, you can literally earn payments if you have the ability and willingness to reduce your usage for a period, typically 1-4 hours, given a day-ahead notice. These periods of time are generally summer weekday afternoons. Getting paid to save the grid? That’s not a bad deal! To top it off, Catalyst Power can also customize this process to tailor it to you and your business. 

Happy Planet, Happy Life

Aside from the very real financial benefits, the incentive behind participating in a Demand Response program is the positive environmental impact. The significance of reducing your electricity use during high peak times is that this is when the electric grid is under considerable strain from extremely high usage. This presents an issue for businesses when they inevitably use more energy than the grid is generating, leading to more blackouts and brownouts. Rather than build new generation to relieve the strain (which is costly and potentially dirty), customers are paid through Demand Response and other programs to curtail their usage during those times.

What Happens Next?

Once you switch off your energy, Catalyst Power can help your business stay operational during working hours. We can explore on-site solar generation and battery storage, which can be used as a backup source when a curtailment event occurs, allowing you to continue business as usual. Our innovative technology can test your curtailment efforts and monitor the exact level of reduction your business can produce. It’s almost as if we can predict your usage habits and save you time and money (spoiler alert: we can). Demand Response offers businesses a chance to alleviate their energy bill woes and earn a pretty penny in the process.

We’re bringing Demand Response to Catalyst Power. Stay tuned for future updates.