New FERC Order expands the reach of demand response

Posted on by Kelly Yazdani

This past Thursday, the Federal Energy Regulatory Commission (FERC) ruled to unify the treatment of distributed energy resources. Up to this point, states could opt-out, banning the participation of distributed resources in the wholesale power markets serving their local customers. What this meant practically for large commercial, industrial, and institutional organizations was that sites in certain states could not capitalize on their operational flexibility. According to Gregg Dixon, Voltus CEO, this historic FERC ruling “eliminates the antiquated local barriers that have prevented these distributed energy resources from delivering and receiving value in every wholesale power market in the United States.” Put simply, states can no longer opt-out.

Jon Wellinghoff, the former FERC Chairman commonly referred to as the “godfather” of demand response, also puts this ruling into perspective. “This ruling is the single most important decision in FERC history. By cementing the place of distributed energy resources in wholesale markets, we have taken a leap toward ensuring reliable grids and a clean energy future.” Wellinghoff, who refers to demand response as the “skeleton key” of the clean energy transition, speaks openly about the need for this balancing resource to allow for the widespread adoption of renewable energy.

Yet our work is not done. It will be 90 days before this ruling is written into law, and wholesale market operators then have up to nine months to submit compliance filings on how to modify the tariffs to enable these resources. Voltus is working closely with the appropriate grid operators to expedite implementation, expanding the financial opportunities for multi-site customers, as well as single-site organizations within these localities. Despite these short-term limitations, Dixon writes that the long term vision for Voltus is clear: “Our team and platform are ready to accelerate the energy transition, unlocking the value of distributed energy resources in every state.”

Interested in cashing in on your operational flexibility? Reach out to our team at info@voltus.co to learn more about the opportunities available to your organization.

Bright, Gritty, and Good: Reflections from a Voltus Intern

Posted on by Kelly Yazdani

Nearly 9 months ago, I started my internship at Voltus as a junior in college with almost no idea what I wanted to do professionally. I only knew that startups were generally appealing to me and that I wanted to work alongside passionate people to make the world a better place. As idealistic as it sounds, I found all of that and then some over these last few months at Voltus. 

Voltus’s mission is beautifully simple and incredibly effective – bringing cash to customers with operational flexibility through innovative demand response programs. The inevitable side effects are balancing the grid, increasing energy reliability while reducing prices, and eliminating emissions from dirty peaking power plants. I’ve seen Voltus help keep the lights on in Alberta during a dangerous cold snap and in California during a historic heatwave. I’ve helped enroll customers big and small in programs all across the country, putting much-needed cash back into local economies and even helping save jobs during a global pandemic. Voltus as a company truly embodies the values that it preaches: bright, gritty, and good. 

The personal impact of my time at Voltus is unlike any job I have ever held. I have had the privilege and the opportunity to master a new programming language, design and automate internal processes, practice valuable data management and analysis skills, and learn how to communicate and present my ideas with confidence. I’ve challenged myself and been pushed by my colleagues to work hard, look at problems in different ways, and develop creative solutions. Voltus has given me all the tools I need to be a successful professional in any field, all while working on my own time, traveling, and benefitting from the support of the greatest team I have ever worked with. 

It was an easy decision to skip a semester of online classes in order to continue my internship at Voltus. It was even easier to keep working my hardest at Voltus when my planned summer internship was cancelled. Nine months later, I am not so uncertain about what kind of work I want to do and what kind of company I want to work for, and I am so grateful for the chance to be a Voltan.

John Arcona

Energy Markets Intern

Interested in joining the Voltus team? Visit our Join Us! page to learn about current opportunities!

Capturing New Value in PJM with Technology-Enabled DR

Posted on by Kelly Yazdani

Two truths and a lie time.

  1. Synchronized Reserves (SR) is PJM’s most lucrative demand response program.
  2. Businesses can now earn up to $70K/MW-year for less than 2 hours of annual demand reduction.
  3. Voltus provides its enabling technology free of charge.

Did we get your attention? Good because it was a trick question! All three of these statements are in fact true, making SR a no-brainer financial opportunity for commercial, industrial, and institutional customers in PJM.

The increased value of SR came out of a May 21st ruling from FERC, which resulted in a tripling of program value. This is particularly noteworthy, because for the first time in history, SR is now more valuable than PJM’s Emergency Load Response Program. Sync Reserves is also incredibly customer-friendly with unrivaled flexibility for program participants – customers come in and out of the market as they wish. We have certain customers who don’t participate on Wednesdays, others who don’t participate from Thanksgiving until New Years, and others who decide on a daily basis whether they can participate the following day.

Given high payments to customers, demand response events that last all of nine minutes, and the ability for customers to select the hours in which they can be dispatched, it’s not a surprise that Voltus has enrolled over 100 MW of capacity in this program since May. That’s millions of dollars in the hands of PJM businesses. Eager to cash in on this new opportunity? Email us at info@voltus.co to learn more or register to attend one of our upcoming webinars.

Bright, Gritty, and Good: Remote by Design

Posted on by Kelly Yazdani

There are many things that have changed since COVID-19 put the world on lockdown last month. Life has s-l-o-w-e-d d-o-w-n dramatically for many of us, bringing a throwback to days of old when travel and transport were limited, and human life centered around the home. There has also been a dramatic shift in work patterns. Since mid-March the number of employed Americans who have worked from home has nearly doubled – sitting at a whopping 62%.

The lives of Voltus employees have been impacted by this pandemic as well. A member of our engineering team literally had to flee Europe, getting on one of the final flights back to the US before the borders were closed. Our New Yorkers have been completely homebound – no walks, no fresh air, no people for over a month. Working parents are homeschooling their kids. People are geographically separated from their partners, forced to stretch even further the definition of a long-term relationship.

We did have one thing going for us when the storm hit. Voltus has always been a completely remote company; Voltans work from home by design. While many companies are scrambling to find ways to keep their employees safe and working during COVID-19, we have been able to proceed, business-as-usual. As a result, our team has remained healthy and productive, allowing us to devote our energy to helping our customers when they most need it.

Being remote by design has its benefits outside of a pandemic-scale crisis. Our customers are evenly distributed throughout the US; having a distributed team allows us to be closer to these customers and serve their needs with more immediacy. The money we would otherwise use for real estate overhead is freed up to directly reward our employees, shareholders, and customers. Being remote also allows us to build the best team, independent of geographic restrictions.

In this segment of our Bright, Gritty, and Good Vlog series, designed to give a sneak peak into Voltus culture, we take a closer look at the remote office set-ups of four Voltans, discover what motivates them, and discuss the advantages and disadvantages of remote working. Click on the pictures below to learn more.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interested in learning more about life as a Voltan? Email us at info@voltus.co or chat with us by clicking on the green conversation bubble in the bottom right hand corner of your screen.

Week #7 – Portfolio Aggregation vs. Single Site Nomination

Posted on by Kelly Yazdani

💡Take home: If you are a multi-site demand response customer, you can financially benefit from portfolio aggregation versus single site nomination. Let’s show you how by asking a simple math question.

What is the average of 80% and 120%?

If you said 100%, you would be mathematically correct, but you’d be wrong from the standpoint of how most multi-site customers are compensated for demand response curtailment. Rather than paying customers based on their aggregate performance, most demand response providers pay multi-site customers on each site’s performance and keep the value of aggregation for themselves. Let’s take a closer look.

You have two properties: Site A and Site B. Site A performs at 80% and Site B performs at 120% during a dispatch. Your DR provider, through the benefit of aggregation, is able to use the overperformance of Site B to make up for the underperformance of Site A. In fact, as an aggregator, they rely on this phenomena. 

Sadly, this benefit doesn’t always trickle down to the customer. Aggregators often pay each site up to their given enrolled amount: Site A would be credited 80% and Site B would be credited 100%. This averages out to a 90% payment to the customer. 

The difference for the customer can be quite substantial. For a customer in NYC with a 1 MW nomination, performance aggregation can result in an additional $24K, or roughly a 9% increase, in value.

At Voltus, we nominate multi-site customers in aggregate and pay in aggregate. Of course, there may be exceptions if markets don’t allow for aggregation but you’ll know that at the start. This allows our customers to cash in on the benefits of overperformance at a given site. 

Interested in learning more about how we double demand response dollars for our customers? Email info@voltus.co or reach out on chat below.

Week #6 – Working with multiple CSPs to maximize DR dollars

Posted on by Kelly Yazdani

Potential Customer: Can my company work with more than one curtailment service provider (CSP) to stack multiple demand response (DR) programs and maximize earnings?

Voltus: Yes. Well … maybe. 

Nearly 140 demand response programs exist across North America. Many of these programs are offered exclusively by Voltus while others aren’t offered by Voltus at all. What’s that now?

That’s right, in some cases a DR program is offered only by a utility or even a competing CSP. No matter, Voltus lays out all the options for monetizing your operational flexibility and supports your participation in every program with our technology and services. 

Conversely, we often talk to customers who are currently under contract with a different CSP and are interested in contracting with Voltus to cash in on additional programs. Is that allowed?

From Voltus’s perspective, of course. The caveat here is that you need to make sure you are not prevented from doing so under your current CSP’s contract. We always advise customers to make sure that any new program they sign up for at a facility doesn’t preclude them from participating in other programs with other providers. We’ve run into many unfortunate situations where a customer signed up with a CSP and gave them exclusivity over not only a single facility’s ability to participate in DR, but exclusivity over DR for all of their facilities … unbeknownst to them.

So, let’s look at a real world example. Voltus works with a large commercial real estate company with properties throughout the United States. This customer is very sophisticated and wanted to take full advantage of every stackable DR program in the PJM service territory, specifically Pennsylvania. In Pennsylvania, a customer can take advantage of seven separate demand response programs simultaneously. Unfortunately, the company’s CSP at the time had exclusive rights to all DR programs at each of the company’s facilities under a contract that had been signed three years prior for a five year term. The larger problem was that the CSP only offered two of the seven programs and wouldn’t cooperate in allowing the customer to participate in the other five programs. In fact, the CSP claimed that by tapping into other programs the company was putting their current DR earnings at risk (fake news).

In this particular case, the CSP had enrolled the customer in PJM’s ELRP program and signed them up for economic DR to capture energy payments. As it turns out, the more lucrative option for the customer was a combination of Pennsylvania Act 129 DR, Voltus’s Peak Saver program, and PJM’s synchronized reserves program. We showed the customer that they would more than double their demand response dollars by enrolling in these additional programs. We also helped the customer negotiate away from exclusivity with their original CSP. Amazingly, participation in these additional programs actually increased the company’s earnings in the two original programs – a win-win-win for all parties involved!

Of course, every region is different and every CSP is different so it’s important to dig into the details.

  1. Make sure you’re not limited by current terms and conditions in your DR agreements.
  2. Make sure you’re taking advantage of every stackable DR program.

In the end, the best strategy for you business may be to use two (or more) CSPs. We’re indifferent as long as you’re maximizing your demand response dollars.

Interested in doubling your company’s DR dollars? Email us at info@voltus.co or chat with us below.

Week #5 – Uncovering the Gross Up

Posted on by Kelly Yazdani

At Voltus, we talk to hundreds of energy decision makers every day from dozens of industries in every major energy market. Sometimes these organizations are learning about the benefits of demand response for the first time. At other times, we’re connecting with businesses long-steeped in demand response program participation. Our message, regardless of experience, is that it is possible for customers to double their demand response dollars, and one of the easiest ways to contribute to this goal is giving demand response customers their fair share of the “gross-up.”

What the heck is the gross-up!?! 

So glad you asked.

The gross-up is industry-speak for the transmission loss factor and operating reserve margin that is applied to electricity demand in wholesale power markets. These concepts impact the value of demand response resources in these same markets.

The bottom line: if you’re not being paid your portion of the gross-up you could be losing 5% to 40% of your demand response dollars depending on year and market.

Let’s look at an example to understand the concept clearly.

You have 1,000 kW of demand response capability at your facility. You contract with a demand response provider to get 65% of the revenue earned from enrolling your load curtailment in the ISO-NE market. At $7.03/kW-month you would expect the gross revenue from the 1,000 kW to be worth $84,360 for power year 2019, which at 65% nets your business $54,834. Pretty good, huh? Yet, your demand response capability is actually more valuable than 1,000 kWs and here’s why.

When power is generated by a natural gas power plant, 7% of that power is lost on average over transmission lines (a 100 MW generator only delivers about 93 MWs of usable electricity to the point of consumption). Additionally, that natural gas power plant isn’t 100% reliable throughout the year, which requires the grid operator to buy, on behalf of the market, what’s called “operating reserve.” Operating reserve averages about 15% of generation capacity (that 100 MW generator requires the grid operator to purchase 115 total MWs of generation). These transmission line losses and operating reserves add up, amounting to an additional 22% in this example. 

Demand response capacity behaves differently though since it’s created at the point of consumption. This capacity doesn’t experience transmission line losses and doesn’t require operating reserves. As a result, the grid operator in our example would “gross up” the value of your 1,000 kW demand response capacity by that same 22%. The demand response provider is actually credited with 1,220 kW (1,000 kW plus the 220 kW gross up). In many cases, demand response providers only pay the customer 65% of the “nameplate capacity” (the original 1,000 kW). The additional $18,559 of value that comes from the 220 kW gross-up goes entirely to the demand response provider. 

You can do the math to determine the true revenue share, but in this example it amounts to 53% to the customer, not the expected 65%.

Gross-up values can vary significantly by wholesale market, the particular power year, and the customer’s transmission level service. Regardless of the exact value, the gross up is money that shouldn’t be left on the table. If you’ve been doing demand response for a long time and you’re looking to maximize cash from your operational flexibility, ask your demand response provider for your share of the gross up.

At Voltus, we value transparency above all else. Interested in working with us or learning more about the many ways you can double your demand response dollars? Email us at info@voltus.co or chat with us below.

Voltus Announces New DR Opportunities in Massachusetts

Posted on by Kelly Yazdani

Boston, MA – March 24, 2020 – Voltus, Inc. announced today that it has secured an agreement with Cape Light Compact to deliver demand response to commercial, institutional, and industrial customers in Cape Cod and Martha’s Vineyard.

This agreement marks Voltus’s latest partnership to help utilities and energy efficiency program administrators meet regulatory requirements, increase customer satisfaction, and ensure grid security while putting more cash and technology on the table to incentivize customer participation in demand response.

“In the past two years, we’ve secured relationships with more than a dozen major utilities in North America.” said Dana Guernsey, Vice President of Product and Energy Markets at Voltus. “These agreements not only open up revenue streams to energy intensive industries, but strengthen the relationship between the energy efficiency program administrator and its customer base.”

“We are excited to bring on Voltus as a partner in our demand response programs,” said Austin Brandt, Senior Power Supply Planner at Cape Light Compact. “Reducing peak demand benefits all electricity customers, and having Voltus as a partner will facilitate our ability to provide cost-effective demand savings while delivering value to both the businesses participating and all ratepayers.”

With the addition of the Cape Light Company program to Voltus’s CashDash demand response planning app, customers now have close to 150 demand response programs to choose from. Demand response programs, when stacked, can offer more than $500,000 per MW-year in value for eligible customers, depending on their location and operational flexibility.

To sign up or to learn more, email info@voltus.co

About Voltus, Inc.

Voltus represents the “potential of us”​ to better manage energy through simple, cost and risk-free demand response programs. Our commercial and industrial customers generate cash by allowing us to maximize the value of their operational flexibility in energy markets. It’s this simple: a customer signs up with Voltus and every quarter we deliver dollars. Voltus makes money when our customers make money by sharing the cash generated from working together. What’s more, there are significant community benefits that accompany working with Voltus – a cleaner, more reliable energy future and dollars invested back into your business instead of being wasted on a larger energy bill.

Voltus Media Relations:

Kelly Yazdani
703-340-9353
kyazdani@voltus.co

Week #4 – Flushing out Phantom Megawatts

Posted on by Kelly Yazdani

In the early days of demand response, as grid operators and utilities sought to unlock the potential of this resource, program requirements were understandably light. Advance notice was often day ahead, dispatch windows were Monday through Friday 9:00 p.m. to 5:00 p.m., hours of dispatch were limited to 20 hours per year, etc., and rarely was demand response dispatched for anything but an annual test. With such a low barrier of entry, customers signed up in droves. The net effect was quite remarkable as demand response became the fastest growing capacity resource in the US since 2000 with the exception of wind.

As demand response became a larger percentage of the resource stack, grid operators started dispatching these resources regularly, deliberately, and at increasing frequency to deliver very valuable capacity, energy, and ancillary services. A single annual test became a thing of the past. Customers are now being called on to curtail load or transfer demand to behind-the-meter assets many times during the year. Under-performing “phantom megawatts” that flew under the radar in the early days of demand response can no longer meet market requirements.

Demand response is needed more than ever to deliver on-peak capacity, to help tamp down energy prices during grid constraints, and to help balance the grid 24/7/365 in real-time through frequently dispatched operating reserves programs (e.g. PJM Sync Reserves). As a result of more stringent program requirements, the value of demand response is also on the rise. For the strongest-performing demand response resources, capable of adapting to increased demand response requirements, this means more cash for curtailment, often more than double what was available in the past.

Demand response has come of age. If your business is ready to truly offer up your operational flexibility to the grid (and make cash in the process), email us or chat with us by clicking below.

Week #3 – Incremental Auction Sell-Off (Don’t Get Caught Holding an Empty Bag of Cash)

Posted on by Kelly Yazdani

Using a bit of provocation, last month we declared that PJM Demand Response is Dead! The caveat here is that PJM Demand Response (as you’ve known it) is Dead, with changes to the Emergency Load Response Program (ELRP) that make it much more difficult for customers to perform and, ultimately, earn cash (e.g., a 30 minute response with 365/24/7 availability doesn’t work for most). 

Our webinar, outlining these changes, and highlighting our out-of-market PeakSaver Program, occurred a few weeks before the close of PJM’s 3rd incremental auction (IA). These incremental auctions give capacity providers, who made commitments to provide capacity three years ago, the opportunity to sell their positions back to the market. Given the changes to ELRP, we had a company-wide hypothesis: curtailment service providers (CSPs) will offer thousands of megawatts back to the market during the 3rd IA, ultimately mitigating their risk of portfolio underperformance under stringent new “capacity performance” program requirements.

There is an important phrase in that last sentence though – mitigating their risk. If a demand response provider unloads their position, what happens to the customer who is expecting to get paid for ELRP program participation in 2020? When the CSP liquidates their position in an IA, the CSP is paid, but the customer’s obligation to perform, and their earning potential, is gone. 

Last week, the results were posted and our theory held true: 4,500 MWs of generation capacity, a large portion of which represents demand response, was sold back to the market, dumping many CSPs’ commitments to deliver for the first full “capacity performance” year (starting 6/1/2020). This capacity offloading is a clear sign that the new capacity performance rules prove too risky and costly for many in-market demand response MWs. Commercial and industrial customers who were expecting to generate revenue for the upcoming power year may find that their position was sold out. The CSP will pocket 100% of the profit, leaving the customer with nothing.

What now? Given these results, CSPs are scrambling to figure out exactly how to maximize the profitability of their portfolio and will only retain the best performing customers into the new power year. Don’t get caught holding the bag. All customers should contact their CSP and get a written confirmation of their position for the upcoming summer. 

Most importantly, sign up for out-of-market demand response. Voltus’s PeakSaver program can be stacked with in-market programs and provide a clear path to cash this summer. Because the program is market independent, you can enroll at any time, doubling your demand response dollars for the coming year. PeakSaver provides a no cost, no risk approach to demand response that proves far more reliable than many in-market programs.

The only bag you should be holding is the one filled with money. Contact us at info@voltus.co or chat with us by clicking on the icon on the bottom right of your screen to get yours.

This post is part of multi-week series dedicated to “Getting the Most Cheese from Demand Response.” Check out Week 1 on Eliminating Capacity Charges and Week 2 on In-Market versus Out-of-Market Demand Response.