Week #4 – Flushing out Phantom Megawatts

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.

March 18, 2020
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Week #4 – Flushing out Phantom Megawatts

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.