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Benefits of Participating in a Demand Response Program

You may be wondering, “what is demand response and should I be paying attention to the potential benefits?” The answer to the latter part of that question is: yes, but let’s tackle the former first.

What is Demand Response?

Demand response is a financially rewarding energy solution that reduces your organization’s energy usage during periods of high stress to the electric grid.

During periods of high demand for electricity, the grid becomes stressed, which can have a number of residual effects, including brownouts or blackouts, higher energy bills, and sustained increase of electricity prices, to name a few. The simplest example of course is on the hottest and coldest days of the year, when electricity spikes put stress on the grid; but year-round, demand response programs seek to balance supply and demand, level out electricity spikes, avoid brownouts, and reward participating customers in the process.

Simply stated: reduce your energy consumption during peak demand and get paid for using less. It’s a veritable win-win, with the electric grid achieving balance while avoiding brownouts, and your organization reaping the financial rewards in the process.

How Do Demand Response Programs Work?

It all comes back to supply and demand. One option for the utility to better accommodate increased demand usage is to increase supply by building more power plants, which carries a hefty price tag and adverse environmental impact. Demand response works on the opposite end of the spectrum, with an aim to reduce demand rather than increase the supply.

By participating in demand response, clients benefit from both the compensation they receive from the programs and a reduction in capacity tags they receive for lowering usage during peak hours. Companies may also aggregate their load-reduction capability across multiple locations, maximizing the financial incentives and contribution to grid reliability. Ultimately, such programs can lead to lower retail rates by lowering the cost of electricity in wholesale markets. By executing a demand response program, you’ll not only be creating a financially viable outcome for your organization, but one that benefits the health of the grid and the environment too.

What Are the Benefits?

Benefits include substantial bill savings, cash earnings and decreased energy costs, with financial results ranging from 5% to 30% of the annual electricity bill.

Additionally, benefits include:

  • A cash flow positive sustainability program.
  • Contribution to the stability of the power grid by helping to prevent power failures.
  • Advanced notification of potential blackouts or brownouts.
  • No geographic limitations: availability in both regulated and deregulated markets.
  • Environmental stewardship by reducing demand instead of increasing supply.

Bottom line: Demand response programs can offset and reduce energy expenses and can even produce a new revenue stream.

What That Means for Your Organization

For large electricity consumers, particularly where electricity usage is consistent, it could be as simple as not running or curtailing energy usage during certain times of the day during peak events. In addition to realizing the savings associated with your energy curtailment, you’ll also receive payment for doing so, allowing you to maximize earnings while minimizing operational disruption.

APPI Energy will compare offers from multiple curtailment service providers (CSPs), finding the program with the most benefit for your organization. Our team of experts will analyze your facility and provide tailored solutions for an energy curtailment plan that makes the most sense for your organization. Programs can also be automated, with semi-annual payments to your organization once enrolled. 

We identify where you can curtail energy usage while still meeting your daily operational demands. Our holistic and comprehensive approach positions you for savings and earnings, while minimizing risk to grid disruptions.

Contact our team today to learn more:

800-520-6685 | energysolutions@appienergy.com