Smart Grid – Automated Demand Response

If I asked five different people to tell me what the “smart grid” is, I would probably get 5 different answers and they all may be at least partially correct. The fact is the smart grid is not a simple thing to describe and it will be even more complex to create.

So many people don’t think twice about how energy is made and gets to us. Plug something in and electricity is there, whenever it’s needed. However, as we Americans turn to electricity to do more and more including power our cars and we want to integrate unpredictable energy sources such as wind and solar, we will need the grid to be able to scale and adjust to meet the new and much more dynamic needs.

The way the grid works today, as demand for energy increases each day, the companies who generate power must increase output. Those companies have a pretty good idea of how much energy is needed day to day based on many factors… the history and the weather among other things. Some days when demand rises beyond the electric company’s initial ability to generate electricity they need to bring some more generation online from somewhere. They could buy it from another utility; they could bring online peak sources of their own. Usually the peak sources are very expensive and not as good for the environment. It would be better if there were other sources… and in the context of the smarter grid utility companies need to turn to your business.

So now you might be wondering what any of this has to do with you and your multi-site retail business. You probably don’t have a solar array on your rooftops, or windmills in your parking lots. While those could provide clean energy, they are a totally different conversation. The utilities will turn to you for demand response. What is demand response? It is a program in which the utility will send participants a signal to reduce their energy consumption instead of the utility increasing the supply of electricity. In other words, your building acts like a “virtual power plant.” The participants will have a short amount of time, anywhere from 10 minutes to a few hours, to reduce their usage. The utilities typically compensate well for participation which makes it worthwhile for the participants and the utility.

It might sound a bit complex, and if you have multiple sites in multiple areas and you need to be able to respond in a short time frame it may also sound nearly impossible to implement. Well, that is where automation comes in to play. When you can program your energy management system or building automation system to take the signal from the utility and automatically run the program that cuts a certain amount of kW of usage based on business rules AND you can aggregate the reduction over all the sites in that utility’s area suddenly not only is it feasible… its attractive.

The white paper "A Retailer's Guide to Achieving Smart Grid Benefits Today" takes a step-by-step approach.