How Demand Response Will Shape the Future of Energy

Posted on January 06, 2015
Posted By: Wayne M. Kovach

An article on The Energy Collective explores the expectations for what the “next big thing” will be in the energy industry. The piece discusses how not one person in attendance at a recent energy conference could have guessed ten years ago that shale gas would be such a significant aspect of today’s energy industry. This led to the question, “What is the next shale gas?”

Key speaker Charles O. Holliday, Jr., chairman of Bank of America, answered that question by saying,
It’s energy efficiency. As you look at the technology available today that has not been connected yet, the opportunity of energy efficiency is tremendous. We see in this report an $8.8 trillion investment capability on good return projects over the next 15 years in energy efficiency.

The report is a collaborative effort by leaders in economics and business, focused “on the relationship between actions which can strengthen economic performance and those which reduce the risk of dangerous climate change.”

The shale gas revolution has polarized much of the world, especially within the northeast United States, where a predominant amount of fracking has taken place over the last ten years. Opponents argue that fracking does nothing but empower and enrich gas and oil companies, and risk contaminating the environment. Proponents defend studies that show fracking can be employed safely, and that it reduces our dependency on foreign energy sources. Whatever one’s stance is on this controversial issue, it doesn’t change the dynamic of it; fracking is happening and will continue to happen.

Renewable energy generation is still in its infancy, and while it has a promising future, it’s in no condition to satisfy electrical needs for the entire world. Indeed, fossil fuels are the perennial leader in energy consumption in the United States. The map below shows the most consumed fuel in each state.

Image courtesy of Movoto

Bridging the gap between the world’s dependency on fossil fuels and the quest for clean, carbon-reducing sources is critical if we are going to prevent further climate change.

Enter demand response, a panacea for energy woes.

No single solution will ever be enough to keep energy supply greater than demand, especially in a day and age dependent on so much stuff. A well-planned cohesion of electric generation sources must be used to keep the grid going. Fossil fuels still rule the roost, and likely will for many years to come, yet constantly receive a bad rap from people and organizations committed to moving to “greener pastures.” Is there a technology available that will help in our transition from dirty fuels to cleaner, more sustainable supply sources? Enter demand response (DR); a user-friendly service designed to stabilize the electric grid during times of peak demand. DR has been a market resource for many years, paying large-scale commercial and industrial businesses to reduce their energy consumption, most notably during the summer months.

As Holliday discusses, energy efficiency is the single greatest option our society can offer for electric stability over the next ten years. New technologies increase the demand for electricity. With demand response expected to double by 2020, it is in the perfect position to bridge the gap between the phasing out of old generation sources and the development of new ones. Energy efficiency programs designed for businesses, coupled with DR, can help create long-term, sustainable solutions for companies that are trying to stay competitive. These programs, including bill auditing, energy procurement, and smart meter services all lend themselves to a sustainable platform of intelligent energy usage.

Demand response is so easy, anyone can do it.
Demand response is primed to be a leader in energy efficiency over the next decade due to its ease of use. The program requires no additional energy source in its operation. Only when a company chooses to utilize a generator to sustain critical operations would it incur any minimal cost, with payment for participation more than offsetting those expenses.

Demand response is really the only energy sustainability program that doesn’t require any upgrades or changes to a facility, except for easy installation of a smart meter. Thus, it has no limits. Customers simply need to have an actionable energy management plan to effectively reduce when called upon. Training staff to understand how the program works, what machinery to shut down, and the required timeframe for participation are critical for successful DR.

What It Means
We cannot take back years of fossil fuel use or the damage that resulted, and we must wait to take advantage of the promise of renewable energy. What we can do is embrace every option available that sustains our rampant desire for mass energy consumption. Those options are here for the taking now. Demand response and a myriad of other energy reduction programs will be the catalyst for low-cost, high-efficiency energy usage over the coming years.

Authored By:
Wayne has worked as the SEO Specialist for NRG Business – Demand Response since 2012. Holding degrees in Printing and Graphic Design, he spent the previous 14 years at a yellow page publishing company. Wayne's writing interests include coal, natural gas, oil, and new products. In his free time, he enjoys hockey, Canadian music, Scotch, and spending every second he can get with his 4 year old son.

Other Posts by: Wayne M. Kovach

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January, 15 2015

Richard Vesel says

Mr. Payne,

NO ONE is advocating "overnight" conversion. That is a red herring argument, and is only designed to elicit "poppycock" responses in these kinds of discussions.

Weaning and conversion is a 50-60 year process, and we are only 10-15 years into that process. Renewably-sourced electric power "capacity" is being added at a current rate of 108GW per year. Not overwhelming, but not a drop in the bucket either.

Look for continuation and increases of that penetration, and other efficiencies on the consumption side, to put us further down the road of conversion. The big issue is to not STOP this process by perpetuating absurdities that are designed to merely to drum up resistance from those with entrenched interests in the status quo, or who are too simple to understand the real needs of the times.

The final mix will still contain some fossil fuels, just way down from where we are now. My own models require a 95% reduction from current rates of fossil-based emissions. I don't think those are too far astray...and CO2 generated from processes limited to the biosphere would still be permissible - biofuels, biomethane, etc.


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