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Demand Response in the Wake of the Polar Vortex

Smart Electric Power Alliance

After having suffered through brutal cold if the last week of January via the polar vortex, most places in the United States (at least for now) have returned to normal levels of cold for the winter. While the vortex is not a fun event to go through, not only for the cold itself but because I'm personally sick of hearing from political leaders that cold weather is somehow proof that we don't have to worry about climate change, the extreme cold temperatures did present an opportunity for utilities to address and respond to the conditions. 

The main way the utilities were examined in the wake of extreme cold was in how various generation sources weathered the conditions (an important topic, which you can see covered in some great Energy Central posts, including: Polar Vortex set to test Midwest grids amid FERC resilience debateDeep Freeze Puts Strain On Midwest Gas And Electricity Grids, and PJM and Members Prepared to Meet Winter Electricity Demand), another compelling way in which the vortex presented challenges and opportunities to evaluate operations came in demand response. 

In particular, I wanted to highlight this piece the demonstrates how the polar vortex offered utility customers a lesson in demand response. The main takeaways of note include:

  • In Michigan due to lack of natural gas to meet demand and the need to preserve its use in critical locations like hospitals, utilities and government officials asked residents to turn down their thermostats (to the mid-60s). Similar efforts were used in Minnesota to battle demand during the vortex
  • These are examples of demand response in which customers are asked to voluntarily reduce energy use to benefit the grid and/or gas network
  • Outside of extreme weather or emergencies, demand response is intended to reduce the need to add extra and costly generation plants to the grid, but the polar vortex showed how similar efforts could also be employed unexpectedly when the need arises

Most compelling, I found this quote from the article:

Some experts say this week’s harsh weather could raise awareness about demand response, an issue mostly unknown by average ratepayers and often lost in regulatory proceedings.

“Even when you have time-of-use rates, it doesn’t seem people are always aware of knowing when to cut electricity use,” said Steve Campbell, an attorney at Clark Hill who specializes in energy regulation. “This is sort of a dramatic way to introduce it to people and put it in their minds.”

Obviously we're never rooting for a polar vortex or needs to curtail energy use, but what do you take away from the polar vortex and how it may have introduced demand response concepts to previously unaware customers? Could and should this be leveraged as an opportunity moving forward? Is there momentum for such utilities to target pilot demand response programs in this way?

Matt Chester's picture

Thank Matt for the Post!

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John  Costello's picture
John Costello on February 14, 2019

I was surprised to see that natural gas residential consumers in Michigan were asked to reduce their thermostat set points due to the lack of capacity.  Typically, natural gas distribution companies' constraints are a consequence of a transmission company's inability to deliver gas to the distribution system.  Distribution companies typically address this by injecting gas into their own network (storing gas as LNG or in large caverns during off-peak seasons when demand is low) or asking dual-fuel customers to switch to their alternate fuel during times of peak demand.  This alternate fuel is typically #2 Oil.  The customers that have dual fuel capability are typically Industrial customers that are on Interruptible  or Quasi-Firm rates for natural gas knowing that they will be interrupted 10-30 days per year.  Their natural gas cost is a function of the number of days they are willing to be interrupted.  This polar vortex must have been historically severe to have exhausted all other options.  Is this something that we have to look forward to with more frequency as a consequence of climate change?

Matt Chester's picture
Matt Chester on February 14, 2019

A good read on the 'why' of this situation was published by Vox which you can read here. The situation in Michigan was a combination of historic levels of cold (much beyond the typical 'very cold' status of the Midwest during this time of year) that pushed demand to record levels combined with existing gas shortages in the region and a fire at a gas compressor facility. All these combined to make the officials make the call for reduced gas usage where possible to ensure sufficient supply for places where it was the most needed-- homes with sick or elderly, hospitals, etc. 

So this seems to have all been a bit of a perfect storm, but I would certainly say that yes as climate change pushes forward increased extreme swings in weather and temperature that this perfect storm may increase in frequency-- something like going from a 100 year storm to a 20 year storm, if you will. 

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