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Have you incorporated the concept of ‘learn-fast’ into your demand response program?

Have you incorporated the concept of ‘learn-fast’ into your demand response program?
Image used with permission.

Fail-fast, learn-fast, same same, it just depends if you are a glass half empty or glass half full sort of a person. The concept, coming from the world of start-ups, has now been part of the mainstream business lexicon for a few years. In the world of demand response, what does this mean and why should you ensure this is an enduring characteristic of your demand response program, even once it is running at scale?

The goal of demand response for a consumer is to make as much money as they can from reducing their demand on the grid during peak times, with minimal inconvenience to themselves.

The goal of demand response for a utility is to have a consumer reduce their energy consumption as much as possible during peak times, at the lowest possible cost.

So why is ‘learn fast’ such a critical success factor?  Because there are so many variables that must be constantly tested to see which combination delivers the largest reduction in demand at the lowest cost.   

For example:

  1. The consumer wants the utility to pay them as high a financial reward as possible, and the Utility wants to spend as little as possible.  You need to test a range of price points to find the sweet spot.


  2. The consumer wants the event to last as short a period as possible, so they are not inconvenienced, and the utility may need an event to run for many hours to reach their goal.  You need to test different durations to give the utility what they need while still making it worthwhile for the consumer.

There are many other examples of tensions between what a consumer wants and what the utility needs for demand response to deliver enough value that it is worth pursuing.  The utility needs to test these variables and learn from them to find an optimal outcome.

On top of this complexity, add in the fact that every consumer is different. Millions of dollars are spent developing segmentation models, consumer personas, all with the aim of being able to target the right offering to the right consumer.  A demand response product that works for one consumer won’t work for another, so you need to test to find what does work for each segment.

Building your team and associated process around the concept of learn-fast is core to a successful demand response program. How have you incorporated the concept of learn-fast into your demand response program?

Wayne Pales's picture

Thank Wayne for the Post!

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