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Why are you not creating a joined-up demand management strategy?


A few weeks ago I launched a diagnostic to provide you with insights and recommendations on how to improve your demand response program. The results are starting to reveal some exciting, and somewhat scary, patterns. One such pattern is the omission of a Utility having a joined-up strategy when it comes to demand management.

In the diagnostic, I asked:

“Has your organisation published its definition of demand response and distributed energy resources, and articulated the role DER will play within its DR strategy?”

A utility answering ‘YES’ demonstrates they have a joined-up strategy where they have articulated what DR means, what DER means, and how they fit together. In the majority of cases, the answer was ‘NO’.

This result suggests that while Utilities continue the rhetoric of being consumer-focused, they remain Utility focused. Each Utility will have different reasons as to why they are exploring distributed energy resources (DER) and demand response (DR) initiatives.

However, if you look at DER and DR through the lens of the consumer, they think in terms of wanting the lowest cost of electricity, that is the most convenient to them, and has the least impact on the environment. Consumers do not understand, nor do they care about distributed energy, demand response, and so on.

Today, a joined-up strategy is essential. Roll back a few years, and yes, I can see why we treated DER and DR separately. DR was about asking consumers to reduce their energy consumption manually. DER was installing ‘dumb’ rooftop solar that could not play an active role in the grid. But this is all changing and fast.

Many people’s view of demand response remains seated in days gone by, thinking it is about a human physically having to change their behaviour. We are fast entering an era where the software in a consumer’s home will optimise energy usage based on a value stack of cost, environment, convenience, and social good.

The consumer will merely choose the order most important to them; the software will do the rest. The software will holistically look at what’s happening in the market and what resources it has at its disposal to control and will consume energy from, and dispatch energy to the grid to deliver the best outcome for the consumer, not the utility.

Isn’t it time your utility created a joined-up demand management strategy?

Wayne Pales's picture

Thank Wayne for the Post!

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