By Clinton Davis, Industry Solution Manager, Smart Grid, for Ventyx, an ABB company

Fred and Jim face a common challenge among electric utilities. They must create short- and long-term action plans that are flexible in a regulated environment; deliver immediate relief; and meet basic customer needs of expanded choice, economic efficiency and equity. Jim’s goal is to be proactive instead of being reactive year after year.

Energy efficiency programs are likely already in place at Upland Power & Light, but increasing participation is one of the least expensive, fastest payback investments for both the utility and the customer. Providing timely electricity usage data with peer-comparison information and offering suggestions for efficiency upgrades and behavioral changes can save the customer money. Such education is reported to achieve between 0.5% and 4%  reduction in overall average energy usage.

On the side of retail demand, most demand-response and energy efficiency programs could benefit from more effective automation technology or two-way communication. For example, smart thermostats can be used to automate HVAC operation in response to high critical peak prices. When used with an enabling technology, critical peak pricing has been shown in recent pilot studies to result in peak demand reduction of anywhere from 27% to 44%.

While evaluating various customer programs, a balance must be struck between economic efficiency and customer needs. On one hand, a large industrial plant that continuously monitors electricity consumption may be willing to face hourly price-changes, and pay for supporting technology that allows it to reduce peak usage or to shift production to cheaper hours. However, residential customers may only want to participate in a handful of events at first – such as critical peak pricing days – especially if they are used to flat rates.

Receiving continuous feedback from customers allows a utility to better match supply with demand 24/7 – not just when demand reaches a critical peak. In Upland Power & Light’s case, this could mean short-term implementation of air conditioning thermostats to shut-off at a pre-set price level. Longer-term, a technology can be implemented that learns from customer interactions to optimize electricity use and alert customers of potential issues or inefficiencies. Ventyx can deliver such an advanced Demand Response Management System within nine months, allowing Upland to address next year’s peak load.

When demand response is included in the optimization, there can be additional peak reduction benefits while maintaining reliability. Additionally, advanced monitoring, control, and automation can reduce energy losses in the transmission and distribution system, requiring fewer system resources to meet load. Advanced distribution management and Volt/VAR Optimization (VVO) systems can enable Fred’s team to minimize peak demand and reduce power losses.

In the mid-to long-term, Upland can consider generation and supply contracts, transmission and distribution investment, and demand-side options using planning models for their system operation. Feedback from short-term strategies can be used in new planning scenarios, closing the information loop between planning and operation, preparing Fred and Jim for Upland’s Power & Light’s peak demand now and in the future.

Clinton Davis is Industry Solution Manager, Smart Grid, for Ventyx, an ABB Company. His responsibilities include designing solutions to complex business challenges through Ventyx software and consulting services. He is a subject matter expert for Smart Grid.

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