The demand for energy is always on the rise, causing strain on an energy grid constantly working to keep up with the endless need for power that industry requires. In a landscape where businesses use large amounts of energy to run effectively, making efficient use of that energy is vital to ensure the power grid can keep up with increasing demand.
When businesses lower their energy usage during times of peak demand, it reduces strain on the energy grid and allows more industries access to the energy they need. This is called Demand Response (DR), and practicing it yields lucrative benefits for everyone involved.
Demand Response programs provide financial incentives for businesses that voluntarily lower their energy usage during times when demand and usage are the highest.
Explaining Energy Demand
Energy demand is simply the consumption of energy at a given time. This energy is everything from electricity to transportation fuels and fuel for industry and manufacturing. While renewable energy and other factors have allowed energy use to be more efficient, economic expansion constantly drives the global energy demands higher.
While the use of energy isn’t consistent throughout the world or even throughout the day, certain locations at certain times of day have a higher demand for energy than others. These times of high activity are called “peak hours”, and it’s during these periods where efficient usage of energy is most important.
How Does Demand Response Work?
Demand Response programs come in many forms, while offers differ based on the incentives available in a given state.
When businesses shift their energy usage, that energy can be better used during times of lesser overall demand. The result: peak hours put less strain on the grid, decreasing the likelihood of blackouts and other power failures.
When done correctly, demand response programs can be a win-win solution; businesses receive financial compensation for using less energy, allowing that energy to be used more efficiently and sustainably.
Advance Forecasting
There are many types of demand response programs available, both at the state and utility level that EnergyMark can help customers navigate.
Demand Response works like this: EnergyMark contacts clients with a reasonable degree of notice, letting them know that a peak usage period is coming. Some programs come with more than 24 hour notice, while others may come on shorter notice.
While the client is required to comply by reducing their energy usage during that period in order to take advantage of these savings, it’s mostly up to their own discretion how they decide this reduction in energy use should be done, and by how much to maintain any mission-critical productivity and ensure safety.
We let clients know about upcoming times of peak demand, so when that time arrives, they’ve already planned accordingly. This way, EnergyMark guides companies to adapt to a more sustainable, energy-efficient future.
Financial Incentives of Demand Response
While the financial benefits of Demand Response efforts can differ based on the program or the policies of each state, generally speaking, compensation comes from two main sources. The first is more efficient use of energy inevitably leading to lower energy bills. Lower energy bills are a main incentive for businesses to practice Demand Response, but these businesses are also compensated directly by utility companies.
Because it optimizes energy use while reducing the likelihood of blackouts and other power failures, Demand Response is in the best interest of utility companies and grid operators. Utility companies understand this and reward companies for practicing Demand Response. They reimburse these companies and customers through direct payments which can create a new source of revenue for participating companies.
Trusted Commercial Energy Supply and Management
EnergyMark doesn’t just supply energy, we help businesses and industries manage their energy usage across an ever-changing fiscal and environmental landscape. As an ESCO that directly supplies energy to major businesses across Western New York, your savings and efficiency are our highest priority.
To learn more about how we can help your business save money and manage its energy use, contact us today.
