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What is Demand Response?

Every day, we turn on a light, heat up a meal or, plug in our phone habitually without a second thought.  

But from an electricity standpoint, these acts we take for granted are super amazing feats! At any given time, machine systems that are hundreds of thousands of square miles in size need to balance electricity supply and energy demand 100% perfectly to make it all work.

You might think that the supply side is the critical one. After all, most of us only notice our electricity when it stops working or when we receive a pricey bill. But electricity demand is something that we should all think about too.  

Demand Response 101 

Demand response is the idea that, instead of just generating new power (the supply) to meet consumers’ needs and wants in any given moment (the demand), electricity companies can and should actually help manage the demand -by shaping consumers’ power consumption through price signals, rewards, and other mechanisms.  

Demand response is all about getting people to turn stuff off during peak demand periods. Simple as that. But not just at any moment of the day or week, but in the specific moments when turning stuff off is most impactful. This means turning off stuff when energy is most expensive, energy generation is dirtiest, or when grids are under such stress that they are close to failing. And the real magic of demand response is when we look at the entire system and figure out how to help “turn stuff off” in ways that don’t impact customers’ lifestyles at all. Little things can ensure everyone has ample energy usage for warm showers, cold beer, comfy AC, and big screens for football games.   

To understand why demand response (and more broadly, “demand management”) is powerful, we need to take a step back. 

We all know that our society has an incredible need for electric power – it touches every aspect of our daily existence. But what is less obvious is that our society doesn’t require an equal amount of electricity in all hours of the day and all days of the year. In fact, for most electric grids, a huge percentage of the size and scale of the grid is driven by the needs of just a handful of hours per year. In Texas in 2020, ERCOT’s peak demand was 74.328 MW. But in only around 10 days in July and 10 days in August did demand exceed 70MW. Meanwhile, in several months of the year, peak demand is below 60MW. If we had the ability to more securely and reliably shape when energy demand and peak energy consumption occurred, we’d be able to remove billions of dollars in infrastructure costs required to maintain the capacity required for those limited number of hours per year. Demand response can be much more cost-effective for the system in many cases, lowering electricity costs for everyone.

Demand Response & Our Planet 

Demand response programs can also help our planet. Conserving our energy helps keep the lights on for everyone, but the less energy we demand, the less that needs to be supplied. That could be coal, natural gas, wind, solar, or anything in between. It’s why conservation is such a vital piece of the demand response puzzle. Sure, we’d rather spin a wind turbine than burn coal, but using less energy makes a big difference overall, in both our energy consumption and the environment. 

Even further, in many situations, the energy that generation needs to be ‘turned on’ to meet the peak demand is often among the dirtiest sources of electricity. When these ‘peaker plants’ get turned on is usually what causes periods of highest emissions release – including carbon dioxide, nitrogen dioxide, sulfur dioxide, and mercury. If we create more effective ways to reduce demand in those moments, it would have a tremendously positive environmental impact 

Our planet demands it. 

Renewable Energy in Texas 

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Categories: Energy Explained
Tagged: demand response, energy news, energy explained, renewable energy, energy terms, green energy, clean energy, electric power

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