Focus on demand response

Local public utilities charge different rates for electricity based on energy demand at any moment: A kilowatt hour of electricity, for example, will cost more in the middle of a hot day when HVAC units are running at full blast than it will cost later that same evening.

By making minor changes, however, retailers can significantly reduce their energy usage during those peak rate times, which, in turn, can have a dramatic effect on energy costs. The tool to make this happen is called demand response (DR) technology. While DR is not new, the technology for years was used only by public utilities to remotely reduce energy usage at big-box stores and other large commercial and industrial facilities to keep electricity demand from rising higher than electricity supply.



The good news is that DR technology is now available for small to medium-sized businesses as a tool to help them reduce energy usage during peak rate times, a process known as peak management. Indeed, peak management is emerging as the most efficient way to maximize energy management returns because the end result is that the retailer can make a small energy reduction when energy costs are at their highest. The end result: a very efficient energy management program that won’t negatively impact their retail customers.



With traditional DR, a public utility is given permission by its big electricity users to turn off systems such as lighting or HVAC when energy usage is so high that it threatens to overtake energy demand. Electricity usage can never be greater than supply, so the utility companies monitor both of these and uses DR to reduce energy demand when it gets too high.



Smaller facilities: The push to implement DR in small and medium-sized businesses started with the deployment of commercial OpenADR, which works by letting utilities and independent operators signal a demand response event through a demand response automation server. The server then relays the request to equipment at a retailer’s site that is managed by an energy management system, which at a minimum, is an Internet-connected HVAC controller with a cloud-based energy-monitoring portal. (The current version of the standard, OpenADR 2.0, includes a complete and expanded set of communication protocols and has become the benchmark in the industry.)



Another service for peak management customers is energy management as a service (EMaaS). EMaaS builds on the “software-as-a-service” business model that is a popular use of cloud computing and leverages the features and functionality of traditional EMS with a dedicated layer of 24/7 data support that proactively monitors all of a retailer’s facility data. It takes the burden off the facility managers of having to distill the fire-hose of data generated by traditional EMS. With EMaaS, facility managers need not be the energy experts.



For peak management, EMaaS provides a valuable resource to monitor energy usage at all times and to make intelligent decisions about which systems to shut down to reduce usage and save money. An EMaaS solution can also effectively track energy usage over time, so that retailers can best leverage peak demand data.



Retailers that want the benefits of a peak management system can configure their EMS/ EMaaS system to monitor their electricity rates and then set a threshold so that when the electricity cost goes higher than that point, the EMS automatically reduces energy usage.



The retailer can “stage” the way their systems turn on as well as cut back on air conditioning or heating, lighting or other selected loads. The cut backs can be done by time of day so that certain systems, such as lighting, aren’t turned off during certain hours, for example. Another option is to have the EMaaS data team monitor the rates and call the facilities team to get authorization before energy usage is reduced.



Whether automated or manually approved, the goal is to reduce energy load when energy demand is highest, without compromising the customer’s shopping experience. Retailers can expect up to 10 peak demand events per month. Multiply that by between five to 10 pieces of equipment that must be controlled during these demand events, and then multiply that by the total number of retail locations in the owner’s portfolio, to see just how much potential there is for energy savings.



When done correctly, managing peak demand allows retailers to significantly reduce energy consumption when rates are the highest, resulting in dramatic reductions in energy costs. Managing peak demand can be a great way for retailers to ensure efficient energy usage and maximum savings on their energy usage, so that retailers can focus their budgets elsewhere.



Ifty Hasan is chief technology officer of EnTouch Controls.