2022 - The Year of Reverse Demand Response Programs

Author: Adam Smith

Renewables, like solar and wind power, are subject to weather patterns. This makes them unpredictable. As utilities increase their supply of renewables to achieve aggressive carbon reduction goals, ensuring the reliability of short-term energy supply and load will become a challenge.

This will make demand response programs more important than ever. Created to manage demand, these programs are offered by utilities and energy companies to entice end-use customers to stop using electricity during peak usage periods and when supply is low.

Newer on the scene are reverse demand response programs. Explored by utilities like Arizona Public Service (APS) as early as 2017, we haven’t heard much about them since then. That’s about to change with the growth of renewable energy supplies.

Reverse demand response programs aim to increase consumption when there is an excess of renewable energy supply. This is achieved through negative pricing in the middle of the day when renewable energy is abundant. These programs are going to be very important to the future of utility and energy companies because overgeneration damages equipment connected to the grid and requires manual intervention of the market to maintain reliability.

When APS went down this path in 2017, it stated that energy efficiency would continue to be an important tool but added, "We can deliver higher-value by also using other demand-side tools like load shifting, electrification and reverse demand response to help smooth system load shapes and shift energy use into midday hours when energy prices are low or negatively priced."

“When the electricity grid is peaking, demand response programs compensate you to curtail your energy demand. But what do utilities do when the growth of electricity use has flattened, renewable energy generation continues to grow, and there's excess renewable generation available leading to negative pricing,” says the Energy Watch article, “Reverse Demand Response”? “This opposite scenario calls for an opposite strategy – reverse demand response, where end users are incentivized to actually turn up demand, rather than turn down.”

Reverse demand response programs are like load shifting, but since renewables are less predictable than their carbon-producing counterparts, these programs can be used to manage non-essential loads. Use cases include using the scheduling capabilities of:

• Electric vehicle smart charging tools; and

• Smart appliances.

In addition to demand response programs, Silverblaze ACE supports reverse demand response programs. It is a customer self-service, data presentment platform purpose-built to educate and mobilize utility customers to change their energy usage behaviors.

For utilities, new opportunities come with new challenges, and replacing carbon-producing energy sources with renewables is no exception. While we will inevitably see overgeneration of renewables—and don’t yet have the battery technology to store it all—we can expect a growing number of utilities to start managing supply and load with reverse demand response programs.

Contact us at uca-sales@harrisutilites.com to learn more.