Demand-response aggregators of the world unite!!!
My Clean Break column this week takes a look at the emerging market for demand-response aggregators, and how the Ontario Power Authority is making it easier for aggregators, and by association smaller businesses, to participate in the energy management of the province.
I’m referring to companies like Comverge and EnerNOC, which in the United States are doing a commendable job of signing up mid-sized and large organizations as part of state-run demand-response programs. The idea is to lock these organizations into contracts in which they agree, when given a few hours notice, to cut back on their power consumption by a given amount for a specified length of time. By locking this obligation in a contract, electricity planners can rely on it as much as they can rely on new supply. A megawatt saved is a negawatt earned, and in most cases it’s cheaper and definitely cleaner.
I look forward to seeing this market grow and mature in Ontario, and hope to see the model spread across all states and provinces. This is low-hanging fruit that can also benefit from new technologies, particularly automation technologies that help aggregators operate more efficiently. One emerging player in the Ontario market is Rodan Energy.
I should, however, address some concerns expressed by readers. It seems there’s confusion between demand-response during peak times and conservation any time. Some people believe it’s absurd to pay companies to not use electricity, and on the surface it does sound odd. But if you remember that this is just for peak times — those few dozen hours of the year we really need the electricity — then the purpose becomes clearer. Of course we’re going to need more baseload generation over time, even if we’re going to go aggressively into conservation. Voluntary conservation can’t be relied on. This is why demand-response programs that oblige participants to a 95-per-cent power cutback are so useful. These power savings can be relied on, and as such it means we don’t have to import dirty coal power or pay high prices for electricity from natural gas “super peakers.”
Curious to know your thoughts on this trend…
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
August 8th, 2007 at 8:43 am
There are several other non-public companies that have just as many MWs under contract as the public companies stated, and have obtained these MWs without the help of public money!
August 9th, 2007 at 5:50 pm
On some sunny August day, the demand I can take *off* the market becomes more valuable than the product I planned to produce. When that happens, someone had better get on the horn quick!
I think the real potential here is not in the regulatory or contractual framework, but the telecommunications/trust network that allows the IESO to shut down a foundry if they hand over enough money.
Perhaps the whole issue will wake some people up to extraordinary stabilizing effect that rooftop solar energy can have. Sure, your silly 5 kW are trivial *most* of the time — but what are they worth in the 10 minutes immediately before a major system meltdown in mid-August? I suspect a small percentage of urban micro-generators could have a good effect on the power grid entirely out of proportion to their nameplate power output.
These folks are also, in one view, producing negawatts, because their power places no stress on Toronto overstrained transmission infrastructure, and it reacts automatically and correctly to increased sunshine and cooling demand.