Energy use is a major operational expense, and the management of it is one of retail’s biggest focus areas for sustainability. With the industry consuming billions of dollars of energy per year, the opportunity for savings is immense – along with the important environmental benefit of dramatically reducing greenhouse gas emissions.
While the focus of the holiday season is on sales and profitability, the season is also the perfect time to plan so that you can personally impact your organization’s bottom line through earning financial incentives on energy savings with Demand Response (DR).
Demand response refers to the practice of reducing or shifting electricity consumption during periods of high electricity demand in order to avoid overloading the electric grid and prevent blackouts. Demand response is important because it helps balance supply and demand of electricity on the grid, and can prevent blackouts, the need to “fire up” gas-peaking power plants, and avoid costly upgrades to the grid which are usually passed onto rate-payers. By reducing or shifting electricity use during periods of high demand, demand response can help prevent overloading the grid and ensure that there is enough electricity to meet the needs of all customers.
In addition to improving the reliability of the electricity grid, demand response can also help reduce greenhouse gas emissions by promoting the use of cleaner, more efficient forms of electricity generation (avoiding those gas-peakers). By reducing the need for utilities to rely on fossil fuels to meet peak demand, demand response can help to reduce the overall carbon footprint of the electricity system.
Demand management (or what we call “persistent demand management”) is a strategy that goes hand-in-hand with demand response as it aims to balance the supply and demand of electricity on the grid. Unlike demand response, which requires buildings to curtail their consumption when a utility sends a signal, persistent demand management requires a building to continuously balance its energy demand to avoid large demand spikes – it’s an application that runs 24 x 7 and in parallel with demand response programs. The importance of demand response and demand management lies in their ability to help maintain a stable and reliable electricity grid. By managing demand, these strategies can help prevent blackouts and other disruptions, and can also help utilities avoid the need to build expensive new power plants or transmission lines to meet peak demand. In addition, demand response and demand management can help reduce greenhouse gas emissions by promoting the use of cleaner, more efficient forms of electricity generation. Finally, both techniques can significantly reduce retailers’ energy expense with little investment and opportunity cost.
There are a few key factors to consider when deciding which demand response programs will provide the maximum financial benefit. Some of the key factors to consider include:
A recent, informal poll of our customers indicates that multi-site businesses like retailers and grocery chains, on average, only participate in about 20% of the demand response programs available. That's A LOT of money left on the table, but why? Here are the four most common challenges we hear:
Phoenix Energy Technologies developed Demand Manager™ to solve all of these technical roadblocks and our team can help you easily identify, quantify, and qualify the value of all DR programs across your portfolio.
And with more than a decade of experience, Phoenix Energy leverages partnerships with leading DR aggregators to significantly streamline and simplify the contracting process and bring energy-reducing activities to customers’ store nationwide. Join us for our live webinars coming up in January, February, and March 2023 where you can hear directly from our Demand Response partners.
Demand Response program contracting begins February 1, so timing is perfect to get your planning and process started now.