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Inward Investment Guides

Energy Management Demand Response Difficult to Implement

Although Demand Response systems can help commercial building owners monitor and manage energy demand, these programs have proven difficult to implement.

Michael Zimmerman, CEO, Building IQ (Winter 2011)
(page 2 of 2)
Challenges to Realizing Demand Response
So why don't DR programs work? Current commercial energy management systems and practices were not created for a world with DR (or for interaction with any external system, for that matter). The vast majority of recent industry innovation has come from "outside the meter" (outside the building) from groups such as EnerNOC or Comverge. In reality, these DR programs will not succeed unless there is innovation "inside the meter" (inside the building) to match it. Vendors such as Honeywell, Schneider Electric, and Johnson Controls cover "inside the meter" domains. Although these large companies have broad offerings, they have difficulty innovating quickly and don't have many incentives to radically change their mature, stable, and fairly concentrated industry.

To their credit, some of these companies are now focusing on solutions to these problems individually or through partnerships and acquisitions. Due to the work of government entities such as the Lawrence Berkeley National Laboratory, industry groups and some leading vendors are piloting more intelligent automated solutions and standards like OpenADR, a low-cost communications infrastructure to improve DR functions. But things are moving slowly. These emerging "AutoDR" solutions (which link facility energy management controls with external, utility-generated price or emergency signals) still leave much to be desired, as they consist only of an electronic signal from the utility or DR aggregator to the building management system (BMS), and a pre-programmed, fixed set of changes executed by the BMS over the building to respond to the DR event.

However, even "AutoDR" has its challenges. With these solutions, users cannot predict the actual load the building can tolerably shed, and they do not respond to weather conditions on the day of the DR event. There is also a limited ability to predict or determine the tenant comfort impact from response and limited ability to validate the load shed versus target in real-time. The results are the best efforts based on the fit between the pre-programmed response and the specific situation on the day of the event, which is close, but not exact.

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Formulating Solutions
In order to provide a scalable, widely-adopted, and valuable smart grid program for the commercial building sector, the industry needs a fundamental increase in the intelligence of their "inside the meter" DR systems, and they must also be tightly integrated with the "outside the meter" systems.

The next generation of DR will take "AutoDR" to the next level, and will include:
• An initial electronic signal from the utility or DR aggregator to the building manager and subsequent signals as the DR event progresses in the region with updates on any additional requirements.
• An automated response from the building's energy systems back to the utility or aggregator to confirm the precise capacity of load shedding available given current conditions.
• Incorporation of the DR event into the building's energy optimization plan for that day, with the energy plan tailored to comply with the event while minimizing tenant comfort impact.
• Dynamic adjustments to the energy plan and load shedding based on any changes to conditions (inside or outside the building) during the day.
• Estimated and real-time validation of actual load shedding versus target.
• Estimated and real-time understanding of tenant impact of response.
• Estimated and real-time understanding of program's economic benefits.
• Confirmation back to utility or DR aggregator immediately after the event confirming actual results.

If the industry is to overcome these barriers to DR adoption and achieve its smart grid potential, it must move from "Manual DR" and the emerging "AutoDR." It needs a range of solutions from the major "inside the meter" vendors to move the industry forward.
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