During these periods, businesses reduce usage or switch to onsite distributed generation resources, which helps to keep supply and demand in balance and avoids the need to buy expensive peaking power from the wholesale market or turn on another expensive fossil fuel-fired power plant. Demand response pays people for using less energy from the grid, typically for short amounts of time (anywhere from a few minutes to a few hours).

Too little supply = brownouts and blackouts. Too much supply = power plants sitting idle, costing consumers millions. 'Because electricity canвЂ™t be stored cheaply and efficiently (yet!), supply and demand must always remain in a delicate balance. David Lipson, Senior Account Manager, Enel X 5. Grid operators spend less on demand response than they would on a power plant, and participants enjoy a new revenue stream. We avoid blackouts by using less (reducing demand) instead of building more (increasing supply). Demand response asks large power users to use less during those peak hours-and participants get paid for doing it. But power plants are expensive, and sometimes theyвЂ™re dirty. Grid operators typically need to build enough power plants to make sure they can meet the very highest levels of energy demand, even if thatвЂ™s only for a couple hours throughout the year. When people are using more energy (demand) than the grid is generating (supply), we experience blackouts, rolling blackouts, and brownouts. 'Demand response is a service offered by many electric grid operators to balance supply and demand on the grid. Robert McGarry, Manager of Global Labs, Engineering, Enel X 4. Ultimately, it boils down to a single action: commanding energy users to change their usage activity.' This load relief could come from shutting off machinery, adjusting a thermostat setting, turning on a generator, or switching on a battery. This could include relieving load on a local distribution transformer, avoiding high marginal prices, or reducing net system load in response to a power plant failure. 'Demand response is the modification of energy usage to achieve specific outcomes on the electrical grid at varying levels. Ann Cole, Senior Manager of Commercial Operations, Enel X 3.

Other applications of demand response include adjusting demand based on price signals, or increasing demand during time of excess supply, usually the result of a wind or hydro surplus.' Through this mechanism, businesses and consumers contribute to the stability of the grid and are compensated for doing so, effectively being paid for NOT using electricity. Instead of turning on/up another traditional supply source like a peaking power plant, a utility or grid operator can use demand response to 'turn off/down'В electricity demand, thus negating the need for additional supply. 'Demand response in its most traditional form turns energy users into virtual power plants by adjusting their energy consumption during specific times to relieve stress on the grid.

Guillame van Eeckhnout, Business Development Manager, Enel X 2. Similarly, the grid operator would rather pay you to use less rather than build a new power plant. The airline would rather pay your hotel room than charter a new plane. Do you fly often? Demand response is also like being paid to stay in a hotel when your flight has been over-booked. If you can be flexible on when your production lines run or when your freezers can be coasting, we will reward you for it. Like home owners monetizing spare capacity, demand response allows you to monetize your energy flexibility. 'Demand response is the AirbnbВ for energy. (One of the downfalls of working with really, really smart people is that if you ask a question like 'what is demand response?', youвЂ™re likely to get a 1,000- to 5,000-word, detailed explanation that includes a history of the energy markets, the evolution of 'interruptible tariffs,'В acronyms like PJM, and phrases like 'peak load management.')Д«elow, IвЂ™ve reprinted my five favorite answers that explain how demand response works. So with that in mind, we tapped some of our best and brightest Enel X employees to provide their best answer to the question, 'what is demand response?'В The rules were simple-explain DR in your own words, and keep answers to fewer than 200 words. Having spent this much time pioneering the DRВ business and introducing it to markets all over the world, itвЂ™s easy for us to forget that itвЂ™s still a new concept for many. Here at Enel X weвЂ™ve been in the demand response (DR) business for over a decade, helping businesses earn money in exchange for reducing energy when the grid needs it the most.

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