Stimulating Investment in Demand Responsive Capability

Kathleen McElroy and Rich Barnes, XENERGY, Inc.

Keywords

Abstract

This paper presents the results of research conducted to support the marketing effort of the California Energy Commission’s (CEC) Demand Responsive (DR) Program. This research consisted of focus groups and in-depth interviews with customers targeted for participation in this program during summer 2001.

Findings from this research suggest that reliability concerns were the main driver for DR program activity in California this past summer. Reliability concerns also appear to have motivated considerable demand reduction outside of formal DR programs.

This research also sheds light on the current state of investment in DR infrastructure in California, and assesses the remaining barriers to increasing investment in DR capability. As suggested through this research, there is considerable potential for increasing the penetration of enhanced energy management systems among California’s medium-to-large commercial, industrial and institutional customer segments. However, key barriers remain – i.e., lack of technical knowledge and expertise, lack of certainty regarding financial benefits, and concerns regarding occupant comfort.

The CEC has addressed these barriers by developing a comprehensive marketing campaign that focuses on customers’ specific information needs, financial concerns, and technical considerations. The new marketing focus has shifted away from crisis-oriented reliability concerns and moved toward promoting sustainable benefits of enhanced energy management and information systems, such as reduced energy costs, reduced O&M costs, and improved monitoring and control capabilities. The marketing effort will also promote, but not emphasize, some of the more traditional DR benefits, such as taking advantage of real-time pricing options as they become available and improved electric grid reliability.