GETTING READY FOR DR 2025

With Demand Response (DR) becoming a more important tool in commercial buildings sustainability toolbox, we thought it would be helpful to provide insight into the factors one should access when preparing for the next DR season. As we close out the 2024-year, DR revenues have essentially been generated for the year and there will inevitably be some energy managers that are thrilled in the game of forecasted DR revenue versus actual, and others asking “What happened?”. For everyone on that spectrum, we have some tips on how to improve going into 2025.

DR have been around since the 60’s, it’s not exactly a new idea, and most end users have had some experience with it one way or another. The technology around today, and the programs have changed and evolved significantly over the years and yet end users still struggle with the execution of reliable, forecastable DR performance and revenues. Deciding to participate in DR only checks one box and it’s the very first one, however there are a few more that should be addressed to really drive successful DR participation. Those include:

• Establishing which programs are most suitable to your business
• Selecting the right technology and service partners to engage with
• Establish the type of DR strategy to deploy
• How to provide accurate and reliable results

Everyone should be participating in DR. It’s critical to our grid infrastructure, especially as we see the adoption of electrification across the world. As we migrate to electrical heat and increased electric vehicle charging requirements, our grid demand continues to increase exponentially, and for those unaware…this poses a massive hurdle to our utility partners.

For DR to work well customers need a reliable technology in place for dispatch, a load aggregator working with them to ensure market enrollment is correct and the ability to audit participation in real time. For most, barely one, let alone all three of these requirements are well addressed.

So, when does one prepare for the 2025 DR season?

The answer is now. Yes, that’s right, preparation for upcoming DR season should not be something addressed in March or April, just before DR programs start running, but rather before the end of the prior year. And where should you start, you may ask:

1. Already Participating: By requesting your 2024 participation numbers so reviews can start and adjustments can be made.
2. New to DR: By starting to engage load aggregators and technology providers.

Reliable Demand Response requires preparation and evaluation for true success. So, let’s look at the various things to consider in the process:

Reliable Dispatch Technologies:

Most  DR participants have some level of DR technologies in place to help them drive automated demand response execution, whether it’s an EMS driver or cloud based thermostat solution. In preparation 2025, all DR participants should take the following steps to ensure success against their forecasted revenue.

1. All security tokens and certificates are provided by the DR load aggregator and loaded by your controls vendor to ensure the automated DR system is loaded and ready for dispatch.

2. Ensure sites are online and connected to the load aggregator system. This can be easily confirmed by having the aggregator run DR dispatch test events. Everyone should request these test events and reports, to ensure sites can connect and dispatch as needed.

3. HVAC units are as healthy as possible going into DR season. Unhealthy HVAC may have problems reducing load when called upon to do so and will be working harder than needed in general.

These steps ensure your sites, and their DR connection are healthy and ready to receive the signal. These simple things are often ignored, and they can cost you all your DR revenue if not identified and fixed quickly.

Load Aggregators

For those that don’t know what an aggregator does, they essentially sit between end users and the utilities. They help with administration of DR program selection and signup for customers, protect customers from non-participation penalties and are usually helpful in ensuring customers can respond to all events through automated dispatch. There are several aggregators available to customers, all take a split of earnings for the services they provide. That split is often negotiated and will be a driving force in which aggregator is chosen, as some take more than others.

The other question that one should be sure to ask when evaluating aggregators is how the bids per site and programs are managed. Does the aggregator review this with the customer to ensure everyone is confident in the bid values, or do they decide and submit in a bubble? Why is this important? Load Aggregators may not always tell you what the market threshold for participation is, but most require at least 75% of your curtailment bid be met, some are as high at 95%. If that bid is not achieved, then no sites are eligible for payment, which in turn leads to one of those uncomfortable conversations with accounting on why you missed your revenue targets. For this reason, you really need to ensure the bid values are achievable and that your sites can in fact drop the load required to ensure payment.

Though Encycle is not a load aggregator, we do work closely with customers to establish bid values. This is a critical step, and something that needs to be evaluated against what load is being curtailed upon dispatch.  Evaluating DR strategy and participating load is important and should be assessed correctly before bids are submitted, as the wrong number, results in missed revenue…every…single…time!

Real Time Participation Audits

Now let’s talk about the black hole of DR reporting. Demand Response is notorious for being that program that no one hears about until the beginning of each new season, when your load aggregator is knocking on your door for bids and sign ups, and then is goes quiet, often with little to no reporting on participation and revenue against bid values. Often, it’s not until the customer requests a performance report, that they are provided with one, and even then, it’s almost always missing information. This is also usually when one finds out they didn’t do well because of something that happened in the previous two sections:

• Signal wasn’t received or executed on…
• HVAC units where down…
• Sites were offline…
• Bids were unachievable etc…

Most controls platforms and aggregators are not proactive in DR reporting, resulting in a hope and prayer approach that participation was good, vs. helping customers proactively through the season to improve performance to ensure revenues are achieved.

Realtime, or at least monthly reporting would help significantly, vs. waiting for utility settlement. Between EMS metering or virtual submetering, evaluating site performance should not be difficult, and certainly would drive a more proactive approach to DR participation improvement. Even tracking against target bids, should be something provided by your controls or load aggregator vendor, to ensure the number submitted to accounting are reached.

DR can be a very real revenue stream, especially if you partner with providers that can help understand the pit falls and have an execution plan to ensure the greatest chance of success.

If you’d like an evaluation of your current state in preparation for DR 2025, we would be happy to provide one, looking at all ends of the spectrum to ensure success!

Head to www.encycle.com to learn more about Demand Response, or reach out to our team at info@encycle.com