How to Take Charge, Rack Up Revenue, Earn Incentives and Whittle Away Waste

Operating energy-efficient buildings and generating power using alternative, low-emission or clean technology may be highly desirable, but in the wide world of building construction, they still represent a niche. An expensive niche, at that. But there are a number of ways that businesses can lower their facilities' energy footprints while also saving money. Here's an overview on how.

Demand Response

When it comes to the price of energy, businesses have had an opportunity to lower their energy costs for the past 20 years, through a vehicle called demand response.

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A demand response event occurs when heightened energy use, generally caused by weather extremes, leads to the threat of overtaxing an electrical grid. To avoid blackouts, the utility puts out a call to companies that can lower their energy usage over a given block of hours during peak demand to do so — in exchange for money.

In recent years as the cost of energy rose seemingly in lockstep with the importance of corporate sustainability, demand response has become an increasingly important tool for businesses, while also generating significant energy cost savings and revenue. At the same time, technology has emerged that makes participating in demand response programs easier and potentially more profitable for businesses.

Vital to any demand response program is a third party that works both with the end user of energy and the utility provider, which is sometimes represented through an independent system operator (ISO). An ISO works to maintain a balance of supply and demand on an electrical grid that serves a given region or state, and ensures that adequate power supplies are always available.

The Early Days

Early demand response programs required the energy end user (a business) to manually respond to an energy curtailment request.

In the early days, a call would go out to power down.

That is, a call would come down from the utility grid operator, alerting participating companies that high demand on the grid was anticipated in a number of hours and requesting that program members reduce their power consumption during a given time period by a given amount in order to avoid a blackout.

In doing so, the firms would receive compensation, based on a set price of power per kilowatt-hour that they did not draw from the grid.

From a technology standpoint, the businesses participating in the manual demand response system needed only to install a special meter to measure electricity usage in intervals — usually an hour or 15-minute periods — enabling them to prove how much they reduced energy usage over a given time.