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Mar 07 2013

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3 Ways Demand Response Will Lower Costs for Industrial Facilities

Is your facility struggling to pay its daily expenses?  Maybe your organization is just looking for an additional source of income.  In the midst of our nation’s hard economic times, thousands of businesses are searching for an answer to their financial struggles.  Participating in a demand response program will not only save your company money, but it will also supply it with that extra monetary cushion you’ve been searching for.  There are three main aspects to demand response that will be able to help any struggling facility.

Before reviewing these aspects, please note that even though demand response events are called only a few times per year, those facilities looking to participate must be flexible in their processes and schedules.  Notifications of an emergency event can be issued as little as 10 minutes before the event starts.  To make it easier, reputable demand response providers will work with your facility to come up with the simplest, most effective reduction strategy to perform during these events.

1. Earn Additional Income to Offset Overhead Costs

Demand response is a program that utilities rely on to protect the electric grid during times of high demand.  In order to compensate during these peak hours, participants in a demand response program voluntarily reduce their electric usage.  After successful reduction, the participant is financially compensated for their time and efforts.

As an example, if a large plastics manufacturer reduces 1,500 KW during a demand response event, that company will receive a check for approximately $65,000, which they can use however they like.

This popular program recently emerged over the past decade, and thousands of organizations are taking advantage.  Typically, there are no requirements for performance and no penalties if your facility is unable to reduce when reductions are called for.  Plus, there are no upfront costs to get started.

2. Save on Monthly Utility Bills

Participation in a demand response program can also help to save money on your facility’s electric bill.  During peak hours, demand for electricity is high, which consequently leads to a spike in price.  By reducing electricity consumption and shifting workload to non-peak hours, your company will see a reduction on your electric bill.

3. Prevent Damage to Expensive Machinery and Equipment

When a utility thinks it may not meet demand, it will sometimes reduce voltage until a supply of electricity builds up again.  These voltage fluctuations will lead to brownouts, and these brownouts can cause serious damage to your facility’s equipment and heavy duty machinery.  Repairing or replacing damaged equipment could cost thousands of dollars, but those who take part in demand response will be notified when voltage fluctuations are expected to occur.  With advanced notice, your facility will have enough time to power down any large machinery that may be harmed by a blackout or brownout.

On the rare occasion that the electric grid experiences a large amount of stress, facilities that take part in demand response will be the ones to benefit.  With monetary payments, a lower electric bill, and notifications of voltage fluctuations, facilities enrolled in demand response will be given the opportunity to stabilize the grid while creating another source of revenue.  Visit Energy Curtailment Specialists to learn more about the program and how to get started.

Sarah Battaglia
Energy Curtailment Specialists, Inc.

Sarah can be found on LinkedIn and Google+.

 

Permanent link to this article: http://www.apriso.com/blog/2013/03/3-ways-demand-response-will-lower-costs-for-industrial-facilities/

3 comments

  1. wd

    Saving money in utility bills is an opportunity in manufacturing. It’s always been an opportunity but it is only recently that actual progress has become routine.

    The article addresses savings through demand response. That’s a strategy for deferring consumption until a period when rates are lower. Consumption is unchanged, just deferred. It’s a pricing strategy, not a consumption strategy.

    Whether demand response is a readily tapped opportunity depends on the type of operation. Continuous processes usually cannot be shutdown or curtailed without huge penalty. Other operations have less shutdown and startup costs and these are the ones that may want to consider DR. Businesses will usually sign up for some amount of exposure to DR because $ can be saved and experience shows the call from the Utility rarely comes.

    The real opportunities are in consumption. It takes leadership to see these and to pursue these. It’s not necessary to hire a consultant. Two tips: 1) Consider how much energy would it require, ideally, to produce your product. Compare your actual usage. If it were not for what cause, the difference could be reduced? What can you do to approach the ideal? 2) Observe things. Stand near a device that is consuming energy and ask yourself: “Is this thing actually producing something of value at this moment? If not, what would it take to eliminate the usage or to allow the device to rest quietly until it is needed to do something productive. These two steps can lead to lots of opportunities.

  2. Jordan Berkley

    Sarah
    Thank you for this excellent article. If there is anything approximating a free lunch for manufacturers this is it. Assuming that a) your utility provides a demand response program and b) you have sufficient visibility and monitoring capability to align your own production demand and delivery requirements to your energy needs, a manufacturer can save some real money throughout the year. And, if you need to beef up your monitoring, measuring and alerting capabilities to provide the requisite visibility, this is one more argument to insert in your business case.

  3. Fiberglass Rod

    Very nice article for start up businesses. Any tips for pultruted products manufacturing company?

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