Waypoint Blog

Have you thought about implementing demand response (DR) energy management, but aren’t sure what it would look like specifically at your building? You’re not alone. The commercial real estate market stands to benefit from DR, but it’s not always clear how to act on that opportunity. Waypoint’s here to explain.

Demand response is focused on reducing energy consumption at specific time periods when demand is high and energy is expensive. It’s about cutting down on “peak load,” or the times when buildings draw the most energy form the energy grid. Energy efficiency and demand response often provide complimentary benefits, in terms of lower utility bills and more flexible energy management, at commercial buildings. Utilities nationwide are beginning to taking note. Some new programs offer utility customers better options to capitalize on energy efficiency and demand response opportunities simultaneously. The Environmental Defense Fund provides a short summary here on how DR succeeds in the market.

Let’s look at how demand response opportunities work for commercial real estate properties. Office buildings are typically in operation from the early morning through late evening. Energy usage peaks during summer afternoons, when air conditioning is in use. The usage peaks in commercial buildings typically align to a utility’s overall demand peaks, meaning utilities are particularly incentivized to work with commercial customers to reduce or shift load through demand response.

Similarly, building occupancy is typically highest from early morning through late evening—meaning an office building will likely by occupied during DR events. Consider these strategies to maximize demand response opportunities at your building, even when tenants are present:

1. Install flexible technologies.

Buildings can implement hardware, such as lighting controls, dimmable ballasts, and smart HVAC systems, that allow energy managers to adjust and manage the level of energy usage and demand during key time intervals, while still maintaining tenant comfort.

2. Partner Technology with Intelligence.

Complementary software solutions, such as building energy management systems and data analytics software, can provide even greater insight into granular energy usage data. These systems also allow a building to selectively shut off high-intensity components, like elevators, motors, and fans. For short DR periods of 1-2 hours at a time, these high intensity component shut-downs have minimal impact on tenant comfort.

3. Coordinate with your Utility.

Your utility representative can help you identify and enroll in the relevant utility programs for demand response. For example, PG&E offers participation in an Automated Demand Response program for each technology category – Automated Demand Response, Advanced Technology HVAC/R, Advance Technology Lighting – PG&E provides an incentive of $/kW reduced during peak events in a season.

4. Don’t Forget About Efficiency First.

It’s best to implement baseload-shaving opportunities through energy efficiency projects, before moving ahead and setting your consumption baseline for calculating demand response savings. While some utilities are picking up the pace on DR, almost all utilities have energy efficiency incentives at the ready. Make sure to take advantage of those, too!

Explore these DR strategies at your properties today, dig around to see if your utility offers DR incentives, and look to Waypoint for insights into how to maximize value each step of the way. Questions? Reach us at [email protected].

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