Demand response programs can reduce utilities’ peak demand

Demand response and energy efficiency programs are complementary: energy efficiency reduces both energy use and peak demand while demand response provides additional peak demand reductions. In this article, they use data to illustrate the importance of each, including some new data on actual savings from demand response programs.

For more than 20 years, ACEEE has been taking a close look at the energy savings from utility-sector energy efficiency programs. In 2015, they estimate that these programs saved about 200 billion kWh, more than 5% of retail electric sales in the United States that year (based on an analysis of data through 2014 and updated to include 2015 savings). In some leading states in America, the savings from these programs exceed 10% of retail electric sales already and could reach more than 20% by 2020.

These energy efficiency savings also substantially reduce peak energy demand—the time of the day and year when the demand for electricity is highest. For example, ACEEE recently reviewed data reported to the US Energy Information Administration (EIA) on energy and peak demand savings for 25 program administrators (those reporting the highest total energy savings in 2015 and that together account for more than half of incremental energy savings in 2015). They found that for each 1% reduction in electric sales for a utility, on a median basis, peak demand reductions from efficiency programs are 0.66% of peak demand for that utility. If these trends hold for additional utilities and future years, it would mean that for a utility that reduces retail sales by 15%, the peak demand savings will be around 10%. For more info click here.


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