With Lure of Dollar Signs, Demand Response Gains Converts

by | Feb 25, 2010

world energyDemand response, an electricity purchasing practice in which businesses reduce their draw on the energy grid during peak demand periods, such as hot summer days, is increasingly becoming a way for corporations to register positive results to the bottom line.

World Energy Solutions just launched an online auction site for buying and selling capacity for demand response networks. The site will allow companies the chance to sell their curtailable load — i.e. the energy they commit to reduce — at bid/buy market prices.

World Energy Solutions, which also handles auctions for the Regional Greenhouse Gas Initiative, a cap-and-trade program for Northeastern states, is banking on delivering the kind of results it did for Gerber’s Poultry, an Ohio company that expects more than $100,000 in new revenue from the practice, according to a press release.

In another example, Stater Bros. Markets earns about $250,000 a year for reducing non-essential electricity use during peak demand periods, as a result of enrolling in a demand response system from EnerNOC in 2008.

Also known as curtailment, the practice of buying “negawatts” is seen as a way for utilities to ensure operation of the grid when peak demand is foreseen.

Gregg Dixon, a senior vice president at EnerNOC told the Boston Globe that the fact there World Energy has launched an online auction means that demand response has become mainstream.

Dan Mees, a spokesman for World Energy, said the expansion of the so-called curtailment service provider (CSP) market means there is room for more growth.

“We’re going to be providing customers to the CSP community at a very low cost,” Mees told the Globe. “EnerNOC is still going to go out like any other company and do its own big game hunting and land its own customers.”

Wade Roush of Xconomy noted that World Energy was “disrupting a market dominated by … EnerNOC.”

“The irony is that EnerNOC, which built its business on smoothing out inefficiencies in electrical supply and demand, is now seeing that business disrupted by another young, technology-based company that sees the demand response market itself as inefficient,” Roush wrote.

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