How Demand Response Controls Heating and Air Conditioning Systems

Demand Response (DR) is a recent trend utilized by utility companies with the help of third party technologies to help manage and control the amount of energy provided to a specific source. This amount of energy, often referred to as load, is the amount of energy supplied to a residential or commercial entity to power, for example, its heating and air conditioning system. Many utility companies often seek out software solutions to help identify peak load times throughout the day, providing them with a bird's eye view of the energy they are providing to a specific source or group of buildings within its market jurisdiction.

At the advice of Demand Response companies, electricity providers often approach their customers to persuade them to sign up for special demand response programs. Utility companies often mention a decrease in price for customers as an incentive in signing up. Once a customer signs up, the electricity provider will take control of their heating and air conditioning system after installing a specialized wifi-controlled thermostat device within the home of business. During parts of the day, week, or month, electricity providers can analyze how much load is being sent to a specific area on its grid, and automatically adjust the thermostat by a few degrees to affect the amount of electricity is being sent to a group of buildings.

Because heating and air conditioning systems often consume the majority of load provided to residential areas, it is in both the interest of the consumer and utility company to sacrifice by a degree or two. This not brings the cost of energy down for the consumer, but it also means that the electricity company will burn less coal, decreasing costs and carbon emissions across the board. The markup for electricity still exists, so the electricity company is still making a profit by continuing the load—albeit not as much—to a residential or commercial area.

This is precisely how Demand Response companies have marketed themselves to utility providers across the nation. Some DR companies have even gone as far as maintaining Network Operation Centers for utility providers, controlling load provisions by a formula that is agreed to upon by the electricity provider and the Demand Response provider. If customers have a problem, some DR companies have taken it upon themselves to offer their own customer service, thus taking on any additional work that would otherwise have needed to be serviced by the electric company.

The industry for this technology has become so popular that several trade shows and conventions take place each year specifically for the sole purpose of showcasing the latest developments in Demand Response innovations. One of the largest trade shows is called Distributech, which takes place annually in various cities throughout the United States. Each year, hundreds of companies converge under one giant roof to showcase this new side of business. Multinational conglomerates like AT&T, General Electric, and Lockheed Martin are present each year, attempting to showcase and leverage the latest and greatest Demand Response technologies.