Nothing to Laugh At: 5 Myths About Demand Flexibility Debunked

It’s April Fool’s Day, but make no mistake: demand flexibility initiatives are no laughing matter. Misinformation is on the rise, driven in part by social media and AI. That misinformation leads to misunderstanding and distrust, both in the systems used to curtail peak usage through aggregate conservation and in the customers needed to empower these programs.

Myth #1: Customers Will Not Want To Participate

One common myth among utility programs is customer willingness to enroll or participate in demand flexibility programs. This sentiment seems supported by things like low response to customer outreach initiatives or decreasing customer participation rates in demand flexibility programs during grid events. As such, this presents a practical concern for electric utilities: are demand flexibility programs worth it? The answer: absolutely.

The Facts: Customer Interest In Demand Flexibility Programs is at an All-Time High

As electric demand continues to affect customer rates, interest in demand flexibility programs that mitigate rising costs continues to increase. For example, in 2022, more than 10.3 million U.S. residential customers were enrolled in a demand response program, yielding 1 terawatt of aggregate load reduction. A recent study from the Smart Energy Consumer Collaborative (SECC) shows that more than 66% of customers are interested in behavioral demand response.

Myth #2: Demand Flexibility Programs Aren’t Scalable

The scalability of demand flexibility initiatives is critical to their long-term success. Moving beyond the pilot stage requires opportunities to broaden program offerings by offering more devices, reaching and retaining program participants, and integrating with the right solutions.

Unfortunately, limited offerings yield limited outcomes, meaning that utilities might see an underperforming pilot and base their decision to eliminate the program based on available data. Likewise, the cost of device integrations may prove cost-prohibitive as well.

The Facts: The Bigger the Program, The More Successful It Is

In terms of demand flexibility programs, the more the merrier. The more participants in the program, the more opportunities to meet load shifting targets, while enhancing grid resiliency. For example, deploying even 400 MW of resource adequacy through virtual power plants (VPPs), which are 40-60% of the cost to build fossil fuel alternatives, can save U.S. utilities between $15-35 billion within 10 years.

Seek vendors with a robust list of OEM partnerships and API integrations, which can alleviate these pressures, while providing a direct path to meeting load shifting objectives. As noted above, customers are increasingly interested in participating in demand flexibility initiatives: providing more opportunities increases your odds of expanding the customer base needed to decrease operational expenses, while increasing energy security.

Myth #3: BTM DERs Aren’t Reliable for Operations

Grid operators often rely on known quantities like the front-of-meter distributed energy resources (DERs) like solar or battery installations, managed by Grid distributed energy resource management systems (DERMS). Understandably, this does not extend to behind-the-meter DER assets found in places like residential, commercial, or industrial properties, all of which are subject to customer participation: grid operators need to know they can rely on their energy assets.

The Facts: The Next-Generation of Virtual Power Plants is Here

Topline Demand Control (TDC) solves for this by combining AI, model predictive control, forecasting, and the Shift Grid-Edge DERMS. With TDC, grid operators can request a desired load shifting outcome and receive a reliable outcome. TDC removes BTM DER intermittency by optimizing devices on a granular level to ensure the desired output.

Myth #4: Transferring DERMS Vendors is Hard

DERMS come in all shapes and sizes. As mentioned above, Grid DERMS manage utility-held DER assets like solar or battery installations. By contrast, Grid-Edge DERMS aggregate and manage the growing fleet of behind-the-meter DER assets found at the edge of the grid. Selecting the right DERMS vendor involves identifying your program design, determining the OEM setup and any integrations, and providing effective measurements and verifications (M&V). Because of that, some utilities feel tied to their DERMS vendor, whether through the sunk cost fallacy or contractually.

The Facts: The Bigger the OEM Partners & API Integrations, The Better

Fortunately, changing vendors is easy. The right vendor emphasizes operational efficiency in transferring DERMS platforms, ensuring a seamless transition. This involves providing the requisite API and device integrations, as well as preserving program data to inform future forecasting needs. Furthermore, the right vendor can open up your program to new device types, fostering the scalability necessary for any demand flexibility program to thrive.

Myth #5: Demand Flexibility M&V Isn’t Good Enough

Providing a return on investment (ROI) for demand flexibility initiatives is crucial in maintaining stakeholder buy-in. As such, measurements and verifications (M&V) are an incredibly important administrative detail in providing ROI, while informing everything from when to call demand flexibility to costly energy market purchasing decisions. These M&V formulas are complex, involving numerous variables that can influence data outcomes.

The Facts: The Right Dashboards Show ROI & Inform Energy Purchases

Data management tools like DERMS dashboards or forecasting software are effective at providing baseline measurements and verifications. This functionality is useful in informing energy arbitrage strategies, while also demonstrating the effectiveness of the demand flexibility initiative, reliably demonstrating ROI. Ultimately, effective data management strategies curate real-time, historical, and weather data to provide a multi-faceted breakdown of program results.

Nothing to Laugh At: 5 Myths About Demand Flexibility Debunked: Conclusion

With energy demand spiking, driven by AI and data center developments, erratic and unpredictable weather behavior, and supply chain and tariff challenges, bridging the gap between generation and transmission capacity has never been more important. As such, demand flexibility is no longer an experiment, but a necessary and integral element of any load management strategy. Fortunately, while there are many understandable objections to the potential of demand flexibility, the march of progress has shown these programs to provide value and enhance resilience for utility operators, making them no laughing matter.

About The Author

Syd is a senior content specialist and all-around word nerd for Virtual Peaker. Syd believes in the inevitability of renewable energies and in implementing a diverse energy portfolio and is excited to use his skills to help spread that message far and wide. In his scant free time, Syd is a father of two, husband of an awesome wife, a musician, and a lover of comic books, and all things sci-fi.

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