Posted by Tom Dufraine on Oct 23, 2020 1:33:50 PM
Within the last year, SJI Energy Advisors began a partnership with C-Power, a demand-side energy management company, to help us provide both Demand Response and PJM Energy Efficiency Programs to our customer base. This complements our hyper-competitive electricity and natural gas procurement process that we already have in place. In the past, participating in Demand Response was perceived as “complicated”, but is now more turnkey than ever with no associated risk.
Demand Response: If the local electric grid were to become strained, local end-users are asked to reduce their energy consumption for a short period of time. By reducing demand instead of increasing supply, the grid saves billions of dollars annually. These savings are shared throughout the community as the grid pays incentive payments to Demand Response participants.
- You earn a recurring revenue stream by being a seldom used insurance policy for the grid.
- Each year you can change your contribution up or down.
- No penalties or fees: If you cannot shed load for the 1-hour test (which you are given 2 weeks advance notice in June) you can forfeit revenue. If you are not able to meet the full commitment you will still be paid on what you have curtailed.
- Different Programs are available in different ISO’s such as PJM, ERCOT, and NGRID.
Energy Efficiency: If you complete a qualified efficiency project (HVAC upgrade, lighting retrofit, etc.), PJM deems this as “permeant reductions” to the grid. Given PJM has already procured capacity, they will pay that back to you as an EE Capacity payment.
- You can collect rebates on projects completed as far back as June of 2019.
- You can collect PJM rebates in addition to any utility rebates you may have collected.
- We can create a proactive approach to capture future rebate opportunities.
- You can also benefit from rebates for new construction.
Test Performance and Payment
In June of 2020, a 1-hour test was run for one of our largest customers, a complex and sophisticated industrial manufacturer in Pennsylvania. Findings concluded that due to COVID-19 causing reductions in production and even complete shutdowns in parts of their facility, they learned what equipment could easily be shut down and/or curtailed. This led to a solid Demand Response Plan and great revenue.
For the 1-hour test, they earned over $100,000 which will pay out quarterly for the remainder of 2020 and 2021. After further review from the event, plans are already in the works for the June 2021 test and are now estimating upwards $220,000 based on what we were able to achieve in 2020.
Demand Response coupled with the PJM Energy Efficiency Program provides a great opportunity to increase revenue with no risk. With the DR Program in place, you get paid for what you can curtail, and forfeit revenue if you cannot participate. There are great opportunities to generate revenue for your company/organization which can then be invested in additional efficiency programs, product lines, facility upgrades and more importantly people.
Don't leave Demand Response revenue on the table in 2021. Click the link below to register for our Webinar on November 18th with some of the industry's finest!
Topics: energy procurement