The Time is NOW for Demand Response
Demand Response offers eligible hotels a way to earn thousands of dollars in incentive payments simply by agreeing to reduce energy loads during a specified curtailment period. So while traditional energy efficiency strategies will help to reduce utility costs and provide budget savings – demand response actually provides an additional revenue stream.
Afraid of Negatively Affecting Guests?
Have no fear! Just follow the guidelines set down with Demand Response Best Practices for Hotels. In addition, with technological advancements you can program the entire process. An energy management system can make your demand response program virtually unnoticeable, and ensure that neither guest comfort nor building operations are impeded.
These types of systems are designed to forecast the peak demand time, communicate curtailment time and procedures to the customer, automate curtailment procedures, and verify curtailment compliance so performance credits are properly tracked and earned. This technology also has the added perk of providing a wealth of real-time data to help track energy use in real time, informing customers of what could be changed for an even greater energy cost savings.
Different Types of Demand Response
Depending on your region, different types of demand response programs will be available. The basic ones are: emergency demand response, economic demand response, and ancillary services (a.k.a. Spinning Reserves) demand response.
- Emergency Demand Response – Employed to prevent involuntary service interruptions such as brownouts or blackouts during times when electric supply is scarce.
- Economic Demand Response – Allows customers to curtail their electricity consumption when the real time energy price of electricity reaches a specific point.
- Ancillary (Spinning) Services Demand Response – Generally used in response to a grid issue.
During a Curtailment event, a hotel would simply reduce energy consumption by:
- Making minor temperature adjustments of +/- 2 to 3 degrees in common areas.
- Dimming or turning off non-essential lights.
- Turning off fans, decorative fountains, and other non-essentials.
- Reducing or rescheduling services, such as laundry or dishwashing, to a time either before or after the curtailment period.
- Turning on backup generators or using onsite renewables.
A Win-Win for Everyone
Demand Response helps the power grid maintain balance, provides a means of added revenue for your hotel, and helps the environment by reducing both electricity consumption and CO2 emissions.
When and How to Sign-Up
Regional Transmission Organizations (RTOs) have a limit as to how much capacity from demand response they can accept per year. Because sign-up is on a first come, first serve basis, if you do not act early, you could be refused for that year – and then you’ve missed out on an entire year of additional revenue. So act early. Believe it or not, signing up now for next summer’s program is NOT too early.
If you choose to sign up directly with the utility, you need to realize that should you be unable to comply with a specific event curtailment, you will be liable for penalties. And if you select to sign up directly with a specific provider, you may not be getting the best contract terms available. An energy consultant like Alternative Utility Services (AUS) will review various providers, negotiate terms and oversee your energy program; finding a reduction number that is comfortable for both you and the utility.
Don’t miss out on this easy source of additional revenue for your hotel property.
Alternative Utility Services, Inc., established 1993, is a licensed energy consulting company providing services nationwide, including: electric, gas, demand response, reverse auction, auditing, and benchmarking.
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