The Evolution of DR Project report provides a succinct history of demand response, beginning in the 1950s and 60s, when utilities began offering incentive-based “interruptible” programs to large commercial and industrial customers.
Between 1980 and 2000, direct load control programs offered savings to smaller customers through radio controls allowing utilities to turn off hot water heaters and air conditioning during peak demand.
The term “demand response” came into use after 2000, when the creation of ISOs and RTOs created “a new platform” for the resource, including market-based DR.
Using new technology and directed by FERC policies, the RTOs “moved beyond emergency programs and began to incorporate DR as a market resource that could compete with supply resources. DR began to be viewed as a dynamic, controllable and dispatchable resource that could help balance supply and demand in a wholesale market.”
DR began providing ancillary services, including operating reserves and regulation.
Potential peak reduction in RTOs and ISOs grew to 6% of peak demand in 2013, from 5.6% in 2012, according to FERC’s annual Assessment of Demand Response and Advanced Metering report in December. (See FERC Report Shows Spotty Growth for Demand Response, Advanced Meters.)
At the same time, utilities began installing advanced metering infrastructure — smart meters — that provided both more precise time-based measurement and two-way communications.
In contrast with traditional energy efficiency — making devices and equipment use less power — DR was “dynamic, controllable and dispatchable.”
A new term emerged — intelligent efficiency — to describe building technology that can respond to price or other inputs automatically.
In the last five years, DR backers have sought to ensure the resource has a role alongside rooftop solar and microgrids in the move to distributed energy resources.
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