Navigant Research Blog

On Blackout Anniversary, Demand Response Gains Ground

Lauren Callaway — August 14, 2013

August 14 is the 10-year anniversary of the blackout that dimmed cities across the Northeastern United States and Ontario.   It was hard, in that summer of 2003, to imagine the immediate and sustained costs, in addition to impact on peoples’ lives, that the incident would produce.

The summer of 2003 was unusually hot, and air conditioning use was high. Because energy costs were (and, for many, still seem to be) low enough for people to not think twice about a slightly higher bill in exchange for temporary comfort, aggregated high demand for energy strained the Northeastern electric grid.  Combined with a series of monitoring and grid management mishaps, this resulted in approximately 45 million Americans losing power for up to 2 days.  Six people died in New York City.  But most people, after they realized it wasn’t a terrorist attack, assumed the blackout was the fault of a tree falling outside Cleveland.

Since 2003, energy regulation has evolved to impose substantial fines for mismanagement of the grid.  Furthermore, the Smart Grid Investment Grant doled out billions of dollars to utilities to upgrade their grids to provide more reliable, efficient service to customers.  These behind-the-scenes policy changes and upgrades are not always effective enough to adequately reduce the strain (i.e., cost) of peak loads or to result in desired efficiency improvements, and are potentially out of reach for many utilities due to high capital expenditures.

Be Cool

The solution?  Demand response.  This grid balancing technique directly involves customers by initiating an agreement that they will curtail use upon receiving signals from the utility that the grid will be overloaded at a specified time.  There are a number of different demand response schemes that involve varying degrees of participation on behalf of the customer.  In New York City, Con Edison and ThinkEco have introduced the coolNYC program to combat one of the 2003 blackout’s indirect culprits: air conditioning.  Participants receive smart plugs and smart thermostats that the utility can directly control to cycle on and off during peak loads. Customers don’t need to directly participate, other than opting in or out, and they stay comfortable during heat waves. In addition, they achieve savings on their electric bills.

The problem? Well, the problem is that it’s doing really well, and Con Edison can’t keep up.  Having equipped roughly 10,000 window AC units with smart thermostats and plugs, the company still has millions of units to equip, and there’s currently a waiting list to participate.  That fact in itself highlights another important fact: New Yorkers are starting to care.  Navigant Research has noted that of one of the major barriers for demand response, and a reason that utilities have been slow to adopt, is that it can be hard to convince consumers of the benefits.   A decade after the 2003 blackout, it’s important to note the progress that has been made in customer engagement—arguably the greatest inhibitor for any form of energy efficiency or load management.

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