Efforts to put energy to better use are paying dividends as we gain efficiencies through monitoring and control technology. Power management is not a new concept for larger energy consumers. For many years, power management efforts have focused on lowering the costs associated with the energy consumed, improving the utilization of electrical assets and making sure reliable power is available where and when needed.

In order for an organization to achieve these objectives, it must successfully implement best practices tailored to its specific business. Some common approaches include:

  • Communicating with the electric utility to better understand how the usage is measured and billed.

  • Applying metering at key points throughout the electrical distribution system to provide better resolution of consumption and demand patterns.

  • Combining energy information with other business, process and asset management systems to understand how their usage affects business metrics such as energy cost per square foot, ton, widget, etc.

  • Instituting facility improvements and process automation, and deploying general energy-awareness reporting and activities that address energy waste, allocate costs to specific business activities and monitor improvement over time.

For the most part, we should expose energy consumption to a continuous improvement process targeting permanent energy reduction and facility optimization. New opportunities to reduce energy costs are emerging each year. Demand response (DR), for example, offers financial incentives direct to energy consumers in consideration for willingness to shape their energy usage differently over time, in a way that reduces the need for utilities to add very expensive new generating capacity. While some forms of DR have been a part of energy management programs for decades, many factors have severely limited the viability, effectiveness and financial benefit of participating.

Early DR efforts were often lacking. Customers had difficulty selecting optimal fixed control points for load reduction. It also was cost prohibitive to deploy measurement and control devices deep enough in the electrical distribution system to get a granularity of control that affects demand without compromising the fundamental mission of the facility.

The miniaturization of electronics and explosion of computing capability and memory storage coupled with reliable wireless networks means that measurement and control can be achieved at a very granular level for minimal cost. Furthermore, standard communication protocols have broken down barriers resulting from the proprietary approach of the past. Fewer protocols mean fewer hardware components, lower maintenance costs, and faster and cheaper implementation.

The pervasive presence of embedded intelligence throughout facilities and electrical distribution systems alone does not ensure that DR assets will perform in a more reliable and effective manner. Creating better situational awareness is the key to unlocking demand-side capacity. While more consumers today may understand where their electrical service entrance is located and how much they are paying for electricity, few can make meaningful business decisions from the raw data that comes from a plethora of communicating devices.

It is often too difficult to understand what can be done to generate demand-side capacity and how it will affect the primary mission of a company. Therefore, it is critical that DR leverage the infrastructure, systems and processes of an overall power management solution by blending actions, reporting and accounting for long-term energy reduction with short-term demand management.

With increasing performance, the perception of DR has changed within electric utilities and markets. DR portfolios now represent a significant percent of total resources. Large-scale DR has proven its value in maintaining grid reliability under extreme scenarios, and it has paid off by lowering maintenance costs following restoration of power after major outages. Furthermore, the growing portfolio of intermittent renewables such as wind and solar are increasing the relevance of DR as a first-tier resource.

Technology improvements have enabled energy consumers to take a more active role in monitoring and managing consumption while exploring more progressive programs to advance their overall energy management strategy, such as DR.

In order for utilities to count on being able to reliably tap demand-side capacity, it is key that automated DR solutions are encouraged and the capacity created is valued on par with generation. These DR solutions provide substantial benefits for utilities and consumers of electric power, including potential cost savings on both the supply and demand side and allowing for the most efficient use of energy.


Donald Rickey is senior vice president, energy business, Schneider Electric U.S., responsible for end-user segments as well as its medium-voltage and grid automation solutions.