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The increasing use of demand response programs to stabilize the power grid by utilities represents a cost and labor saving opportunity for building owners, particularly multifamily buildings and hotels, according to a White paper published last month.
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In demand response programs, energy suppliers give building operators an incentive to reduce energy consumption during peak periods. Buildings can significantly reduce labor costs by participating in the programs by automating their systems, HVAC optimization firm Parity said in the report.
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By enabling seamless demand response, HVAC automation can significantly reduce buildings' electricity costs at a time when rate increases are outpacing the rate of inflation, Parity said. The US Energy Information Administration expects retail electricity prices increase by 13% from 2022 to 2025.
Parity's report provides a roadmap for property owners to transform their facilities into “network-interactive, efficient buildings”that are better able to use energy more efficiently and make it easier for operators to participate in programs to respond to utility demand.
Technologies that support grid-interactive, efficient buildings — such as occupancy-sensing lighting and HVAC controls — are becoming increasingly common in offices and other types of commercial buildings, Parity said. In apartment buildings and hotels, these same tools can reduce lighting waste, HVAC load, and other power consumption in common areas and spaces.
Utility-led demand response programs have historically included blunt measures such as remotely suspending the operation of energy-intensive HVAC systems or less reliable alternatives such as requiring facility managers to reject or deactivate equipment. Those requests may not come in until several hours before an event is scheduled to start, if not closer, Parity said.
That picture is changing as utilities move to more sophisticated programs that leverage virtual power plants (VPP), advocates say could reduce peak electrical load Nationwide by 10 to 20% within a few years. As data centers and building HVAC electrification increase electricity demandDemand response and VPP programs are among the fastest and most cost-effective options for adding capacity to the grid, allowing new capacity to be created all in one matter of months instead of the several years it takes to build a gas power plant.