Thank you for your comment. I agree that DR can be expensive to implement in existing buildings requiring significant retrofit. I disagree with the rest of your comment, however. I will tackle your arguments in turn.
· Benefits versus costs: It is appropriate to consider different perspectives on this topic. For the building owners, it is a competitive advantage to have a building with efficient and DR-enabled energy management systems. Efficient buildings can demand higher rents and attract “flagship” organizations.
· Tenant Reactions to DR: I disagree with your presumption that occupants will suffer during a DR event. Our study, like many others, is demonstrating methods to provide a DR service without compromising occupant comfort. In fact, many DR strategies, such as enhanced weatherization, use of daylighting, and slowing blow fan speeds improve comfort. With that said, EDF does support increasing our precision in use of DR. In the context of peak load mitigation, DR services can be aggregated and sequenced, but they need not be delivered by one customer for more than an hour.
· DR needs a subsidy: Currently, customers who use proportionately more energy at peak than average are subsidized by other customers. This is because it costs utilities more to serve customers at peak times. DR has been shown to be cost effective using traditional, reasonably comprehensive cost-benefit tests. Most of the value is associated with avoided costs of peak energy supply and delivery. DR helps to reduce these peak time costs; these avoided costs are shared with all rate payers. As well, customers who provide a DR service are paid by the utility specifically because the utility (and the CPUC) have determined that it is cheaper to reward customers who avoid peak demand than to provide them with peak-time electricity.
Importantly, your discussion of the economics seems to consider DR in isolation. EDF is eager to facilitate the enormous potential value that DR can provide by enhancing the value proposition for energy efficiency investments, storage, and self-generation. In this respect, DR should be viewed as a piece of an energy portfolio that delivers value for many years. As you wrote it, “limit and/or shift peak energy demand…should be done - and is done - more and more. It can save money and energy while maintaining proper indoor climate quality.”
I would be interested to learn more from you about how the economics can, should and does play out in real project retrofits. I’m also interested in your analytical assumptions – are you looking at DR payments over just one season, or many? Are you looking at DR in isolation or as part of a broad strategy to manage energy costs of a building?