GPI’s second fact sheet on demand response (DR) in the Midwest is titled, Environmental Benefits of Demand Response.
Long considered as a resource relevant only to utilities looking for a backup in case of emergencies, demand response can actually provide a number of environmental benefits. These include:
- Energy Efficiency: Demand response shifts electricity consumption away from peak load times to more desirable periods when demand has settled. In addition to this shift, studies have shown that utility DR programs that cycle residential appliances like air conditioners and water heaters can actually decrease overall electricity consumption and increase overall system efficiency.
- Reduced Reliance on Fossil Fuels: The power plants that utilities turn on for electricity generation during peak load times, when electricity consumption is at its higest, are much less efficient than the baseload power plants that run throughout the day. Therefore, by reducing the need for “peaking” power plants, DR can reduce the overall carbon intensity of the electric grid. Additionally, if DR is given equal consideration as other resources in planning future electricity supply, it could actually help avoid the construction of new fossil fuel power plants.
- Renewable Energy Integration: The electric output of renewable energy like wind and solar can often vary widely throughout the day, making it difficult to manage high levels of renewable energy on the grid. Using DR to fill in during lulls in wind or solar output will help enable even greater levels of renewable energy integration onto the electric grid.