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If this seems unachievable for your company, think again. Because there is good news – companies with heavy energy demands typically have flexible elements of their operations. These flexible loads can participate in demand response to generate a source of revenue. 

However, demand response is just one piece of the larger energy flexibility puzzle. Let’s dive into an overview of three key factors, including demand response, that warrant your consideration.

The 3 important factors to address with energy flexibility

Increasingly, companies are confronting the volatile energy market directly, tackling challenging operational expenditure (OPEX) costs through strategic energy management. Energy is evolving beyond merely being an operational expense – companies now perceive it as an asset they can harness, control, and monetize. 

Being strategic with when and how you use your energy opens up opportunities to reduce energy costs, earn revenue, enhance operational performance, boost energy efficiency, and more. 

At the heart of implementing a strategic approach to managing your energy is energy flexibility. There are three important factors to consider as you build out your energy flexibility strategy:

1. Price avoidance: Minimize exposure to price spikes and periods of predictably high energy prices by reducing energy usage during high-price times – or shifting operations to times when it’s more economical to operate.
2. Coincident Peaks (CP): Your capacity and transmission charges on your electricity bill are determined by your energy usage during the highest demand times on the grid, known as Coincident Peaks. Reducing consumption during these times is critical to reducing charges on your electricity bills.
3. Demand response (DR): Participate in grid programs that pay you for reducing energy during times of high demand – like periods of extreme hot or cold weather – to ensure the grid remains stable or to avoid the grid powering up fossil-fuel powered peaker plants.

Energy consumers can balance revenue generation and energy cost reduction by cohesively addressing cost management, peak avoidance, and earnings. It’s important to address these elements in a cohesive manner and not in an inefficient silo. For instance, an optimum strategy enables participation in demand response while avoiding CP and high prices, to maximize value and minimize downtime. 

But for a strategy to be effective, real-time insight is needed.

Energy flexibility is one part of the equation…

…having the insights to know when to be flexible is the other.

Large energy users must understand how energy market volatility affects their operations and profitability. They need to be able to identify the best times to consume energy and shift operations accordingly to avoid peak price times. With the right insights, they can leverage their energy flexibility to drive meaningful change across their operations. 

This insight is essential to informing a company’s demand response curtailment plan and optimizing their energy consumption to ensure they operate when it’s most economical. 

Armed with this valuable data, companies can:

• Make informed decisions
• Fine-tune operations
• Design an operating schedule that maximizes returns 
• Gain a competitive advantage in the rapidly evolving energy landscape

Real-time analytics and efficient energy management tools are essential to achieving a holistic, optimized strategy. With these tools, companies can foresee price volatility – when energy prices will be high, when coincident peaks are in the forecast, and more. In this way, they can develop a robust, customized economic strategy by balancing price volatility, demand response, and peak avoidance.