A Conceptual Framework to Describe Energy Efficiency and Demand Response Interactions

Energy efficiency (EE) and demand response (DR) resources provide important utility system and ratepayer benefits. At the same time, the rapid change in the amount and type of variable renewable energy, like solar and wind, is reshaping the role and economic value of EE and DR, and will likely affect time-dependent valuation of EE and DR measures. Utilities are increasingly interested in integrating EE and DR measures and technologies (as well as other distributed energy resources) as a strategic approach to improve their collective cost-effectiveness and performance. However, the specific EE and DR features that may be best integrated, the interplay between changing EE and DR resource potential, and the resulting utility system impacts, are not well understood.

We develop a framework to identify the EE and DR attributes, system conditions, and technological factors that are likely to drive interactions between EE and DR. We apply the framework to example measures with different technology specifics (e.g., presence of controls, building type, and targeted end use) in the context of different system conditions (e.g., peak demand, load-building periods during high renewable generation output). Ultimately, the framework defines EE and DR interactions not only by the change in discretionary load (i.e., DR potential) but also by the change in likelihood of participation in EE and DR programs—as well as the change in system need for, and the overall availability of, EE and DR resources. The framework is intended to improve the integration of EE and DR in utility operational and planning activities.