Opportunities, Barriers and Actions for Industrial Demand Response in California

In 2006 the Demand Response Research Center (DRRC) formed an Industrial Demand Response Team to investigate opportunities and barriers to implementation of Automated Demand Response (Auto-DR) systems in California industries. Auto-DR is an open, interoperable communications and technology platform designed to:

• Provide customers with automated, electronic price and reliability signals;
• Provide customers with capability to automate customized DR strategies;
• Automate DR, providing utilities with dispatchable operational capability similar to conventional generation resources.

This research began with a review of previous Auto-DR research on the commercial sector. Implementing Auto-DR in industry presents a number of challenges, both practical and perceived. Some of these include: the variation in loads and processes across and within sectors, resource-dependent loading patterns that are driven by outside factors such as customer orders or time-critical processing (e.g. tomato canning), the perceived lack of control inherent in the term "Auto-DR", and aversion to risk, especially unscheduled downtime. While industry has demonstrated a willingness to temporarily provide large sheds and shifts to maintain grid reliability and be a good corporate citizen, the drivers for widespread Auto-DR will likely differ. Ultimately, most industrial facilities will balance the real and perceived risks associated with Auto-DR against the potential for economic gain through favorable pricing or incentives. Auto-DR, as with any ongoing industrial activity, will need to function effectively within market structures.