Demand-side management (DSM) initiatives have historically been seen as environmental programs used by electric, gas, and water utilities to demonstrate good corporate citizenship. However, with energy prices at all-time highs, infrastructure straining with utilization and age, and new, cost-effective, and energy-efficient technologies entering the market, many utilities are taking a second look. Many utilities now see DSM as an economic way to manage demand and reduce consumption, and thereby offset the need for investment in supply and delivery infrastructure.
DSM economics are complex and require more involved analysis than does modeling of supply-side investments, however. Consequently, many utilities employ specialist consultants to perform complicated custom modeling to evaluate and justify DSM investments. Utilities also have difficulty explaining the economics of their programs to ratepayers and regulatory bodies. Accurate modeling and tracking tools have not been widely available off-the-shelf, until now.
CopperLeaf ESP has been designed specifically to meet the modeling requirements of DSM. By using ESP, utilities are better able to analyze, justify, prioritize, and manage performance of their DSM projects and programs, using the specialized characteristics of DSM economics. The web-based architecture allows multiple users access to a central relational database to ensure consistent use of assumptions and algorithms. Further, the ability to internally build annual budgets and import actual costs and performance metrics enables users to track and report on projects and programs as they migrate through their life cycle.
Using ESP to Model DSM Programs
The goal of DSM programs is to help customers change their consumption of a resource in ways that are beneficial to the customer, the utility, and to ratepayers overall. Peak demand and consumption savings can be achieved through behavioral and operational changes, and "hard wired" technologies. DSM programs encourage behavioral changes and customer adoption of new technologies until their buying decisions and operating philosophy "transform" permanently.
While customer savings can be easy to identify, utility impacts are more difficult to establish. A reduction in consumption results in a loss of revenue, which affects the overall cost burden placed on ratepayers. Analysis becomes further complicated when incentives are used to aggressively target savings, particularly when needing to consider factors such as the rate of natural adoption and free-ridership.
ESP was designed with these needs in mind by providing utilities with a means to develop and justify DSM programs using sound, supportable economics. In addition, ESP helps utilities throughout the program life-cycle by providing a single tool for planning, budgeting, and execution.
Learn more about CopperLeaf ESP here.
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