We've talked a fair bit about demand response (DR) energy distribution in previous posts, and for good reason. DR is truly gaining momentum in the U.S., as it has around the globe, but this sector is currently awaiting a decision by the US Supreme Court that could significantly impact the national evolution of DR technology, as well as administrative and business models.
To meet the changes in this structure, we have to take a closer look at DR. Numerous reports have been generated on the matter, a key report being "Peak Demand Reduction Strategy", which was released by Advanced Energy Economy in October of this year. The research concluded that the upside to DR is very high, offering drastic savings for individual state energy economies. A bright picture has been painted for the future of demand response -- if the Supreme Court settles on the right path for it.
The key to DR success is in either passing mandates for peak demand reduction or by establishing peak demand reduction programs. This type of action is what will reduce customer costs while concurrently strengthening grid reliability and encouraging compliance with the Clean Power Plan. Progress, though, will come on a state-by-state basis. While some states may have adopted DR early on, there are still those that are seriously lagging. All of this centers around each individual state's policy environment.
The question then becomes, should the power be left to the states? This is precisely what the Supreme Court is voting on. The decision will be made to determine whether the federal government (specifically, the Federal Energy Regulatory Commission, or FERC) should control the administration of DR programs, or whether that power should be given to the states.
Without any federal involvement, we could see significant difference in the pace of DR adoption and implementation, therefore making this a very important decision. While the best solution would be to have a healthy mixture of individual state standards with participation in wholesale markets and federal mandate, the end result is still to be seen. Even so, there's no reason for states to not continue pushing forward with the development of their own DR programs. Getting on board sooner than later is in the best interest of everyone. Demand response, after all, is a technology that is here for the long haul.