Energy users get paid by grid operators, utilities, or virtual power plants to conserve or shift electricity use in response to grid signals. These signals can be triggered by 1) a lack of energy supply (from heat waves, storms, downed power plants, renewable energy variability), 2) high prices, 3) high emissions on the grid, or other reasons.
Demand response can also generate value for energy users in the form of electricity bill savings when leveraged to actively avoid demand charges. Demand response serves as a lifeline for grid operators and utilities to prevent blackouts or shut offs which can be extremely disruptive, even deadly, to businesses and residents.
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