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​Demand Response Potential and Barriers Studies

Gaining clarity on the future of demand response

In 2018 and 2019, Bonneville released two interrelated, comprehensive assessments of the opportunities, costs and challenges to the adoption and deployment of distributed energy resources (DER), primarily demand response (DR), within BPA’s Pacific Northwest firm power service area.

The reports, commissioned by BPA and produced by Cadmus, provide an understanding of the magnitude and costs of realistically achievable DR in BPA’s firm power service area, as well as of barriers that could hamper BPA’s ability to deploy DR resources in a timely and cost-effective manner.

Study 1: Measuring the potential of DR/DER for public power in the NW

This study, released on September 20, 2019, assessed commercially viable DR/DER products and provided estimates of the technical and achievable DR potential in BPA’s firm power service area. The report encompasses 162 BPA power customer service areas in Washington, Oregon, Idaho, and western Montana, and small portions of California, Nevada, Wyoming and Utah.  

The September 20, 2019 study is a consolidation of two companion potential studies (the Demand Response Potential in Bonneville Power Administration’s Public Utility Service Area Final Report of March 19, 2019, and the Demand Response Product Refinements report of October 13, 2018) and replaces and updates those two earlier reports

Demand response products:

Utilities can use DR as a mechanism to manage system loads, ensuring reliability or mitigating price spikes by encouraging customers to curtail power demand during peak periods (peak shaving) or shift demand from peak to off-peak hours (load shifting). The study looked at 19 common DR programs and products currently offered by utilities across the country. They fell into four categories:
  • Direct load control.
  • Time-varying prices.
  • Demand curtailment.
  • Utility distribution automation or demand voltage reduction.

Key findings:

The report found an estimated 2,295 megawatts of demand-response potential in the winter season (an amount equal to 15 percent of BPA’s winter power planning peak load) and 2,415 megawatts of summer potential (18 percent of BPA’s summer power planning peak load) to be achievable over the course of 20 years. The summer potential is fairly evenly split between the western and eastern part of the region; while the larger winter potential occurs in the west.

Study 2: Barriers to DR/DER in the Northwest

This report, released on February 16, 2018, describes market barriers that may hamper the ability of BPA and the region to deploy DR/DER resources in a timely, cost-effective manner, along with strategies to address these challenges.

Data from secondary sources, stakeholders and market actors revealed several barriers to the DR market’s optimal functioning. These barriers fit into five broad categories:
  • Economic/market.
  • Organizational/operational.
  • Infrastructure/technology.
  • Legal/regulatory.
  • Perceptions/attitudes.

Based on the study results, economic/market factors emerged as the most critical obstacles to developing and deploying demand response. Specifically, interviewees rated the valuation and pricing of DR as most significant.

Substantial operational, infrastructure and technology barriers to DR development impact BPA customers and end-use customers, the report found. These included competition for staff and financial resources, and potentially significant investment needs. An example of the latter was the lack of a uniform load control communication protocol.

The study also identified barriers related to BPA power customers’ perceptions and attitudes toward DR that might further impede deployment. These included a perceived lack of long-term commitment to DR by BPA, a perceived lack of end-use customer demand and perceived deterrents to participation by end-users.

Strategies for reducing barriers

The report concluded BPA and other regional stakeholders could effectively address these obstacles by pursuing certain options and strategies.

A clearly defined and articulated need for DR, along with sound frameworks for measuring and valuing it, could pave the way for a more active DR market in the region. The report found that many barriers would be addressed given adequate economic justification and a business case for BPA and its customers to invest in DR.

The study also found concerns among end-use customers about the potential costs and adverse effects on business operations and productivity, as well as potential loss of privacy, comfort and control. Some of these concerns could be addressed by program design, education and information. The report concluded that other concerns, such as costs and business interruptions, might be reduced with adequate incentives, provided sufficient value exists for BPA and its power customers to support such incentives.