Enel North America

What is Demand Response?

The energy industry is undergoing a massive transformation as we adapt to the realities of climate change. Extreme weather events have become a serious threat to the aging infrastructure of our electric grid. Major power outage frequency has increased by 67% from 2000 to 2020 and this trend is expected to continue. Furthermore, recent studies show that based on energy demand and reliability requirements, the grid will need 5-12% of additional power generation. Since we can’t keep building new power plants in perpetuity, many utilities are turning to demand response (DR) as a “last stop” resource.

In a world where supply must always be equal to or greater than demand, a shortage or transmission constraint can quickly become a critical event. Rolling blackouts and brownouts have become more and more common as the result of high congestion on the grid, often due to extreme weather. In fact, for the last 3 years in a row Enel’s Global Network Operations Center has set successive records for dispatch frequency! Utilities everywhere are being challenged to balance electric load with a more intermittent mix of generation sources and unexpected weather patterns. With demand response, Enel makes it easy for energy consumers to be a part of the solution. 

Demand response programs work like an insurance policy for the electric grid: end-users can earn money all year long for being on standby to temporarily reduce consumption during peak times. Utilities pay for this flexibility and reserve the right to test the resource at least once a year to ensure that the load reduction is available. The key is that all participants must take action and reduce energy at the same time. The success of this program relies on the active contribution of thousands of energy consumers, all at once. 

“With demand response, Enel makes it easy for energy consumers to be a part of the solution.”

Faced with these challenges, we’ve asked ourselves: How do we ensure our customers are educated, prepared, and happy? How do we move quickly during emergency events? How do we reach and engage with thousands of customers? This article will explore how Enel has addressed these concerns to build and maintain portfolios with consistent enrollment and contract retention, while optimizing the resource for reliable delivery over the long-term.

Resourcing for Customer Success at scale

Top tier enterprise customers tend to have sophisticated decarbonization & sustainability goals. They are supported by a dedicated 1:1 relationship with a Customer Success Manager (CSM) to proactively guide them through market changes and adapt to externalities that may impact their ability to participate. In these relationships, demand response is typically only one part of a more complex energy management strategy. Enel also offers energy storage & EV charging, renewable power generation, and all varieties of power purchase agreements. The combination of on-and-off-site solutions for this segment needs to be thoughtfully integrated in order to maximize returns. For these organizations, the CSM becomes a trusted advisor and “part of the team” in many ways.

For the larger segment of small-to-medium businesses, our one-to-many approach focuses on delivering outcomes for the utility. By engaging customers via technology and a carefully orchestrated outreach process, we identify problem areas and target those to either rehab or clean-out the portfolio. 

We adapt our approach in this group of customers based on the size of their flexible electric load and historic reliability during DR dispatch events. There is a simple spectrum of activities (*see figure) applied to each group to ensure we engage in the right way at the right time. 

Large, reliable customers are golden; we show appreciation with a personal touch, remind them of available resources, and offer more dedicated support if needed. 

Large, unreliable customers are a risk for a DR provider like Enel. We spend most of our time with this group to uncover barriers to participation. After reviewing the equipment at the enrolled facility, we look for load reductions that are less disruptive to their core operations. By reviewing the on-site flexibility in the context of DR program parameters, we can adjust the enrollment up or down to more realistic levels, thereby ensuring more reliable performance.

The true value of DR lies in the aggregation of thousands of small reductions – every little bit counts – and where one customer fails to deliver, another may provide more than their share. Smaller customers are incredibly important for a portfolio to work, so the ability to reach customers at scale is paramount.  Our small, reliable customers receive surveys to provide feedback and review a checklist of preparation steps that can be completed in Enel’s online platform. Customers that are due for renewal receive updated contracts via DocuSign with an option to schedule time with a rep to review terms. Follow-up to these contracts is critical for retention and the more personal the touch points, the better. This part of the process can become a time sink, but personalized persistence and using a variety of communication mediums have proven to be very effective. 

Unlike other business models, Enel’s DR customers have a responsibility to participate. If a portfolio fails to deliver on its commitment, Enel incurs penalty fees from the utility and the reliability of the resource is called into question. We do not pass along these under-performance penalties to customers, so this a calculated risk that Enel takes on as an aggregator. If customers consistently do not show up, we must remove them from the program and consider this “healthy churn”.