Ask the Energy Experts: How does demand-response affect controlled equipment?

Western customers use our Energy Experts hotline, 800-769-3756, to ask questions about how programs or technology works in a utility setting. Recently, we heard through the grapevine that some customers have been talking among themselves about a particular topic. We assume there are others wondering about the same things, so Energy Services Manager Ron Horstman posed the question to the Energy Experts:

I would like to know if utility demand-reduction (DR) programs that remotely control end-use water heaters and HVAC [heating, ventilation, air conditioning] systems could potentially damage that equipment or void manufacturers’ warranties. Also, do DR programs create distribution system voltage sags when a large number of appliances resume full operation at the same time?

Based on initial research and discussions with experts in the field, it appears that DR controls have minimal effect on equipment:

  • End-use equipment nearly always survives occasional power outages without serious damage, and power outages are much more severe and widespread than demand response programs.
  • A search of literature in the Energy Experts database revealed little documentation of this as an issue.
  • DR specialists at companies including energy data analyst E Source and energy management technology provider Comverge noted few if any reports of such problems. However, one cautioned that equipment owners do need to be aware of conditions that can void manufacturer’s warranties, such as restricting shut-off times to a minimum of five minutes.
  • Demand response control may increase or decrease the number of operation cycles—the number of times the equipment turns off and on—depending on the length of time during the DR event the customer agrees to allow interruption of operation. As long as the equipment has time to cool down between interruptions, the change in the number of operation cycles during a DR event represents a tiny percentage of the equipment’s annual cycles, so it is unlikely to “wear out” the system.
  • Because peak demand programs are a common and widespread load management strategy, manufacturers have designed their equipment to accommodate remotely controlled cycling.
  • “Smarter” grids bring more nuanced capability for equipment control.

Changing with times
Nevertheless, because many customers and some utility professionals continue to be concerned about the effects of DR on equipment, the issue is worth exploring further. DR control can range from an add-on Wi-Fi kit to a thermostat with additional useful features to a fully integrated appliance. Utilities find it challenging to interface with the wide variety of HVAC control system makes and models, but technology and experience are improving.

More and more manufacturers are offering equipment specifically designed to interact with peak demand control systems. This includes a control input on the device that allows utilities to easily connect it to a compatible DR communication module. These more sophisticated interfaces facilitate smoother load shedding, as well as load-shifting strategies like precooling a space or preheating a water tank in preparation for a peak-demand event.

Controlling air conditioners
The most common DR approach to HVAC equipment is controlling the condensing unit outside the building, so the supply fans continue to operate. The fan uses just a fraction of the energy of the compressor. Shutting the unit off by remotely setting back the thermostat is another simple control method.

On some equipment, the condenser and thermostat are not separately powered. Window air conditioners are one example, and these units account for 58 percent of air conditioning in the U.S., according to the U.S. Energy Information Administration. ThinkEco, a smart-control developer and provider, offers a Wi-Fi-connected Smart AC kit that is installed between the electrical outlet and the plug-in air conditioner. The company reports that the kit works with 90 percent of window air conditioners. On the remaining units, the compressor either did not come back on after power was restored, or came back on after several minutes.

ThinkEco and Carrier teamed up to integrate Carrier’s Comfort-choice thermostats and ThinkEco’s Modlet (modern outlet) cloud platform. This gives utilities access to real-time load data for window air conditioners and real-time demand-response control capabilities, while giving users control of all aspects of their air conditioner through their smart phone. Another ThinkEco partnership with Frigidaire integrated the same capability into a window air conditioner that retails for $270. New York City, which has the largest stock of window AC units in the U.S., offers a $125 rebate to residents for installing this air conditioner.

Motor issues
Electric motor damage is another concern for program managers and equipment owners. It is true that turning a motor on and off many times per hour without allowing time in between for cooling can damage the windings. However, in a demand response scenario, utilities don’t cycle controlled equipment that frequently. Customers can typically choose to have their equipment turned off 50, 75 or 100 percent of the time during peak events.

What about water heaters?
Regarding heat pump water heaters (HPWHs), a paper by the National Rural Electric Cooperative Association’s Cooperative Research Network compares the performance of HPWHs in a demand response scenario with an electric resistance water heater. “How Will Heat Pump Water Heaters Perform in Demand Response Programs” mentions the possibility of damage to compressors due to cycling and product warranty voids. Authors also suggest that the cost-effectiveness of using HPWHs in a DR program calls for more study.

The graph below indicates that HPWH energy use doesn’t peak nearly as much as electric resistance water heaters during typical times of utility peaking events, and they use considerably less energy. So the best solution to those possible issues may be to simply not include the systems in DR programs.


Water heater manufacturers have begun to include a port for grid connection using Modular Communications for Energy Management (CEA 2045), a common communications protocol established in 2013. Even before that, the Department of Energy found that some water heater manufacturers not only supported grid-connected appliances, but were already developing the devices.

Designing for unique customer
Industrial equipment requires a different approach to demand response. These customers use much more energy than residential or commercial customers, making them an attractive target when utilities need to shed a lot of load quickly. However, abruptly interrupting production can cost plants hundreds of thousands of dollars. Utilities must work with industrial facilities managers on an individual basis to minimize the effect of DR programs on operations.

Powering back up
Finally, there is not a significant risk of creating a distribution system voltage sag when the DR event ends and the utility brings the controlled loads back online. Although an AC motor can have inrush currents of six to eight times more than full load, utilities plan demand response to bring groups of customer loads offline and online in stages. The impact of restoring isolated equipment to a subset of customers and in stages is far less severe than restoring full power to all customers all at once after a power outage.

Ultimately, most HVAC and water heating equipment can handle demand response controls—either by power interruption or by on-site controls—without damage or voided warranty, as long as the interruption allows enough to allow the unit to cool down. Manufacturers typically specify a minimum time of five minutes.  A safer approach is controlling HVAC systems by setting back web-enabled thermostats, allowing the on-site control system to ramp down and ramp up in a normal way rather than by a sudden power interruption.

More resources

Catching up on industry news

Welcome to 2015, a time to start fresh and explore new territory. Whether that means launching or updating efficiency programs, seeking out more education or bringing attention to your successes, here are some news items to help you on your way.

Efficiency increases in 2014
Watch for new appliance efficiency standards from the Department of Energy. In 2014, DOE issued a total of 10 new or updated standards, including commercial refrigeration, electric motors, external power supplies, furnace fans, metal halide lamps, wall-unit air conditioners and walk-in coolers. Altogether, these 10 standards will help reduce carbon dioxide emissions by more than 435 million metric tons and save American families and businesses $78 billion in electricity bills through 2030.

Source: Appliance Standards Awareness Project 1/16/15

Regulations matter
According to the Edison Foundation Institute for Electric Innovation (IEI), fixed-cost recovery mechanisms play a significant role in supporting electric efficiency. The 2014 IEI report You are leaving found that investment in energy efficiency depends on state policies that allow utilities to pursue efficiency as a sustainable business as well as state mandates for energy efficiency.

Fixed-cost recovery mechanisms, such as decoupling and lost revenue adjustment, help a utility recover the marginal revenue associated with fixed operating costs. Utilities appear to be more willing to invest in programs to reduce energy use if state regulations allow them to recoup their losses.

The American Council for an Energy Efficient Economy (ACEEE) bolsters the IEI report, with nine of the top 10 states on its 2014 State Energy Efficiency Scorecard You are leaving having a fixed-cost recovery mechanism.

Source: SmartWatt Energy News, 1/15/15

Dive into hot water
Drought will continue to be a major concern in 2015, so events that focus on water use may well become the hot ticket. The ACEEE Hot Water Forum Redirecting to a non-government site (HWF) is now in its sixth year of gathering experts to discuss making water hot, distributing it with low losses, and employing efficient fixtures and practices. Professionals from manufacturing; distribution (plumbing); electricity, gas and water utilities; government; and the research communities will meet in Nashville, Tennessee, Feb. 22-24 to learn from each other and build momentum for market transformation.

The conference emphasizes both the technical efficiency potential and the policy implications of service hot water technology and practices, and how people use hot water. In recent years, key topics have included:

  • Standards and rating methods
  • Grid-interactive electric water heating
  • All about heat pump water heaters
  • The latest in innovative technologies
  • Efforts to improve residential water heating efficiency
  • An international perspective on water heating

Utilities still have a great deal to learn about the water-energy nexus  and its potential for cost and resource savings.

Since 2008, this conference has provided a venue for all members of the hot water community to collaborate and share new ideas.

Source: American Council for and Energy Efficient Economy, 1/17/15

Learn something new
If professional development is on your list of resolutions, check out the pre-conference training sessions that kick off the National Conference of the Association for Energy Services ProfessionalsRedirecting to a non-government site (AESP) in Orlando, Florida, Feb. 9-12.

The sessions include:

  • Behavior Change and Energy Efficiency Programs
  • Intro to the Principles of EM&V (Evaluation, Measurement and Verification)
  • Leadership Training for Exceptional Team Performance

The fee for each course is $545, and continuing education units will be available. You don’t have to attend the conference to take advantage of the workshops, but AESP events are always great for networking and expanding your horizons.

Source: Association for Energy Services Professionals, 1/14/15

Get recognition
Submit your successful peak load and demand response management programs, initiatives and achievements for the 12th annual PLMA Awards Redirecting to a non-government site. The Peak Load Management Alliance (PLMA) is accepting nominations through March 2 for the following categories:

  • Program Pacesetter – recognizes outstanding programs that effectively support and deliver peak load management
  • Technology Pioneer – recognizes innovative applications of technology with demonstrated potential to scale
  • Outstanding Thought Leader – recognizes the impact of projects, outreach campaigns and individual contributions that have the potential to shape the industry’s future

You don’t have to be a PLMA member to nominate a program, and self-nominations are appropriate. One or more awards will be presented in each category with sub-categories for Utilities, Regulators, Independent System Operator/Regional Transmission Operator, Aggregator, Marketer, Consumer, Solutions Provider, Manufacturer, Individual, Organization or Project.

The awards will be presented at the 16th PLMA Spring Conference Redirecting to a non-government site, April 28-29, 2015, in Tucson, Arizona.

If you are interested in joining PLMA, the nonprofit now offers membership in three tiers. Utilities and other program providers may now join as associate, advising or sustaining members. Membership offers access to networking events and training, and the opportunity to participate in committees and working groups at various levels.

PLMA provides resources and advocacy for organizations involved in demand response initiatives, recently announced a change to its membership structure.

Source: Peak Load Management Alliance, 1/16/15

Energy Services is always on the lookout for information to help our customers cope with the challenges of delivering power in a changing industry. Feel free to share news items about events, programs, policies and technology that your utility finds useful.