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Demand response programs yield significant energy savings

Demand response (DR) programs are intended to reduce peak electrical demand on a utility system through the use of load control devices installed in residential or commercial buildings with customer permission. One method of DR is to use a device that controls loads such as air-conditioners or electric water heaters by cycling them on and off during peak load events, reducing instantaneous load on a utility’s system. Another method is to simply curtail service during peak events according to formal agreements between the utility and customer; in such cases, customers typically rely on backup generators to satisfy their power needs during a curtailment.

While the peak demand savings of DR programs are well understood, the energy savings of such programs are less understood. This is because of “snapback” effects, defined as the increase in energy or demand in the hours immediately following a DR event. Snapback results when controlled equipment is allowed to return to its operating set point following the event, and may offset all or part of the energy savings that were achieved when the equipment was cycled off or partially curtailed.

Given the importance of achieving energy savings under Minnesota’s 1.5% Energy Efficiency Resource Standard for CIP, as well as the widespread deployment of DR programs by Minnesota utilities, Commerce awarded a CARD grant to Michaels Energy of La Crosse, Wisconsin to study and quantify energy savings from DR programs. Michaels used a two-pronged approach for this project:

  1. Analyzing actual system load and DR data from two Minnesota utilities
  2. Modeling different DR technologies in typical residential and small commercial buildings in Minnesota.

Michaels’ research showed that while snapback effects are significant, there is still a net energy savings from most DR programs. The study further concluded that the size and impact of the snapback after a DR event depends on the utility’s customer base: the larger the portion of residential customers, the larger the snapback after a DR event and the lower the net energy savings expected. The snapback and normalized energy saving results from the analysis of system load data for each of the two utilities is shown in Table 1.

The source and customer energy savings per DR event have been normalized by load relief and load control capacity to make the results more meaningful to other utilities. The results for the two utilities differ due to their generation mix, customer mix, the number of customers enrolled in the DR programs, and other factors.


IOU G&T Co-op Units
Load Relief for Event 454 184 MW
Net Source Savings for Event 46,659 19,507 MMBTU
Net Source Savings for Event/MW Control Capacity 50.55 41.5 MMBTU/MW
Net MWh/MW Load Control Capacity 3.7 2.85 MWh/MW
Net Energy Saved 3,417 1,339 MWh
Table 1. Utility DR Analysis Results per DR Event

Based on the residential modeling results, Michaels determined that air-conditioning and electric heat cycling produce the largest net savings, while electric thermal storage does not produce any net savings. Based on the commercial modeling results, ice storage is a viable DR strategy for small commercial customers with rooftop units, offering significant peak demand savings at the expense of increased off-peak energy use, a favorable trade-off given that peak energy is much more expensive. The modeling results from this study could be used as the basis for developing new DR measures in Minnesota’s Technical Reference Manual.

A copy of the final report, “Demand Response and Snapback Impact Study” (pdf), is available on the Commerce website. In addition, a Demand Response Calculation Tool was produced to estimate system effects of DR programs and is also available on the website. Please contact project manager Joe Plummer or CARD grant program administrator Mary Sue Lobenstein with any questions concerning this project.