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Mechanism B: Joint Marketing of Energy Efficiency and Demand Response Programs B.1 Introduction This topic examines the synergy that may exist in the cost of administering energy efficiency and demand response programs together, rather than separately, to address the curtailment and efficiency behaviors of residential consumers that result in energy savings. Curtailment involves overt repeated behaviors, such as turning off lights or keeping thermostats at a lower level, while efficiency behaviors involve one-time actions such as insulating or changing light bulbs to compact fluorescent light bulbs (Gardner and Stern 2008). Consumers generally associate energy savings with curtailment actions, although analysis indicates that efficiency actions can yield the largest potential savings. Utilities and other organizations administer demand-side management programs to influence these behaviors, generally through incentive programs and price signals in the case of curtailment, and information programs in the case of efficiency. The program offerings are often administered separately, which provides the opportunity to combine the program offerings to reduce the administration cost and/or increase the savings from curtailment and efficiency programs, which is the topic of this paper. B.2 Review Demand response is most closely associated with curtailment behavior, as distinct from energy efficiency measures and behavior.1 While often achieving similar goals, Table B.1 outlines how energy efficiency and demand response can be differentiated based on the primary focus of their application and the expected result of implementation. As noted in Table B.1, demand response is principally designed to reduce peak/critical loads while energy efficiency is designed to reduce overall energy consumption. Thus, demand response concepts may result in load shifting and, in turn, may or may not provide realizable energy savings. Energy efficiency is designed to generate long-lived savings while demand response is designed to respond in a shorter time period to specific surges in peak power load (Nemtzow 2006). Demand response, it should be noted, can also result in energy efficiency gains, as documented later in this topic. 1 Among the benefits provided by the smart grid technology is the ability to automate demand response, whereby the customer agrees to allow the utility to remotely control certain loads during certain times and/or price events. B.1PDF Image | The Smart Grid: An Estimation of the Energy and CO2 Benefits
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