Demand Response plays a vital role in grid stabilization during hot Summers, easing severely constrained electrical grids from coast-to-coast. Future energy crises caused by electricity demand exceeding system capacity can be postponed or even averted through Demand Response. The U.S. Federal Energy Regulatory Commission (www.ferc.gov) defines DR as “changes in electric use by demand-side resources from their normal consumption patterns in response to changes in the price of electricity, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.” The ability of DR to avert an energy crisis is so promising that one FERC Commissioner has identified DR as the “killer application” for the Smart Grid.
Automated Demand Response or ADR helps system operators reduce the operating costs of DR programs while increasing DR resource reliability. For customers, ADR reduces the resources and effort required to achieve successful results from these DR programs. Automation is what also makes it possible to translate changes in wholesale markets to corresponding changes in retail rates, enabling customers to respond to DR signals in real-time to reduce demand.
Successful implementation of ADR requires standardization allowing wholesale producers to communicate with utilities and aggregators, who in turn communicate with their customers, who can then reduce demand during peak periods. Without an ADR standard, automated DR would be difficult and costly to implement. System development, integration and installation costs could grow to prohibitive levels, and these proprietary and expensive assets could eventually become stranded. Simply put: Without a standard, it would be difficult for utilities to effectively implement this “killer application.”
Open Automated Demand Response (OpenADR) is an open and standardized way for electricity providers and system operators to communicate DR signals with each other and with their customers using a common language over any existing IP-based communications network, such as the Internet. As the most comprehensive standard for Automated Demand Response, OpenADR has achieved widespread support throughout the industry.
The OpenADR Alliance was formed by industry stakeholders to foster the development, adoption and compliance of the Open Automated Demand Response (OpenADR) Smart Grid standard utilizing existing standards from OASIS, UCA and NAESB.