Auction platform for demand response is unveiled
World Energy Solutions Inc. today unveiled an auction platform that will allow companies to price-shop for so-called "demand response" firms that pay businesses to curtail their electricity use during times of peak demand.
Doing so helps regional grid operators, like ISO New England, manage electricity loads and prevent blackouts. "When you have multiple suppliers bidding on someting, the customer wins. It's all about the competition," said Dan Mees, a spokesman for World Energy.
The Worcester company is perhaps best known for the auctions it runs for the one-year-old Regional Greenhouse Gas Initiative, a 10-state coalition stretching from Maine to Maryland. The coalition aims to limit greenhouse gas emissions from area power plants by requiring those plants to buy allowances for every ton of carbon dioxide they emit, giving them a financial incentive to cut those emissions.
Mees said the company decided to launch its demand response auction platform, called the World DR Exchange, after realizing that more companies had become familiar with the concept of demand response and were starting to wonder "what is my curtailable load really worth?"
In a statment released by the company, World Energy chief executive Richard Domaleski said: "Just as we have done for energy procurement in deregulated markets, World Energy is now doing for demand response -- creating an efficient, transparent and liquid marketplace that benefits customers and suppliers alike."
World Energy already has held several demand response auctions, according to Mees, with promising results for customers like Gerber's Poultry Inc. in Ohio.
"A month or so ago, we didn't know much about demand response, but today, thanks to a prior investment we had made in back-up generation, a recent seminar on th topic, and our work with World Energy, we have over $100,000 in new DR revenue coming back to our facility," Gerber Poultry chief financial officer John Metzger said in a statement released by World Energy. "This was a new process for us and World Energy made it easy, bringing together serveral providers to bid for our business in a nicely structured online event."
The fact that demand response has become mainstream enough that World Energy feels it can make a successful go of such auctions is good news for the industry, according to Gregg Dixon, senior vice president of marketing at EnerNOC, a demand response firm in Boston that has worked with customers to manage energy usage for the past several years.
But, he said, the company questions whether all a customer's energy management needs will be met if they search for a demand response partner based solely on how much that firm will pay them to reduce their usage.
Mees said World Energy feels there's enough room in the demand response sector for its auction and established "curtailment service providers," or CSPs, such as EnerNOC.
"We're going to be providing customers to the CSP community at a very low cost," Mees said. "EnerNOC is still going to go out like any other company and do its own big game hunting and land its own customers."