Let’s look back on your DR journey so far….
You have spent time defining why your organisation is exploring demand response, and you have a vision that it will be a core part of your business operations at some point in the future. You are piloting a range of demand response programs to learn about aspects such as how best to engage your customers and how to secure the most NegaWatts (NW) with the least effort to you and least impact on your customers.
You have considered time horizons, and your roadmap shows you first exploring automated demand response with commercial and industrial (C&I) customers. Next, you will be dipping your toes in the residential space, starting with behavioural based demand response. You know automated demand response at a residential level is coming, but for the moment you will stick with technical pilots to make sure you have confidence in addressing challenges such as installation, network management, and potential cyber-security risks.
Everything looks good until someone asks the simple question, “what does success look like?”. You realise that aside from some motherhood statements you have no data points to show you are heading in the right direction.
Demand response often starts as a pilot, and the metrics captured are specific to that pilot. We rarely take the time to design metrics that define long-term success that we can use over time to show progress. Considering your long-term objectives up front will help you make decisions on program scope and design.
The most obvious long-term metric at a macro level is the cost per kW given this is what will ultimately determine if demand response is called upon as opposed to leveraging supply side capacity. There are several supporting metrics you need to measure as these collectively make-up your cost per kW such as the cost to acquire and retain customers to be part of your programs and the cost per kWh paid in incentives. There are several others key metrics that, when combined, make up your cost per kW.
For each of the key metrics, you are likely going to want to view them based on customer segment, response time, and so on.
Once you have relevant data-points in place and you run your first pilot, you can create your baseline. As you introduce new pilots, try new technologies and design new incentive models, you can use your baseline to track how you are progressing against your agreed success criteria.
What metrics are you using to be confident that your demand response program is heading in the right direction?
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