In recent weeks I have described the four steps of the CLASS framework for demand response. During the months when I was developing this framework, there was something constantly nagging at me. While the four steps of Clarify, Lead, Articulate, and Solve would deliver outcomes, I kept thinking about the roadblocks that I, and industry peers globally, had faced over the years.
As I poured over the details of these roadblocks a pattern emerged, and it became apparent that there was a need for a step in the framework to run in parallel to Solve, and that step is Scale.
As stated in my previous post, all demand response programs I am aware of have started their life as a pilot or proof of concept. These early-stage demand response initiatives are often under time and resource pressure. The primary objective of these initiatives is to understand if demand response can solve a particular problem, such as the reduction of critical peak demand.
Pilot leaders passionate about proving their case will take all efforts to ensure success. Their focus, as it should be, is to identify which customers to engage, to engage them effectively, to pay a proper incentive, and to secure the demand cut. They spend their time designing and executing a great program, taking in all the lessons learnt from around the world.
Momentum builds as test after test shows increasing success, then as the conversation moves to scale out, cost estimates spiral, the business case no longer looks as good, and fingers start to be pointed. What went wrong?
Running anything at scale is very different from managing a small pilot. During a pilot, you may calculate the demand cut using a spreadsheet, you may contact customers by phone, or even door knock. You may pay customers incentives by sending them a cheque or manually adjusting their bill. For automated demand response, you may visit a customer’s premise or talk them through how things should be set-up. None of this will work at scale. The problem is, trying to run a pilot designed for scale will often be so expensive the pilot never gets off the ground. So, what is the answer?
You must continue to design and deliver the pilot focused on the primary goal while keeping costs to a minimum. In parallel, you need some people who are thinking about how your demand response capability (people, process, and platforms) will look at scale, feeding you their recommendations. Over time, these recommendations need to be integrated into your plans, possibly even incorporated into future pilots. Once you have reached the point that you are ready to transition from pilots to operations there will be no ‘sticker shock’, no surprise roadblocks, and no pointing fingers.
Is your demand response pilot considering what will be involved to scale out and integrate into your primary business operations?
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