The most important activity when starting your demand response journey is to know your why. Within my CLASS framework, discovering your real why is one of the first activities, and to this day it remains the most challenging. Utility professionals usually start this activity confident they understand their organizations ‘why’. Pretty soon it becomes apparent that maybe they don’t.

The CLASS activity, called Drivers, applies the simple but proven five whys technique, first developed by Sakichi Toyoda in the 1930s.  In completing the activity, I get the demand response program team together, including the sponsor and I start with the obvious questions:

Q. “Why is your organisation interested in exploring demand response?”
A. “To reduce peak demand”.

Q. “Why are you looking to reduce peak demand?”
A. “To defer or avoid investments in infrastructure”.

Q. “Why do you want to reduce your investments in infrastructure when return on capital is how you make your money?”
A. … (At this point the body language of many start to show that the team are getting a little uncomfortable. Often, they look to the most senior person in the room for direction.  It is now we are getting to the real why. Whilst uncomfortable, this is critical so everyone on the team can move forward confident in understanding the reasons their organization is exploring demand response).

The answers now vary, for example, some will say they are expecting rule changes that will make demand response as, if not more, financially attractive than building new infrastructure so they want to be ready to scale. Others may believe rule changes will force them to invest in demand response, resulting in lower revenues so they need the capability but are not looking at ways to delay it scaling out. Some may not believe demand response will have a material impact and are therefore piloting to provide sufficient evidence that it is too costly, too unreliable, etc.

The core driver is not important. What is important is that everyone in the room understands what it is and why it is. With this level of clarity all future decisions associated with the program become easier to make and messages to stakeholders clearer and more authentic.

Do you know the real reason why your organization is embarking on its demand response journey?

 

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