New Berkeley Lab report highlights barriers and opportunities to broader delivery of electric utility IDSM programs

Event Date:

March 8, 2018 - 9:30am

We are pleased to announce the release of a new Berkeley Lab report: "Barriers and Opportunities to Broader Adoption of Integrated Demand Side Management at Electric Utilities: A Scoping Study."

Integrated demand-side management (IDSM) is a strategic approach to designing and delivering a portfolio of demand side management (DSM) programs to customers. IDSM typically delivers customer-centric strategies with the goal of increasing the amount of DSM in the field, but doing so in a way that integrates various measures and technologies to improve their collective performance and/or penetration.   For the purposes of this report, IDSM is defined as the integrated or coordinated delivery of three or more of: (1) energy efficiency (EE), (2) demand response (DR), (3) distributed generation (DG), (4) storage, (5) electric vehicle (EV) technologies, and (6) time-based rate programs to residential and commercial electric utility customers.

The electric industry's limited experience deploying IDSM to date suggests that significant barriers may exist. This scoping study explores recent electric utility experience with IDSM to provide an assessment of the barriers and potential benefits perceived or experienced by program administrators in their attempts to implement integrated programs. The research draws on surveys and interviews with eleven staff from a sample of eight DSM program administrators and program implementers who were currently implementing or had previously attempted to implement an IDSM program or initiative.

Our respondents indicated that the most important drivers for implementing IDSM were: 1) compliance with regulatory mandates to offer IDSM; 2) ability to deliver more or a broader range of technologies that can optimize customers' energy consumption; 3) reducing market confusion for customers facing multiple DSM program offerings; and 4) increasing customer engagement and satisfaction. Some of the respondents indicated that they are seeing the benefits of IDSM beginning to materialize, or showing the potential to materialize. The most commonly cited benefits include: 1) reducing peak demand beyond what DR programs can deliver alone; 2) increasing customer participation and delivering more DSM to customers; 3) addressing locational and/or temporal grid needs; and 4) improving the cost-effectiveness of DSM programs.

The respondents also identified key barriers to broader IDSM implementation that fell under the purview of either regulators or program administrators. The most commonly cited regulatory barriers include: 1) separate program budgets and funding cycles for EE, DG, DR, EV and storage; and 2) lack of effective cost-effectiveness evaluation metrics for integrated programs. Most-cited barriers within program administrator organizations include: 1) separation of responsibilities within organizations for delivering various DSM programs and technologies; 2) technology interoperability issues; and 3) customer market confusion.

The program administrators also reported on the actions they had undertaken to promote expanded delivery of IDSM. The most common action taken was to consolidate responsibilities for delivering some DSM technologies to one or a smaller number of departments within the organization. Other actions included: 1) transitioning customers to retail rates that align with IDSM objectives; 2) developing education and outreach material that combined information about DSM technologies and measures that historically fell under different programs; and 3) consolidated responsibilities for delivering some DSM technologies to one or a smaller number of market providers (e.g., aggregators).

Finally, respondents provided their assessments of the most important under-tapped opportunities for expanding IDSM efforts, both for program administrator and regulatory organizations. The most frequently-cited opportunities that could be implemented by administrators include: 1) dedicated IDSM administrative and program implementation activities; 2) support of industry and internal efforts to advance interoperability and controllability of measures that can be included in IDSM programs; and 3) expansion of opportunities for new market entrants to deliver IDSM solution. The top-cited regulatory actions include: 1) standardization of cost-effective metrics across DSM program types; and 2) dedicated IDSM program budgets. 

The report can be downloaded from: https://emp.lbl.gov/publications/barriers-and-opportunities-broader

A webinar presentation on key findings of the report will be presented on Thursday, March 8, 2018, 12:30-1:30pm EST. Please register for the webinar here.

Berkeley Lab is grateful for the funding support of the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy.