DEMAND RESPONSE & BACKUP GENERATION
The cost of delivering electricity to your facility makes up about 40% of your monthly energy bill. Demand Response programs give you the ability to mitigate delivery costs and/or receive payments by curtailing your usage during peak demand events. Texas Energy Exchange will review your usage information and work with our experts to formulate a plan that gives you the maximum benefit without disrupting your operations.
Demand Response Programs
4 Coincident Peak (4CP)- Every year, during the 4 summer months (June, July, August, and September) the Transmission and Delivery Service Provider (TDSP) that services your area will mark the 15 minute interval in which the system reached its peak demand in each month. They will then set your 4CP delivery charges for the next year based on your demand during those 4 intervals. By predicting when those events will occur, our experts can alert you to curtail your usage during that time to reduce your 4CP charges in the following year. Annual Savings: $50,000 per MW
Have you considered what would happen to your business in the event of an extended blackout?
If you are a large energy user, power outages could have a devastating financial impact on your operations. Backup generation is a great solution to protect large users from the operational liability of power outages and grid failures.
Installing backup generation gives you the ability to enroll your entire load into Demand Response programs with no impact on your operations. When a Demand Response event is called, instead of curtailing usage the generator will kick on seamlessly and supply you with power to continue operations as normal. You will be using little to no energy from the grid during this time, but your energy needs will be fully covered by the generator. Most of the time demand response revenues will far exceed the cost of financing backup generation, so you will receive a strong positive cash flow from the investment. The NPV calculations of this investment, as well as the benefit of protection against power outages, makes this option extremely attractive.
Property Assessed Clean Energy (PACE) is a program in Texas that incentivizes larges users to invest in assets that promote energy efficiency, such as backup generation. This program gives companies access to 100% up front financing, and allows for amortization of the debt over the useful life of the generator. The savings provided by the generator will usually exceed the annual repayment obligation, creating a positive cash flow from the investment.
A backup generator can give you access to more flexible contract options and act as a physical hedge to protect your company from high or rising energy costs. When you enter into a contract for a fixed energy rate, you are employing a financial hedge to guarantee an agreed-upon rate. Instead, you can select an index-rate contract that fluctuates with the market. When the price of energy rises, the generator can be used to supply power. When the market price of energy is cheap, energy can be drawn from the grid. Index rates in ERCOT have averaged around $0.024-$0.026 per kWh over the last few years, so this option can be very financially attractive.
Get in touch with one of our experts to see if Demand Response or Backup Generation makes sense for your business!
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