Data Centers Have the Grid’s Answer for the Fourth “D”
Much has been made in the energy industry during recent years of the “3 Ds,” the macro trends of digitization, decentralization, and decarbonization that have driven the electric grid’s transformation toward a cleaner, more dependable, and efficient future.
The 3 Ds are generally considered to be positive trends rooted in good intentions for the grid and society.
There is, however, a fourth “D” that has been nothing short of a costly troublemaker for the grid since its inception and threatens to undermine every good deed the original 3Ds seek to accomplish.
“Disruption” has been the grid’s ever nemesis since Thomas Edison fired up electricity’s first electric grid in 1882 at Pearl Street Station in lower Manhattan. Like any arch-villain, disruption has a knack of showing up at the most inconvenient of times, particularly when the grid is already vulnerable.
Consider the most disruptive grid events of the last decade. Most were weather-related and resulted in blackouts.
Actually, we don’t have to flip too far in the history book for evidence of weather-related disruption pushing the grid to the brink of total failure. The tragedy this past February in Texas when record winter temperatures forced the ERCOT grid to suffer its first blackouts in a decade is a prime example of disruption’s wicked handiwork.
The California blackouts in August of 2020 that took place during an extreme heatwave in the western US are another example and prove that disruption doesn’t partake in an offseason.
Unfortunately for the grid, disruption is a devil that takes many forms. The COVID pandemic is a prime example.
The lockdowns during 2020 led to electric loads shifting from commercial buildings to residential, which caused grids across the US to work overtime to ensure electric supply and demand remained in balance.
Like death and taxes, disruption may very well be an inevitable fate for the grid. Yet throughout history, fate has had a way of swinging favor back toward the good guys.
Demand response, the practice by which organizations are financially rewarded for shifting load from the grid during times of stress, is a case in point.
We’ve previously written how demand response has been in the US electric grid’s defense arsenal for decades. Today, with the proliferation of distributed energy resources (DERs) adding to that arsenal, demand response has proven to be an even greater thwart to grid disruption than ever before.
Data Centers, with their penchant for owning on-site DERs such as backup generators and energy storage, are in a prime position to participate in demand response and help the grid fend off disruption when the last (or any) of the 4 Ds rears its ugly head.
Across the country, an increasing number of data center organizations are realizing how helping the grid pays immeasurable dividends for their local communities.
During February’s grid collapse in Texas–which tragically resulted in hundreds of citizens losing their lives–data centers proved to be the local heroes.
Data centers participating in demand response programs provided flexible energy resources at the critical times when the ERCOT grid needed them. These resources played an integral role in keeping the grid from a total collapse, which ERCOT has stated was minutes away and would have kept much of the Lone Star State in the dark and freezing for weeks.
For their helping the ERCOT grid, these Texas data centers earned a substantial demand response revenue payment. But it’s their stewardship of community sustainability that should be noted and applauded. Fortunately for data centers, sustainability recognition for demand response participation is starting to garner measurable notice.
Demand response and all forms of demand-side energy management allow the grid to continue its transition from a fossil-fuel-dominated past to a renewable energy future.
Disruption, be it of the foul weather variety or some other adversarial pill will be waiting in lie around every bend of our journey to energy’s future. Within their sophisticated suite of behind-the-meter energy assets, data centers have the antidote to disruption’s poison.
The modern world relies on data centers’ megabytes. The grid and local communities nationwide are counting on data centers megawatts.
To learn more about how data centers can help the grid, reduce their carbon footprint, and improve their local communities’ sustainability, download CPower’s latest ebook: “A New Age of Demand-Side Energy Management.”
Three Reasons Your DER Strategy Isn’t Working Like You Planned (and how you can be creating more value)
The electric grid is amidst a transition to a cleaner more dependable and sustainable future. Today, the grid needs flexible resources many organizations currently possesses to complete that transition. These Distributed Energy Resources (DERs) include: energy storage, generation, demand response, energy efficiency and many more. The solution sounds simple, implement DERs, help the grid, improve sustainability and lower energy costs. But for most, this far more complex that it sounds. Join us for this 30-minute webinar to learn the four reasons that your DER strategy may not be working like you planned. It’s never too late to create or adjust a strategy that saves resources, drives better resilience and grid reliability, more cost savings and a predictable revenue stream.
Watch now to learn these four common errors and what you can do to get your strategy on track for success through site-level optimization, automation, and holistic energy management.
Key Takeaways/Learning Objectives:
What is driving the Grid and DER evolution
The four most common reasons DER strategies don’t deliver
How to start improving your DER and Energy Management strategy today
How to maximize the value of your assets
Presenters:
Rob Windle, Executive Director, Distributed Resources
Mr. Windle directs his energies to expanding the monetization of distributed energy resources (DERs) such as decentralized energy generation and battery storage. DERs allow energy consumers to generate financial cost offsets and revenue benefits from increased energy markets participation while leveraging existing and planned systems infrastructure and assets. Previously, He has more than 20 years of experience in direct and channel sales, channel program development, and management within the Energy, Enterprise Software, and Automation Controls industries. Mr. Windle is a Certified Energy Manager and serves as a board member of the Technology Association of Georgia’s Smart Energy Solutions group. He received his Bachelor of Science degree in Industrial
Engineering from the University of Cincinnati. Mr. Windle and his wife live in Atlanta, Georgia.
Millie Knowlton, Sr. Manager, Strategy & Business Development
Millie is the senior manager of strategy and business development at CPower Energy Management, a leading national energy solutions provider. In her role, Knowlton leads new product development and commercialization. Prior to CPower, Knowlton spent four years at Tesla working in commercial energy storage, grid services, and project development. Knowlton has a master’s degree in Environmental Change and Management from the University of Oxford.
ERCOT’S Roadmap to the Future Includes Distributed Energy Resources
On July 13, 2021, ERCOT announced the delivery of its “Roadmap to Improving Grid Reliability,” a 60-item plan that addresses needed improvements to ERCOT’s electric grid with the aim of avoiding future failures like the one experienced this past February when much of the state was left without power and over 200 people died amidst record-setting winter temperatures.
In an official press release announcing the Roadmap’s delivery, ERCOT Board member and Texas Public Utility Chairman claimed the map “puts a clear focus on protecting customers while also ensuring that Texas maintains free-market incentives to bring new generation to the state.”
The notion of the free market is one we at CPower have often discussed in explaining how the ERCOT market differs from others around the country. From its very founding, ERCOT’s energy-only market was designed to let economics, not legislation, drive the action within its marketplace.
In the wake of February’s tragedy–and the harrowing death toll certainly qualifies the event as such–there has been a wealth of debate in Texas and throughout the US on whether ERCOT’s economically driven approach to grid reliability is the best way to avoid future grid failure.
There is one curious item in ERCOT’s 60-item roadmap that is worth pointing out to large consumer and industrial organizations in Texas.
Item 19 concerning the future of distributed generation, energy storage, and demand response speaks to both legislative and financial methods of exacting change on a grid seeking to cross the bridge to energy’s future.
Item 19 of the roadmap reads as follows:
“Eliminate barriers to distributed generation, energy storage, and demand response/ flexibility to allow more resources to participate in the ERCOT market while also maintaining adequate reliability”
With this item, which is “on track” according to the roadmap, we see ERCOT is well on its way to implementing an improvement to its market that is rather similar to the intent of the Federal Energy Regulatory Commission’s Order 2222, which states:
“Order No. 2222 will help usher in the electric grid of the future and promote competition in electric markets by removing the barriers preventing distributed energy resources (DERs) from competing on a level playing field in the organized capacity, energy, and ancillary services markets run by regional grid operators.”
Language like what ERCOT submitted in its roadmap with item 19 wouldn’t raise an eyebrow had it come from any other deregulated US energy market outside of Texas.

That’s because other state and regional energy markets must comply with Order 2222 within FERC’s mandated period of time. ERCOT does not.
Here’s why:
Because its grid is isolated from the surrounding states, ERCOT’s market does not engage in interstate commerce and is therefore not under FERC’s jurisdiction.
Yet ERCOT appears to be on the road to creating a future marketplace that allows its grid to integrate the flexible DERs CPower and other demand-side energy management companies have been touting for years are necessary to maintain a balanced, dependable grid that is evolving to a cleaner future.
Here we have an example of ERCOT agreeing with Federal legislation despite the truth that they are under no legal obligation to do so.
Why?
In the simplest of terms, Order 2222 is a piece of legislation aimed at fostering just and reasonable competition in the wholesale marketplace.
ERCOT’s market is and always has been designed with competition in mind. Look no further than item 19’s language for proof that the future of ERCOT’s grid involves allowing more energy resources to enter the marketplace and compete, not fewer.
ERCOT is expressly stating that it believes more distributed generation, energy storage, and demand response in its marketplace is the best way to ensure a more reliable grid for Texas and more value for its market participants.
As the Supreme Court is fond of saying, it is written. As Texans like to say, let’s get to work and take care of business.
Demand Response Has Been Part of America’s Energy Plan for 40 Years. Why Should the next 40 be any Different?
The idea that reducing a watt of energy on the demand side can be just as valuable as generating one on the supply side in a time of grid stress is hardly new. Nor is the idea that such a solution helps thwart both energy-related and environmental crises.
The origin of demand response can be traced to roughly forty years ago when both the US and the world grappled with many of the same energy and environmental issues we are still trying to solve today.
Let’s take a trip back to the mid-late 1970s and see if a few things don’t look and sound familiar.
The oil crisis of 1973 sent shockwaves throughout the world, raising concerns on the security of electricity supply in the US while pointing to a need to diversify the nation’s power generation mix away from a fossil fuel dependency and toward a mix with a greater share of renewable and clean energy sources.
Global environmental awareness had grown to a movement large enough to be seized upon by newly-elected American president Jimmy Carter who, within a month of taking office, donned a cardigan sweater, sat before a roaring White House fire, and urged Americans to join him in conserving energy in a nationally-televised fireside chat.
During that broadcast on February 2, 1977, the president related how a particularly harsh winter had depleted the domestic supply of natural gas and fuel oil. He warned of dark consequences that awaited the most powerful country on earth if we as a nation failed to devise a sound energy plan for the future.
Sound familiar?
The 39th POTUS didn’t outright cite demand response as a means to a profitable and sustainable end that night in 1977, but he did allude to the Public Utility Regulatory Policies Act (PURPA), a piece of legislation that would be enacted in 1978 to promote more competitive energy markets in the US by allowing “non-utility generators” to participate in them.
The act would prove to be a landmark piece of legislation, setting the country on the road to conservation and the development of clean and renewable energy sources. It would also open the door to demand response as a viable solution to keeping both the electric grid and the environment in balance.
That open door paved the way for the deregulated, competitive energy markets we have today to replace the vertically-dominated regulatory ones that had existed for most of the 20th century. It also would prove to be the seed that would soon mature and bear the lucrative fruit of modern demand response.
Fast forward back to the present. Federal legislation is still working to ensure energy markets remain competitive with clean and renewable energy sources securing a just and reasonable position place in them.
Order 2222 from the Federal Energy Regulatory Commission (FERC) is a case-in-point. The Order is the latest in a series of directives aimed to create a fair balance between traditional generators on the supply-side and distributed energy resources seeking to enter markets on the demand side.
Issued in September 2020, Order 2222 calls for the removal of “barriers preventing distributed energy resources (DERs) from competing on a level playing field in the organized capacity, energy, and ancillary services markets run by regional grid operators.”
Order 2222, widely hailed as a landmark achievement in the history of the energy industry is about more than just creating more competitive markets. By allowing DERs, including demand response, their just seat in the marketplace, Order 2222 enables the US electric grid to take a giant leap toward a cleaner future.
Consider this recent data on demand response performance in the US:
In 2019, the most recent year for which the data is available, the combined wholesale demand response capacity of all regional system operators in the US grew to 27,000 MW.
How much environmental pollution did all that demand response save the country in 2019 by providing a resource that would have otherwise been supplied by a traditional “peaker” plant?
According to the EPA, the 27,000 MW of capacity from all commercial DR participation in the US in 2019 prevented the greenhouse gas emission equivalent of what an average passenger vehicle would produce were it to drive a little more than 142 million miles.
That same total of reduced load roughly converts to the carbon dioxide emission equivalent of 63 million pounds of coal being burned.
In 2020, CPower’s more than 1,700 customers contributed more than 4,000 MWs of capacity to demand response, effectively reducing the energy equivalent of 7 million pounds of coal that would otherwise have been burned and released into the environment.
Helping the grid stay balanced and keeping the air clean aren’t the only benefits to demand response.
The global demand response market is projected to value at USD $24.71 billion by 2022, an increase from the $5.7 billion valuation of the same market in 2014, according to a recent report published by Million Insights market research firm.
Much has been made in this publication and others in the energy industry about the evolving electric grid and demand response’s role in helping to bridge past, present, and future.
As you read these words, energy markets and electric utilities across America are refining their demand response programs and introducing new ones, providing organizations with a lucrative and socially responsible way to use their energy assets to support grid reliability in this critical time of transition.
America opened the door for demand response nearly forty years ago. Closing it now (even just a little bit) would be a step toward the past in a time when the country should be crossing the bridge to energy’s future.
Power Shift: How DERs are Creating a New Balance of Power (Webinar)
What will electrical power consumption in North America look like in 2050? Will centralized power generation still dominate, or will distributed energy resources–DERs–shift the balance of power generation to the energy end consumer? Our presentation takes “a look back” from the future to show how expanding DER implementation is laying the groundwork for a new balance of power, freeing organizations to independently pursue sustainability and reliability goals, and how monetizing DER energy assets is accelerating that shift. Our case study reveals how one university monetizes solar, battery storage, and demand-side energy management strategies to power its future, today.
Learning Objectives:
- Examine How the “balance of power” will shift from generators and utilities to the end energy consumer over the next decade.
- Explore the ways in which flexible demand and aggregation at the consumer level will change the grid infrastructure.
- Investigate the impact that distributed energy resources (DER) and microgrids will have on the state of grid modernization.
- Identify additional renewable resources, beyond solar and wind, that will see the greatest increase in adoption for both supply and demand of electricity.
Watt’s Up With Backup Generators?
Simplifying back-up generation rules, permitting, and demand response participation.
Renewables are here and continue to displace traditional coal resources on the grid. Battery storage is compelling and becoming more cost-effective — but it is still not a full-proof, scalable solution. Utilities are battling the challenges of grid intermittency amidst infrastructure challenges to support renewable penetration. All of this to say, the tried-and-true back-up generator is still the go-to resource when it comes to energy resilience and still remains a misunderstood energy resource.
Join CPower’s back up generation and demand response experts Arusyak Ghukasyan and Michael Mindell for this 30-minute panel to learn and understand topics including:
- How generators can earn revenue for your organization
- The rules and policies for BUGs at the federal, state, and local level
- Common myths about using BUGs for ‘non-emergency’ situations like demand response and testing under load
- What industries, markets, and programs are more favorable to BUGs for revenue
- How to fund and finance generator upgrades or replacements
Case Study: UMass Amherst – A Revolutionary Approach to Sustainability Yields Revolutionary Results
State-of-the-art battery storage, an innovative solar PV system, and “stacked” demand management programs provide energy savings, steady revenue, reduced greenhouse gases, and grid reliability for
this revolutionary institution.