Shift in Peak Demand Months Has Implications for Utilities

Utilities.
Published On
May 3, 2021

According to a report from the American Council for an Energy-Efficient Economy (ACEEE), Washington, D.C., the growing shift toward electrically powered heating is set to raise wintertime energy demand.

In sum, the report predicts that more utilities around the nation will start to see electric demand peak during the winter months, rather than the traditional summer months’ demand peak, which has always been driven by increased use of air conditioners.

There are several factors driving the shift. One is that more customers are using solar, which is strongest in the summer and thus reduces demand for power from their utilities. On the other side, as electrification takes hold and the use of natural gas in homes and businesses decreases, more customers are installing electric heat pumps, electric space heaters and electric water heating (all of which have increased use in colder months) in place of gas-fired furnaces and heaters.

The report added that, even in areas of the country that are considered “summer-peaking” regions, surges in electric demand during extreme cold weather events, which are increasing in frequency, can contribute to fuel price spikes or outages, such as those that occurred in Texas in February 2021.

As a result of this trend, ACEEE is calling on state policymakers and regulators to set utility goals for reducing winter peak demand and consider demand-side solutions for meeting it. It recommends that utilities and other administrators of efficiency programs adapt existing programs to incorporate technologies and measures that reduce winter peak demand, as well as expand weatherization and home retrofit funding.

That is, while utilities could theoretically meet winter peaks and other cold-weather demand constraints by building more power plants, energy efficiency measures actually reduce winter demand. Building new plants would simply be designed to provide additional power for the growing demand. As such, energy-efficiency measures would be more cost effective.

Examples of energy-efficiency measures can include utility investments to weatherize homes and improve the efficiency of heating and optimize the timing of energy use. In specific, the report found that residential weatherization and the use of more efficient heat pump models are the most important measures, with relative importance varying based on the specific scenario. In addition to smart controls, the report recommends demand-response measures involving grid-interactive water heaters, managed electric vehicle charging and behind-the-meter battery systems. Its findings also suggest that limited fossil fuel backup in homes could further reduce the amount of electricity needed to deal with the most intense winter peak events.

In terms of specific savings potentials, the report noted that better-sealed homes, higher-performing heat pumps and grid-interactive measures such as water-heating systems that heat water at times of lower demand could reduce winter peak by up to 12%. Furthermore, adding a more aggressive set of measures such as deep retrofits, smarter commercial HVAC controls and energy information management systems would reduce peak demand during such a vortex by up to 34%. These reductions reflect changes to residential loads and key commercial loads, such as space heating, water heating, ventilation and lighting.

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