Last summer, Behavioral Demand Response (BDR) helped utilities cut peak electric demand by up to 5 percent. That created a lot of buzz not only among utilities, but also among consumers who were energized about their role in keeping peaker power plants offline.
The across-the-board enthusiasm sparked several great questions in our recent webinar discussion about BDR, which featured commentary from a range of industry innovators. Today's growing interest in BDR is reflective of how the technology is proving to be a game-changer for utility demand response efforts — especially in states with significant peak reduction potential, like California and Texas.
At one-third the cost of traditional DR options, it’s one of the most cost-effective solutions available to utilities and among the most empowering for their customers. So, let’s take a deeper dive into this technology: how it drives peak savings, how it stacks up against run-of-the-mill DR programs, and how utilities and their customers are responding to the program.
Here are the top five questions we’ve been asked about Behavioral Demand Response.
1. How does Behavioral Demand Response achieve peak savings?
BDR is a software-driven approach to demand response. It leverages customers’ smart meter data in real time to deliver personalized energy insights and advice that help them cut peak demand. What makes BDR so scalable — it can engage millions of households at once — is that it’s built directly on top of Opower’s unified technology architecture, which combines data management, analytics, and behavioral science to achieve maximum impact. One of BDR’s key differentiators is its flexibility in achieving a peak reduction goal. It gives customers the freedom to choose how they save energy during peak events — whether it’s adjusting the thermostat a few degrees, turning off major appliances, or going out for dinner instead of running the oven or dishwasher. And because 100 percent of customers are engaged at once, these peak savings are consistent, predictable, and reliable across geographic regions.
2. How does BDR stack up against traditional DR programs?
At one-third the cost of traditional DR programs and having the ability to reach 100 percent of customers, BDR is much more cost-effective than traditional forms of DR, such as direct load control (e.g. utilities cycling down customers’ air-conditioners at agreed-upon intervals) or generation alternatives (e.g. peaker power plants). Peaker plants generally cost $94/kW-yr to generate additional electricity, while implementing air conditioner control switches runs about $79/kW-yr.
Since BDR takes a much more proactive approach by generating timely, personalized information and insights — and requires no price incentives or costly in-home devices — it’s able to provide a highly affordable solution.
3. How does BDR interact with energy efficiency programs?
BDR plays nicely with energy efficiency programs. Indeed, they can mutually reinforce each other to boost results across the board. For example, at one West Coast utility — where Home Energy Reports were already being delivered to customers — BDR communications had an additive effect on household energy efficiency savings. In other words, customers participating in both the BDR and Home Energy Reports programs attained peak reduction savings and higher energy efficiency savings.
4. Do customers like BDR?
Utilities have often wondered how customers would respond to an information-based demand response program that didn't offer customers a financial incentive. After all, wouldn't customers be unhappy if there wasn’t a financial reward for helping cut peak demand? It turns out that the opposite is true. Because BDR drives concrete savings and positive engagement with consumers, it's been extremely well received. In fact, with an average 78 percent customer satisfaction rate — and even up to 85 percent at one utility — BDR earns a higher customer likability rating than going to the beach (around 65 percent likability in the general population) or even eating ice cream (75 percent)!
5. Which customers are most satisfied with BDR?
While all customers indicate high levels of satisfaction with BDR, those whose electricity use peaks in the late afternoon are the most satisfied with the program: our research shows that they are 17 percent more likely than non-BDR participants to say that their utility "helps them manage their monthly usage." An important takeaway for utilities is that the most engaged BDR customers are also the ones who have the greatest potential to reduce peak demand and costs for utilities. Furthermore, these customers represent an opportunity for utilities to increase participation in more traditional DR efforts, such as A/C cycling. BDR is a powerful step for utilities in creating a smarter and more robust demand response portfolio — one that includes both information-based programs and traditional devices.