A Guide for Hotels: Boosting Profits with Energy Efficiency & Conservation
Demand Response
Demand response programs are a tool for cutting power use at "peak" times - times of greatest demand and highest risk for blackouts and other service disruptions, typically between noon and 7 p.m. Administered by local utilities or third-parties, these conservation programs notify participating businesses when to use less electricity to prevent shortages or high spot market prices. Some demand response programs provide financial incentives or other benefits to customers who agree to reduce peak consumption or shift electricity use to off-peak hours.
The California Independent System Operator (ISO) triggers demand response programs when operating reserves are expected to drop below 7%, meaning that blackouts are more likely to occur. Low operating reserves occur because of high peak demand, unplanned generation outages, transmission problems or adverse weather. If reserves drop, California ISO will notify program administrators, who then alert program participants.
The two basic types of demand response programs are reliability and pricing. Reliability programs are triggered the day of an electrical event to prevent or offset an impending emergency. Some are voluntary programs, meaning that a business does not face a penalty when unable to reduce its load. Other reliability programs are binding and invoke penalties for non-action. However, these programs are designed so that penalties are wholly or partially offset by financial incentives, such as lower overall rates.
Pricing programs are tied, in theory, to the spot market price of electricity. On critical days, pricing programs invoke higher rates for electricity used during peak hours. These higher rates are only put into effect for a maximum of 12 days a year.
Hotels interested in demand response programs should contact their local utilities to ask for no-obligation demand response audits. Similar to an energy audit, a demand response audit examines building equipment systems and operations to determine what opportunities exist for load curtailment. Your utility representative can then help you choose among the many programs available, matching your building's profile to the best-suited incentive packages. Hotels can also take advantage of the Flex Alert Network to reduce energy use at peak times.
Demand Response Tips for Hotel Operators
Hotel operators must be creative in finding ways to participate in demand response programs without affecting the experience of their guests. Hotels must capitalize on their ability to conserve power behind the scenes, while maintaining normal operations.
- Shut off unnecessary lights and equipment in offices, maintenance areas and other behind-the-scenes areas.
- Operate laundry services during off-peak times, such as the early morning.
- Schedule equipment - such as pool pumps - to run at off-peak times.
- Adjust cooling set points up where possible.
- Experiment with adjusting temperatures in areas such as lobbies and conference facilities to cut power and maintain comfort.
- Review building operations to develop demand response strategies and processes ahead of time.
Leading by Example: Wyndham Palm Springs Hotel
The Wyndham Palm Springs Hotel won a 5th annual Flex Your Power Award for its demand response programs. The resort completely redesigned its energy management policies to focus on conservation and demand response. The hotel operators accomplished extensive load shifting by rescheduling laundry and maintenance to off-peak times. They were also able to shed peak loads through HVAC management and continuous monitoring of unoccupied guest rooms, ensuring minimal waste of energy. These actions allowed the hotel to achieve a highest peak savings of 428 kW, or 44.9% of peak load. Overall, efficiency programs that saved 871,752 kWh per year.