Over the course of its two-plus decades in business, kW Engineering has been focused on a single mission: to improve the intelligence and sustainability of buildings in order to combat and reverse climate change. For the 50-plus engineers at the Oakland, California-based firm, that has meant occupying an independent spot between corporate clients eager to both slash energy bills and achieve increasingly ambitious sustainability goals and the utilities offering incentives and programs designed to tap buildings as a grid resource.

Plenty has changed in the 20 years kW Engineering has been operating; particularly in recent years as demand response has gained momentum and interest among both utilities and corporations. "Demand response has not been the biggest part of our business historically," said Jim Kelsey, the founder and CEO of kW Engineering. "But it's an area that we are really growing in."

A changing grid elevates the importance of demand response

There's good reason why interest in demand response is accelerating. A big factor is the overall shift in many regions of the country towards increased electrification, which is seen as an essential tool to achieve de-carbonization goals.

While there are many drivers of this transformation, public policy and corporate commitments are arguably the most important. In fact, over 300 global corporations have joined the RE100 initiative, which requires companies to meet a 100 percent renewable energy target, although many have gone further and pledged to achieve net zero carbon emissions. In addition, 18 states plus the District of Columbia and Puerto Rico all have some version of 100 percent clean energy mandates or goals.

Taken together, these and other factors are transforming the grid from one dominated by large central station power stations to a cleaner and more decentralized grid. For both utilities and their customers, this changed dynamic means that each individual customer has a potential role to play in maintaining a resilient and reliable grid by participating in demand response during times of peak demand.

Why commercial refrigeration is a critical resource

That's exactly the message that Kelsey delivers to customers thinking about participating in demand response programs, particularly those with large loads like commercial refrigeration. "The participation rewards for demand response are increasing and will only increase more because the need for resources to keep the grid resilient are getting higher and higher," said Kelsey. "As you see the grid greening and there's more reliance on renewables, the ability to fill the gaps when those resources disappear is just getting more and more valuable."

Commercial refrigeration is uniquely positioned to take advantage of the elevated role of demand response. Indeed, a few years ago researchers from the National Renewable Energy Laboratory (NREL) issued a report identifying supermarket refrigeration systems as a large and energy intense load that would be beneficial to leverage as part of utility demand response programs. In separate research conducted in the European Union (EU), a team of Swedish academics estimated that refrigeration represented about 50 percent of a supermarket's typical energy demand.

The importance of education

In her work implementing Pacific Gas and Electric Company's (PG&E) automated demand response (ADR) program, Christine Riker spends a lot of her time educating the owners of commercial refrigeration systems about the benefits of participating in demand response. In the past, supermarkets and other commercial refrigeration owners have participated in demand response programs with their HVAC and lighting loads – although some have opted to move away from lighting because dimmed lights can make it look like a store is closed.

There's another understandable concern around potentially negative impacts on products that need to stay refrigerated. "There are still some concerns on the customer side about not wanting to risk, in any way, the product being refrigerated," said Riker, who is the director of the Distributed Energy Resources Department at Energy Solutions, a clean energy consulting company. "The other hurdle that happens with refrigeration is sometimes the site has older controls and there's a high cost to upgrade the existing controls to make it possible to participate in demand response."

Advances in technology accelerate demand response potential

Fortunately, the combination of technology advances and incentives from utilities are making it easier for commercial refrigeration owners to take advantage of the financial rewards of demand response. In California, for example, the state's investor owned utilities offer incentives both to upgrade controls systems as well as to participate in demand response events.

"The three California IOUs (investor-owned utilities) and SMUD (Sacramento Municipal Utility District) have an auto DR program that provides incentives to offset some of the upfront cost of controls," said Riker. "That's because there is value in helping a customer with the first costs of automation so they can be successful participating in demand response moving forward."

Advances in controls systems also mean that supermarkets and other commercial refrigeration owners don't have to worry about risking their products. "Back in the day, we'd see refrigeration controls basically running the compressors and condensers to meet a given temperature set point," said Kelsey. "Now we've got greater resolution and control down to the case temperatures and greater connectivity going in the other direction back up to the grid. That improved communication makes it so that you can do demand response easier."

Seeing a building as an asset

The improved and connected control systems available today are part of a larger trend that allow refrigeration owners to think about their buildings in entirely new ways. "It helps get into the mindset of how flexible these buildings can be and how businesses with low margins, like supermarkets, can do things that help earn more revenue," said James Jackson, business development manager for Emerson Commercial & Residential Solutions. "Today, there are controls and software solutions that help visualize your energy spend and identify any potential issues with your building. But they also give you the flexibility to participate in demand response and rate arbitrage as well."

The goal is straightforward: to help customers navigate how to fully leverage their buildings and refrigeration systems to simultaneously reduce their energy budget, take advantage of revenue opportunities, and to support their core business. 

"It's about looking at their buildings as assets rather than liabilities or infrastructure," said Corey Wheat, business development manager with Emerson, whose area of focus is helping to integrate cold chain solutions with utilities and their customers. "We always start with energy efficiency. But we see our role as providing the expertise and the products to help companies develop their control strategy to reduce load and optimize energy consumption while protecting food safety and quality. You have to have a lot of foresight and controls expertise but those are the things Emerson can help close the gap with."