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Industry 101: Resource Adequacy & You

July 19, 2022

We are entering the full swing of summer, so we all will turn to cooling methods such as box fans or air conditioning. Surely you can imagine the energy it takes to cool off a whole house, but what about an entire city? What about industrial facilities? How do we keep up with the demand for all that energy? Enter: Resource Adequacy.

Commonly referred to as “RA” in the energy industry, this is a regulatory construct developed to ensure that there will be enough resources available (supply) to serve electric needs (demand). It’s a series of checks and balances that maintains regular electric generation to meet the demand of a sector while also leaving room for situations in which reserves are necessary. It’s like making sure there is enough money in your bank account to pay your basic bills and also plan for unforeseen circumstances such as taking your car to the shop or replacing a household appliance. RA is key to ensuring that power shortages and blackouts do not happen when extreme circumstances arise, which could be anything from heat waves to hurricanes.

So, what happens when demand for energy rises beyond what is expected? Part of examining resource adequacy also involves pivoting when demand is high. For example, suppose the demand for electricity turns out to be significantly higher than forecasted, especially during extreme region-wide heat waves. In that case, there can be periods when there will not be enough resources to meet demand. Independent System Operators (ISO) will issue alerts during projected tight energy supplies to obtain additional capacity or reduce energy use to relieve stress on the power grid. States have regulations and requirements of suppliers—investor owned-utilities, community choice aggregators, direct access providers, and energy service providers—to have enough contracted capacity to meet the system, local, and flexible resource adequacy requirements – That’s right! There are systems in place to import resources. Referring to the bank analogy, think of it as a loan. It’s certainly not ideal, but it’s helpful in a pinch.

Naturally, resource planning around the trends in demand requires heavy data collection, ranging from a sector’s average daily use to annual use. At Energy Sciences, we begin our collection by doing different types of assessments. Data collection considers criteria such as: are there busier times of day when more energy is consumed? How many people work in each facility? How many hours are occupied versus unoccupied? The process entails looking critically at what resources are used within each building, including details such as the types of lightbulbs. The more energy-saving devices within a building, the more wiggle room there is in the Resource Adequacy process. For instance, different types of appliances and utilities make a huge difference.

At Energy Sciences, we help with Resource Adequacy regularly. The ES team partners with utilities on programs, such as the DTE Retro-Commissioning Program, to focus on operational improvements for existing systems for facilities. Our team also works closely with DTE on the Do-It-Yourself Energy Savings for Business (DIY) Program, offering quick and easy projects to enhance energy-efficient business operations and improve work environments. Our work within these programs creates some demand reduction that impacts RA favorably when facilities run their complete analysis.

So, the next time you think about electricity use in your workplace or facility, remember that even a small decision plays a part in how your community, and city, make decisions about electric resources.

If you are interested in energy solutions for your business, let’s chat!

Categories: Blog, Industry Insights, Sustainability