Meeting Louisiana’s Rising Industrial Energy Demands through Demand Response
"As Louisiana's largest industries grow, so do their energy needs, and Louisiana needs to find ways to make that energy as affordable and reliable as possible," said Tarufelli. "Ultimately, expensive or disrupted energy could mean losing major economic opportunities to other states."
In "Foundations for an Intelligent Energy Future: Demand Response Potential in Louisiana," Tarufelli's analysis focuses on how Louisiana can best apply demand response, a method for electricity utilities to communicate with and incentivize industrial customers to shift peak energy consumption away from utilities' peak demand periods. The paper highlights numerous benefits Louisiana can reap by increasing participation in demand response programs. These include minimizing spikes in energy demand and corresponding prices, reducing the risk of blackouts and energy transmission congestion; and enabling utilities to leverage current energy production facilities rather than build new power plants.
"Effective demand response programs can lower electricity prices, system costs, and run the electricity grid more reliably in transmission-constrained regions," said Tarufelli. "They can be a major tool to keep Louisiana's economy competitive in the long haul."
According to Tarufelli, Louisiana is uniquely poised to increase demand response participation among its industrial customers. Driven by energy-intensive chemical, petroleum, and natural gas industries, Louisiana is a top state in terms of total per-capita energy consumption. In addition, the state's energy-intensive industrial sector is forecast to grow over the next three years, with 125 projects across 12 industries, valued at $32 billion.
The paper highlights that the state could easily offer its largest energy users access to a variety of utility- or market-administered, incentive-based and price-based demand response programs; however, several barriers currently prevent Louisiana from achieving the benefits of demand response. The paper presents recommendations based on best practices that can be utilized by stakeholders, including the Louisiana Public Service Commission, to remove barriers to participation and design compensation mechanisms that would allow for increased participation in demand response programs.
Contact Marybeth Pinsonneault
Center for Energy Studies
LSU Media Relations
Provided by Louisiana State University