Last updated June 23, 2023
We often think of energy conservation as a way for homes and businesses to address environmental and budget concerns. While that’s true, its impact reaches much further. Conservation protects the electric grid and in doing so benefits us all.
Why is it important to use less energy?
Consider what can happen to the electric grid on a hot summer day when we’re all running our air conditioners. This is when the grid is most vulnerable to mishap, particularly if demand for energy usage becomes so great, that it threatens to exceed supply. Prices rise. Power plants and other grid infrastructure may falter under stress. If the grid becomes imbalanced, frequency levels drop, and power outages ensue.
It’s a fate that grid operators work assiduously to avoid because in a society so deeply dependent on electricity, power outages are more than an inconvenience. They can threaten health and safety and cripple an economy.
Understanding energy conservation
In expanding energy production to keep up with demand, there are physical, geographical, and economic limits to how much can be produced. Conservation serves as an important tool to avoid loss of grid power under extreme conditions. So, the Electric Reliability Council of Texas (ERCOT), the grid operator for most of Texas, has set up a series of steps to ensure grid reliability. They begin with conservation alerts, where ERCOT notifies energy consumers about the need to reduce their energy use.
Employing conservation is particularly important at this point in history because grid dynamics are changing. More of ERCOT’s power is coming from renewable energy. That’s a good thing. But it also means more intermittency — the sudden starting and stopping of power flow from solar and wind facilities based on the weather. This can lead to price spikes and electric supply disruptions caused by a phenomenon known as peak net load. While in the years ahead this problem will likely right itself, particularly as more energy storage and other stabilizing resources are added to the grid, for now, it’s one more reason conservation is important.
Another historical trend, too, underscores the need for businesses to help preserve the health of the grid. Texas’ population is growing, which has led ERCOT to forecast unprecedented demand for electricity this summer, even more so than last summer, which was also a record breaker.
We don’t know for sure how these trends will come to bear this summer. But, if ERCOT needs businesses to cut back on energy use, it’s good to be prepared with a plan.
So, what can your business do to reduce carbon emissions?
First, keep an eye on the news for alerts issued by the grid operator. ERCOT has set up a series of communications that can help you judge what steps to take next.
Conservation Alerts: ERCOT sends out a public notice calling for voluntary conservation, such as reducing lighting or shutting down non-essential production. On hot summer days, the best time to conserve is usually 2 and 7 p.m. when demand on the grid peaks.
Emergency Alerts: Separate from the Conservation Alerts, these are a series of steps that ERCOT takes when grid reserves fall too low. These steps may be accompanied by a Conservation Alert. But they seek to boost supply and reduce demand in other ways too. There are three stages, each prompting specific actions, depending on the level of threat to the grid.
- EEA Level 1: All available power supplies are called upon because operating reserves fell below 2,300 MW
- EEA Level 2: ERCOT can reduce demand on the system by interrupting power from large industrial customers who have contractually agreed to do so during an emergency. The grid operator also may call upon demand response resources that have been procured to address tight operating conditions. Level 2 occurs when operating reserves are less than 1,750 MW and are not expected to recover within 30 minutes
- EEA Level 3: ERCOT orders transmission companies to institute rotating outages because operating reserves dropped below 1,000 MW and are not expected to recover within 30 minutes
Needless to say, we all want to avoid Level 3 — planned outages — or worse, uncontrolled outages that can occur if none of these steps work. Voluntary conservation is the key to avoiding an emergency situation in the first place.
Remember, if you choose to conserve, your actions will not only help the grid but also can save your business money, whether through energy efficiency, demand response or use of on-site generators.
Start exploring renewable energy sources for your business
Now is a good time to begin exploring ways you can conserve energy while keeping your electricity bills under control. Remember, the less energy you use, the less energy you pay for, and your efforts may even net revenue via incentives offered by utilities or demand response payments. Some companies participate in demand response by reducing energy use; others use power from their on-site generators rather than the grid. Having on-site generators offers the added bonus of providing your business with backup power should a power outage occur.
But all of these efforts are ultimately about much more than individual gain. We all want to do what’s right for society. Your conservation efforts help everyone, not only by preserving the reliable function of the grid but also by tempering electricity prices. When wholesale market prices skyrocket, as they did last summer reaching a cap of $9,000/MWh, it’s not only those buying on the spot market that feel the influence. High costs eventually flow through to those on fixed rates as well.
We’re all in this together, and we’re happy to assist you in getting ready with a plan. We have teams that can help, whether you choose to pursue conservation, demand response, on-site generation, or a smart strategy that coordinates and leverages all three. Contact us — we look forward to the opportunity to join you in creating a stronger electric grid for everyone.
