Costs to Automate Demand Response – Taxonomy and Results from Field Studies and Programs

During the past decade, the technology to automate demand response (DR) in buildings and industrial facilities has advanced significantly. Automation allows rapid, repeatable, reliable operation. This study focuses on costs for DR automation in commercial buildings with some discussion on residential buildings and industrial facilities. DR automation technology relies on numerous components, including communication systems, hardware and software gateways, standards-based messaging protocols, controls and integration platforms, and measurement and telemetry systems. This report compares cost data from several DR automation programs and pilot projects, evaluates trends in the cost per unit of DR and kilowatts (kW) available from automated systems, and applies a standard naming convention and classification or taxonomy for system elements.

Median costs for the 56 installed automated DR systems studied here are about $200/kW. The deviation around this median is large with costs in some cases being an order of magnitude great or less than the median. This wide range is a result of variations in system age, size of load reduction, sophistication, and type of equipment included in cost analysis.

The costs to automate fast DR systems for ancillary services are not fully analyzed in this report because additional research is needed to determine the total cost to install, operate, and maintain these systems. However, recent research suggests that they could be developed at costs similar to those of existing hot-summer DR automation systems. This report considers installation and configuration costs and does include the costs of owning and operating DR automation systems. Future analysis of the latter costs should include the costs to the building or facility manager costs as well as utility or third party program manager cost.