Enabling Industrial Demand Flexibility: Aligning Industrial Consumer and Grid Benefits

Grid decarbonization means adapting to a growing portfolio of renewable supply such as solar and wind, while also meeting growing electricity demand. As the balancing challenge becomes more complex, the industrial sector is a strong candidate for a new demand flexibility approach—one that goes beyond responding to discrete events or reducing energy demands at peak hours. Information and communication technology (ICT) enables the kind of bidirectional communication and control that can respond to complex grid and energy user needs; to date, however, little of this potential has been realized, particularly in the industrial sector.

This white paper identifies alignments between grid and industrial priorities going forward. We argue that utilities should aggressively prioritize the expansion of ICT-enabled demand flexibility from large industrial customers, especially as part of their long-range planning efforts. Doing so will ensure that price signals and program incentives lead to efficient industrial electrification, while also resulting in beneficial outcomes for the broader grid. 

We identify steps that utility program managers and administrators can take to balance energy supply and demand in a cost-effective way while enhancing grid decarbonization progress and benefitting industrial customers. We also highlight examples of current approaches to demand-side management (DSM) at electric utilities that integrate ICT-enabled solutions and support industrial customers.