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Demand Response and Smart-grid Technologies in Supermarkets

Intelligent refrigeration system managers turn equipment into assets

Supermarkets typically operate with razor-thin margins, which means fresh ideas that improve profits, such as participating in utility demand response or peak-shaving programs or selling thermal energy to local district heating and cooling grids to produce a revenue stream, are always welcome. Today, the technology that enables supermarkets to implement these ideas is available in the form of intelligent refrigeration system managers that can turn energy-using equipment into revenue-producing assets and, in turn, create greener stores that customers value.


Over the years, many utilities have incentivized commercial, industrial, and even residential customers to participate in demand response or load-shedding programs designed to cut electric consumption during peak times of the day when electricity is in high demand.

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There is no one-size-fits-all program. The particular design of each program is shaped by each utility’s demand-side management strategy. These strategies are influenced by many factors, which include the transmission system and operator, the state regulatory body, the individual utilities and their generation dispatch protocol, the demography of the customer base (residential, commercial, or industrial), and the technology used to trigger a response.

Depending on the program, customers are encouraged to shift electric usage from high-priced on-peak hours to lower-priced off-peak hours or simply reduce usage during peak periods.

Rewarding customers who can cut electricity consumption immediately when there are balancing problems in the grid is smart business for utilities. When electricity demand is at its peak, utilities either have to buy power from other utilities or fire up their least-efficient energy-generating equipment. By avoiding these costly alternatives, the utility and customer saves money.

As the name implies, in an industrial demand response program, the utility sends a signal to a central control unit that utilizes the flexibility of the application to reduce the power consumption of motors, compressors, and other electrical equipment. The signal triggers a reduction in electric consumption for brief periods ranging from less than one minute to long periods within a 24-hour interval, depending on the application.

Not every utility offers a demand response program. Those who do see it as an answer to the question: “Is the demand response program economically advantageous versus the alternative of dispatching the next level of generation of technology or building new generation capacity?”

The analysis and variables used to answer this question are far from simple and, again, vary based on utility and jurisdiction. Nevertheless, demand response, along with effective energy-efficiency programs, are essential keys in planning long-term generation and transmission needs.

Ultimately, the utilities engaged in these programs pass on the prospective savings through a demand response program. These programs provide incentives to customers who agree to respond to a load-shedding event by reducing their electricity consumption when requested by the utility, typically during peak periods. The programs are typically structured to provide economic benefits in return for a commitment to respond from customers. Benefits can be realized even if a demand response event does not happen.

Demand response programs are mainly utilized by industrial, residential, and large commercial customers. While a proven solution, demand response programs are not frequently utilized by supermarkets in the U.S.

Nevertheless, the high usage of electricity by supermarkets can make it very advantageous to participate in these programs. According to the U.S. Department of Energy’s (DOE’s) Energy Star program, the average supermarket uses 50 kilowatt-hours (kWh) of electricity and 50 cubic feet of natural gas per square foot per year. That translates to an average energy cost of $4 per square foot with up to 60 percent spent on refrigeration.

A carefully considered demand response program with the appropriate control systems can achieve substantial energy savings while protecting food integrity by optimizing refrigeration system management.

Several supermarkets in the U.S. have participated in demand response programs. And, in Europe, demand response pilot programs are being conducted and closely studied.

Participating in demand response programs requires that the store has the flexibility to either curtail its power demand or shift the time of electric consumption (see Figure 1 on Page 22).

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