Key Takeaways: Navigating uncertainty: how demand response helps manufacturers offset potential tariff impacts

Executive Summary 

This exclusive webinar, Navigating Uncertainty: How Demand Response Helps Manufacturers Offset Potential Tariff Impacts, addressed the critical issue of rising operational costs faced by manufacturers. Moderated by Tyan Harer from Enel North America, the session featured insights from Paul Cicio (President of Industrial Energy Consumers of America), Jennifer Taylor (Head of Compliance, Demand Response, at Enel North America), and Mike Williams (Account Manager at Enel North America).  

 

Manufacturers are no stranger to global pressures – and recent turmoil in trade policy has only intensified these challenges. This webinar showcased how participating in demand response programs can help manufacturers manage energy use more strategically – lowering costs, unlocking new revenue streams, and offering a powerful tool to counter rising operational expenses. Participation involves leveraging existing assets in a strategic manner to temporarily reduce or shift energy usage when the electric grid faces supply challenges. The speakers emphasized the importance of choosing a reliable demand response partner like Enel, who offers tailored and realistic energy reduction strategies, stability, program transparency, and support every step of the way. The webinar concluded with a Q&A session. 

 

Speakers 

  • · Paul Cicio, President, Industrial Energy Consumers of America (IECA) 

  • · Mike Williams, Account Manager, Enel North America 

  • · Jennifer L. Taylor, Esq., Head of Compliance, Demand Response, Enel North America 

 

Key Takeaways 

  1. 1. Strategic Cost Reduction: Demand response programs offer manufacturers a strategic way to reduce operational costs and generate new revenue streams by temporarily reducing or shifting energy usage when the electric grid faces supply challenges. 

  1. 2. Equipment Protection Insights: Participating in demand response can help manufacturers protect sensitive equipment from sudden grid interruptions, gain insights into energy usage, and optimize operations to avoid peak electricity prices. 

  1. 3. Customized Reduction Plans: Customized energy reduction plans tailored to specific industry needs and facility operations are crucial for successful participation in demand response programs. 

  1. 4. Stability, Reliability, and Long-Term Value: Enel provides comprehensive support, transparency, expertise in more than 15 energy markets, and more than two decades of experience to ensure manufacturers can confidently participate in demand response programs and achieve long-term stability and predictable payments. 

  1. 5. Resilient, Competitive Strategies: Manufacturers can leverage existing assets and flexible energy strategies to build resilience against market volatility and regulatory unpredictability, enhancing competitiveness without compromising uptime. 

 

Key Quote 

Manufacturers can build immediate resilience against sudden policy shifts and regulatory unpredictability by homing in on stable, controllable ways to reduce pressure on their margins. One such strategy is being flexible with energy consumption. 

 

Webinar 

Watch Full Webinar here.  

Strategies for Manufacturers to Navigate Market Volatility Through Demand Response Programs

Manufacturers today face significant challenges, including rising operational costs and global market instability. To remain competitive and profitable, they must find innovative ways to navigate this volatility. Demand response programs present a viable solution, allowing manufacturers to flexibly manage energy consumption, cut costs, and create new revenue opportunities. By adjusting energy usage during peak periods, these programs not only alleviate strain on the grid but also provide financial incentives. This blog will delve into how demand response can transform manufacturing operations, driving efficiency and resilience in an unpredictable market.

Navigating Market Volatility with Demand Response Programs

Manufacturers regularly face volatility in the market, including supply chain disruptions, material shortages, and geopolitical tensions, all of which can affect operating margins. The recent implementation of tariffs has intensified these issues, raising the cost of importing essential components and increasing overall expenses. The uncertainty surrounding tariffs on electricity imports further threatens potential energy cost hikes. To navigate this challenging environment, manufacturers need to be agile and adaptable, reassessing procurement strategies, project timelines, and operational processes to mitigate cost impacts and maintain resilience.

Energy flexibility through demand response programs is a viable strategy for operational agility. Demand response enables manufacturers to temporarily reduce or shift energy usage during peak grid demand periods, stabilizing the grid and offering financial incentives. By optimizing existing assets and adjusting energy consumption, manufacturers can generate new revenue streams and lower operational costs without sacrificing productivity. Demand response provides a quick, effective solution in a volatile market.

Beyond financial benefits, demand response programs offer deeper insights into energy usage, helping manufacturers identify efficiencies and achieve further cost savings. Advanced notifications of grid issues protect sensitive equipment from disruptions, preventing damage and downtime. Understanding electricity price peaks allows manufacturers to schedule operations during more economical periods, further reducing energy expenses. These advantages make demand response a strategic tool for enhancing operational resilience and competitiveness.

Successful demand response implementation requires careful planning and customization to meet facility-specific needs. Manufacturers can select from various curtailment methods, such as manual shutdowns or automated systems, to comply with program requirements while maintaining core operations. For example, a metals manufacturing facility might shut down specific equipment and auxiliary systems to reduce load, while a food manufacturer might adjust production schedules or use backup generation. Developing a realistic plan that aligns with the facility's operational dynamics is essential. Partnering with an experienced demand response provider ensures the strategy is tailored for success.

In the HVAC sector, companies are adopting measures like increasing set points by 5° to reduce energy consumption, a straightforward yet effective tactic. They also avoid turning on non-essential equipment during dispatch periods, optimizing energy usage during peak times.

Plastics manufacturers take more drastic action by shutting down all non-essential equipment, including molding machines, pumps, heat and control power, thermalators, towers, chillers, conveyors, air compressors, and dryers. Office equipment is also turned off except for the main server. This thorough shutdown approach maximizes energy savings and financial incentives during demand response events.

Food manufacturers follow systematic shutdown procedures for high-load equipment such as grinding, batching, pelleting, coolers, fans, and grain dryers, leading to significant energy savings. They also turn off truck garage breakers in the lower main control room, ensuring effective participation in demand response programs while maintaining efficiency.

Chemical manufacturing plants, due to specific needs and safety precautions, identify production and conveyor lines to shut down during dispatch periods. They limit compressed air usage, evaluate motor loads, and adjust overhead lighting and refrigeration settings. These measures enable safe and effective participation in demand response programs.

Wood manufacturing plants, especially milling operations, reduce demand by 20 to 35% rather than complete shutdowns, focusing on work centers, HVAC systems, and air compressors. Seasonal adjustments to HVAC set points and shutting down non-critical lighting and environmental testing chambers allow participation in demand response programs while maintaining essential operations.

Demand response offers manufacturers a proactive approach to managing risk, reducing operational expenses, and protecting margins in an uncertain business environment. By transforming energy consumption into a strategic asset, manufacturers can unlock new revenue streams and enhance operational resilience. As global trade dynamics shift and market volatility intensifies, demand response provides a stable method for manufacturers to navigate uncertainty and thrive. Embracing energy flexibility through these programs is a pathway to long-term success and competitiveness in the manufacturing sector.

Additionally, demand response programs serve as a powerful tool for businesses across various industries to optimize energy usage, reduce costs, and contribute to grid stability. Success in these programs hinges on adopting customized, realistic energy reduction plans and partnering with providers who offer long-term value and support. With the right strategies and partnerships, businesses can navigate the complexities of demand response programs and achieve significant financial and operational benefits.