Energy is a top three operating expense for many organizations and a top five operating expense for most [1]. Yet despite numerous opportunities to manage their energy spend, most organizations treat energy as a fixed cost, writing checks to their utility companies as their bills roll in each month. EnerNOC, for years a leader in demand response, has recently turned its attention to shifting the energy management paradigm by enabling organizations to use software to make real time decisions about how and when they use energy.<\/p>\n
An Evolving Business Model<\/strong><\/p>\n When EnerNOC was founded in 2001, it primarily created value for customers by facilitating access to grid operator demand response (DR) programs. At a high level, grid operators are charged with providing consumers with reliable access to electricity by balancing electric supply and demand. During times of peak demand (e.g. on a hot July afternoon when A.C. units are running full blast), grid operators must manage this balance either by increasing supply, often by running expensive peaking power plants, or by paying customers to reduce energy usage via DR. EnerNOC enrolls customers in these programs and provides technology to facilitate participation; as a result it captures value by retaining a portion of the significant grid operator payments. Still confused? Here\u2019s the DR 101:<\/p>\n <\/p>\n