Strategies for C&I Demand Response: Warehouses


Warehouses can participate in demand-response (DR) programs without adversely affecting their services or internal operations and can often benefit financially. Opportunities to earn incentives by shifting some processes—like refrigeration or forklift charging—off peak or cutting back unnecessary loads can be attractive to warehouse operators. As warehouses have become more service-oriented, their energy consumption has increased and energy costs now often exceed 10 percent of total revenue. Depending on the size and type of operations, warehouses can reduce their peak loads by 3 percent using lighting strategies only and up to about 30 percent using comprehensive HVAC, refrigeration, lighting, and plug load strategies during DR events.

Occupancy Patterns and Peak Coincidence

Overall, warehouses have low levels of human occupancy compared to other commercial and industrial (C&I) facilities. Although the operations of most warehouses are similar, their activity schedules vary widely. Some are active 24 hours per day while others maintain conventional business hours. On summer afternoons, outdoor temperatures may drive a facility’s peak cooling demand around the same time that warehouse operations and utility demand both peak.

Key Energy Uses and Equipment

Industrywide, about half the total energy used in warehouses comes from electricity, with lighting and HVAC typically being the most energy-intensive systems. (Natural gas consumption—mostly for space heating and water heating—comprises the other half.) In cold-storage warehouses, refrigeration units often consume the most electricity. Warehouses that use forklifts find that ventilation systems are another large end use. A building automation system is generally not installed in a warehouse.

A bus-storage facility achieved a noticeable load reduction through participation in a DR program (Figure 1). During the DR event, lights and fans were turned off to reduce demand.

FIGURE 1: Demand curtailment in a warehouse
From noon to 6:00 p.m., a 175,000-square-foot bus-storage facility curtailed 54 400-watt metal halide light fixtures and 18 fans, reducing lighting demand by 23.5 kilowatts (kW) and fan demand by 128 kW.
Performance Requirements and Flexibility

Because warehouses are used for the storage of goods, indoor comfort is generally not of primary importance. This typically allows these buildings to be more flexible in participating in DR events. However, where heat-sensitive materials or perishable food products are stored, extra care must be taken to ensure that the integrity of these goods is not sacrificed. Some warehouses also provide logistics services such as materials pickup, computerized inventory control, and materials tracking, which may be able to be included in DR.

Typical Demand-Response Strategies

Warehouses can successfully participate in load reduction events using several proven strategies.

Precooling. Refrigerated warehouses can reduce peak demands by precooling to a lower temperature prior to the DR event then allowing the temperature to rise naturally. For example, a fish-processing and warehouse facility might lower its temperature from 40° to 33° Fahrenheit in the morning and then turn off refrigeration during the afternoon curtailment. The temperature will rise a few degrees and must be monitored to ensure that the quality of the products is not compromised. This facility could also keep fish on ice until after the curtailment period to reduce demand on the refrigeration system. Similarly, a beverage warehouse could precool the morning of a DR event and allow the temperature to drift up to its normal setpoint. The cool beverages help serve as thermal mass to keep the space cool until refrigeration can be restarted.

Shutting off refrigeration. Understandably, this strategy is likely to encounter initial resistance from operators. However, in some situations refrigeration fans, pumps, and compressors can be completely shut down, without precooling the space, for several hours—typically the longest DR event—without damaging products. Thermal insulation in walls, ceilings, and floors prevents thawing or temperature creep. Monitoring equipment is required to ensure that temperatures remain below regulation levels and warehouse operators must be prepared to end curtailment if temperatures rise too rapidly.

Shifting processes off peak. If notice of a DR event is given in advance, some warehouse operations can be performed before the curtailment or delayed until after the peak. For example, electric forklift charging should be regularly scheduled for off-peak hours, but a facility that has not made a permanent change can incorporate this strategy into its DR program.

Curtailing lighting. Warehouses usually have many large high-intensity discharge light fixtures that can be manually dimmed or turned off in unoccupied areas or areas in which full lighting capacity is not needed during a DR event.

Case Study

A cold-storage warehouse located in a warm, dry climate has 150,000 square feet of refrigerated storage and a peak electricity load of about 2,100 kilowatts (kW). Perishable products must be chilled immediately upon delivery by boat or truck. The warehouse’s load peaks between noon and 4:00 p.m. (also the utility peak) because that’s when shipments arrive at the facility. Despite these challenges, the warehouse is able to shed load during DR events by precooling: setting freezer temperatures lower prior to the peak period, shutting evaporator fans off, and then allowing temperatures to drift upward.

This warehouse is enrolled in a demand bidding program, in which the general manager and chief engineer receive notification the day before a DR event. They estimate activity for the following day and bid the amount of load they will be able to shed. This information is communicated to building operators, who precool refrigerators and then manually switch off pumps, compressors, and other equipment that isn’t critical to maintaining quality of service or product integrity.

For this warehouse, the motivation behind participating in the DR program is financial. The facility’s owner saves up to $4,000 per year (about 200 kW of demand) and finds that shutting off equipment wherever possible is not a great deal of work for his staff. The cost of diverted manpower and other inconveniences are minimal compared to the financial savings and increased reliability of the electric grid. Overall, there have been no adverse effects upon customer service or employee productivity.


2008 Title 24 Non Residential CASE Proposal: Demand Response Controls for Indoor Lighting (PDF), Pacific Gas and Electric (2006)

Demand Response Sample Audit (PDF), National Grid (2004)

Content last reviewed: