Podcast Summary: "The New Wave of DERs"

Catalyst with Shayle Kann | Latitude Media | October 2, 2025

Episode Overview

In this episode, Shayle Kann speaks with Dana Guernsey, CEO and co-founder of Voltus and a veteran of the demand response industry, about the evolution and current landscape of distributed energy resources (DERs) — with a focus on demand response (DR) and virtual power plants (VPPs). The conversation traces the journey from manual, emergency-only demand response to today's automated, ever-present resource, addresses the drivers of recent growth, discusses geographic and regulatory nuances, and dives into the mechanics and promise of Voltus's new "bring your own capacity" model — especially as it relates to large customers like data centers.

Key Discussion Points & Insights

The Arc of Demand Response

• Origins:

  • Demand response began as a blunt, "emergency only" instrument — utilities would call factories during a grid crisis and request they curtail usage.
  • “Imagine making manual phone calls to very large industrials and then they would curtail their energy use, typically during a crisis.” (Dana Guernsey, 05:20)

• First Major Shift:

  • The rise of aggregators (e.g., Enernoc, Demand Response 1.0/2.0) allowed for pooling resources and responding more dynamically.
  • Technology platforms enabled more automation and broader participation.

• Today’s Landscape:

  • Demand response has moved from rare, crisis-based interventions to a frequent, even routine, grid asset.
  • “It's gone from this really kind of only extraordinary moment when the resource is used to being super ordinary. In fact, quite dull sometimes if you think about it that way. I don't even know why you're having me on this pod if that's the case.” (Dana, 05:57 and 08:10)
  • Voltus, for example, is now dispatched every day, across a wide range of use cases.

How Demand Response Has Broadened

• More Assets, More Automation:

  • Devices as small as a home EV charger or smart thermostat, up to steel mills and AI data centers, are now part of demand response portfolios.
  • “There's just more stuff, there's more technology enabled stuff ... and there are more use cases.” (Dana, 11:02)

• Expanded Use Cases:

  • Beyond capacity emergencies, DR now serves economic, renewable balancing, ancillary services, congestion management, and even carbon-based use cases.

• Increasing Relevance:

  • The value proposition has shifted from "vitamin" (nice-to-have) to "painkiller" (must-have), due to rising prices and surging grid demand.

Notable Quote:

“We’ve graduated from capacity, emergency-only to the vast majority of use cases, sometimes being economic or balancing of renewables… even carbon-based use cases.”
— Dana Guernsey (11:18)

Who Participates? Resource and Customer Expansion

• Vertically Diverse Participants:

  • Voltus’s platform now spans 50+ commercial and industrial verticals plus residential — from mom-and-pop retailers to mega-factories and, more recently, AI data centers.

• Resource Types:

  • Still a lot of “load control" (turning things off/reducing usage), but also includes assets like backup generators and — now fastest growing — battery storage systems.
  • “Anything that’s drawing energy is eligible to be something that can use less energy... Increasingly, battery energy storage systems are one of our top growing verticals.” (Dana, 13:46)

Geographic and Market Nuances

• Market Breadth:

  • Voltus operates in every major North American wholesale market.
  • The size of markets (e.g., PJM, ERCOT) drives relative activity more than regulatory preference.

• Pricing Volatility:

  • Some markets (PJM) are infamous for price swings, making portfolio-based risk management essential.
  • “Long ago I gave up the game of trying to predict where auctions would land... Instead, we have a saying internally that we just would like to be happy with our participation in all outcomes.” (Dana, 16:28)

• Payment Smoothing:

  • Increasingly, DR is dispatched year-round, not just during peak events, making revenues more predictable and the service more robust.
  • “Over time, the trend is that this stuff is getting smoother... we are seeing a spreading, a smooshing out of the value.” (Dana, 17:37)

Barriers and Rate Limiters to Rapid Expansion

• Regulatory & Value Signals:

  • Value for DR is strongly tied to market rules and price signals; as these improve, so does the business case.

• Customer and Technology Factors:

  • There’s still friction in getting customers on board and in integrating diverse devices/assets.
  • Data access is a critical barrier, especially in residential — many regions limit access to smart meter data even for customers themselves.
  • “We deployed all these smart meters, we rate-based them, and then it's like, well can we please use the data from them?... In a shocking amount of territories, it's actually quite hard to gain access.” (Dana, 25:48)

The "Bring Your Own Capacity" Model

• What It Is:

  • A new Voltus product enabling large loads (primarily data centers) to directly finance the creation of new capacity — not necessarily by building new plants, but by assembling demand-side resources (e.g., VPPs) that fulfill market-accredited requirements.

• How It Works:

  • Instead of utilities rate-basing new generation (at cost to all customers), the large load pays for and enables new virtual capacity in the region of need — unlocking faster and potentially cheaper expansion.
  • “We are offering a way that increases time to power for large loads ... by allowing them to pay for and fund and bring their own capacity to the table.” (Dana, 27:29)

• Distinct from Traditional Data Center Approaches:

  • Prior “bring your own capacity” deals have tended to fund grid-scale generation (e.g., natural gas plants); now, the model can aggregate smaller, distributed resources instead.
  • "That would be bring your own new power plant... What’s distinct here ...it may instead actually be an aggregation of a bunch of demand side resources in that region.” (Shayle and Dana, 31:14)

• Benefits:

  • Faster deployment (“quicker, which is what everybody wants right now”), usually lower costs for the data center, more direct payments to participating customers, and more sustainable resource use.
  • “If the alternative is going out and building a new natural gas power plant… not only are you going to... see that it’s backordered till 2030, ... but they’re expensive and so it should be more affordable, quicker, which is what everybody wants right now, and more sustainable, kind of better for the community.” (Dana, 36:24)

Notable Quotes & Memorable Moments

• The Boring Revolution:
  "It's gone from this really kind of only extraordinary moment when the resource is used to being super ordinary. In fact, quite dull sometimes."
  — Dana Guernsey, 05:57

• On Who Participates:
  “We have... everything from an electric vehicle in a home to a smart thermostat to mom and pop kind of retail shops, big box stores... on up through industrials ... data centers ... the AI data centers kind of at the top.”
  — Dana Guernsey, 12:17

• On Predicting Prices:
  “Long ago I gave up the game of trying to predict where auctions would land… Instead, we have a saying internally that we just would like to be happy with our participation in all outcomes.”
  — Dana Guernsey, 16:28

• On Framing the Value Proposition:
  “It is faster, it should be more affordable... and at the end of the day, if you follow the money, the money goes back to the consumers and ratepayers themselves by participating in this program.”
  — Dana Guernsey, 36:24

• Market Optimism:
  “The sentiment in the market is one of huge optimism and excitement... the market’s having its moment and people are just excited to get to work.”
  — Dana Guernsey, 24:23

Timestamps for Key Segments

• History & Evolution of DR
  04:32–08:10

• Expansion in Use Cases, Asset Types, Participants
  10:50–13:37

• Resource Types in C&I Demand Response
  13:37–15:05

• Geographic and Market Risk Management
  15:05–17:34

• Earnings Profile: Seasonal Peaks to Smoother Revenue
  17:34–20:53

• Barriers to DER Growth: Regulation, Data, Customers
  22:27–27:05

• The "Bring Your Own Capacity" Product for Data Centers
  27:05–38:32

Conclusion

This episode was a deep dive into the past, present, and future of demand response in the U.S. energy system, revealing how this once-rare resource has become a mundane necessity, how technology and regulation are unlocking new frontiers, and how innovative models like "bring your own capacity" might define the next phase of grid flexibility and decarbonization. Dana Guernsey's insights blend industry history with a forward-looking view, making clear the opportunities for both customers and grid operators as DERs continue to proliferate.

Recommended for listeners interested in:

• Energy transition trends
• Distributed energy resources and grid flexibility
• Data center power solutions
• The evolving business of demand response and VPPs

(All quotes by timestamp and speaker as per transcript.)