PrintDemand Side Management
Electricity is not easily or efficiently stored in large amounts. In an electricity grid, power generation and power consumption must be closely matched at all times. If power generation and power consumption get out of balance, blackouts and other systemic failures occur. Hence, electricity must be produced on-demand, as needed. Naturally, demand changes throughout each day and throughout the year. Demands are met with a combination of power plants that are used all the time (base load) and others that are used when needed to meet peak demand. Together, they must have the collective capacity to meet actual demand, real-time.
Large swings in demand are expensive and problematic. When demand is low, expensive generating facilities (built to meet peak requirements) are sitting offline idle. When demand is high, all available generators are online, running full tilt, stressing the system, and risking reliability. Reducing large swings in demand allows for the more cost and energy-efficient design and operation of the electricity grid and its generators.
To achieve this balance, widespread efforts are being made to involve the consumer in the management of electricity demand. Overall, the umbrella term for working with customers to balance their electricity usage with the available supply is called demand response. The essential component is some form of communication with the customer or the customer’s systems so that they know when a change in their demand is desirable (supply is low, use less or supply is high, good time to use more).
There are many ways to accomplish this using tools and methods described as demand-side management (DSM). EIA defines DSM as follows:
"Demand-side management (DSM): A utility action that reduces or curtails end-use equipment or processes. DSM is often used in order to reduce customer load during peak demand and/or in times of supply constraint. DSM includes programs that are focused, deep, and immediate such as the brief curtailment of energy-intensive processes used by a utility's most demanding industrial customers, and programs that are broad, shallow, and less immediate such as the promotion of energy-efficient equipment in residential and commercial sectors."
Because of seasons and weather patterns, the United States' electric grid is built for capacity we almost never use. A report from Advanced Energy Economy (AEE) finds that 10% of the country's electric system is built to meet demand in just 1% of a year's hours. And reducing those demand peaks – typically met with the costliest, dirtiest electricity generation – can have a significant impact on consumers' bottom lines. UtilityDIVE (Nov 4, 2015)
Other terms related to this topic are load shifting and load leveling (both refer to rescheduling electricity usage to reduce peaks), time-of-day or time-of-use pricing or real-time pricing (customer is charged more for electricity used during peak periods) and smart grid (see below).
Some content on this page came from an earlier version of this course and was written by Vera Cole.
EGEE 401: Energy in a Changing World by Vera Cole via the Pennsylvania State University is licensed under CC BY-NC-SA 3.0 (https://creativecommons.org/licenses/by-nc-sa/3.0/)