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Demand Side Management

• The focus of the course meeting consumer
load demand in most economic way.
• It has been mainly concerned with supply
• DSM is about changing consumer demand to
reduce the costs to consumer and utility.
• With renewables becomes more important
Utility Load Shape Objectives
Load Management
• Sometimes used as synonymous to DSM
maybe considered as subset of DSM.
• Direct Load Control (e.g. Cycling of air
• Indirect Load Control (Tariff and incentive
Load Management Options
• Staggering of working hours of large
• Staggering of holidays of large consumers
• Energy and power quotas for consumers
• Rostering of agricultural loads
• Load shedding
Indirect Control
• Traditional:
-Two part tariff (Kwh price and peak demand
-Contracted demand
-Power factor (incentives and penalty)
• Time of Use (ToU) Tariff:
Peak Shifting, Possibility of Secondary peak
Load Reduction (efficiency) based DSM
• Efficient pumping systems (Industrial,
Agricultural, Municipal)
• Efficient Motor Drive System
• Efficient Lighting
• Process Improvements
• Solar Heaters
• Captive Generation/Co-generation
Efficiency based DSM
• Payback period
• Technology Adoption (Fisher Pry Curve)
• Incentives (Price based e.g. free LEDs, loan
• Fixed, variable cost of DSM
• Free Riders (People who anyway are adopting
technology but get free incentives)
Demand Response
• Matching demand of the power to supply
• Change in the power economics
• Addition of renewables.
• Requires smart metering
• And smart grid
• “Changes in electric usage by end-use customers
from their normal consumptionpatterns in
response to changes in the price of electricity over
time, or to incentive payments designed to induce
lower electricity use at times of highwholesale
market prices or when system reliability is
jeopardized.” DOE Report to US Congress in 2006.
Benefits of DR
• Financial benefits to participants
• Reliability benefits
Some of the DR methods are designed for
Options for DR
• Price Based
-Time of Use Tariffs (already discussed)
-Real Time Pricing (Like TOU, however, prices are
announced day ahead or hour ahead)
-Critical Peak pricing (Hybrid of RTP and TOU,
prices are based on TOU, however, if system
reliability is compromised or very high prices,
prices rise steeply.
Options for DR
• Incentive Based
-Direct Load Control (Already discussed)
-Interruptible/Curtailable Service (Contract to
reduce or interrupt loads if reliability is
-These have penalties if curtailment is not carried
-Other market based programs such as direct bidding
DSM in India