DSM and Demand Respone - Concepts Universally Accepted...

Joao Batista Gomes | Sep 20, 2011


There are many definitions of DSM and Demand Response, Demand Response is a new name possibly the most charming for the Demand Side Management - DSM. The proponents of the Demand Response argue that the two terms are not necessarily equal. May be Demand Response can be only one new piece of DSM, but the two methods provides for smarter energy use and more efficient operation.

But the Demand Response is not energy efficiency as its main target, although Demand Response programs can serve as a complement to the efforts of energy efficiency. Demand Response is different from energy efficiency, but Demand Response does not primarily aim to save energy, you only respond, if you want, when provoked while DSM can be mandatory or voluntary membership.

DSM programs have energy efficiency as its primary goal, but programs such as Demand Response have two main goals:

  1. Economic benefits -- for the consumer and the utility.

  2. Customer satisfaction and improve the reliability of the entire power system.

Improve the service provided to customers is a primary goal of Demand Response programs, consumers have the opportunity to save money by shifting their energy consumption over time for the energy use of lower price of the day.

The success of this program is the fact that it was designed from the ground up with customer focus as the only priority. Response to Demand for residential work, the utility must provide a tariff structure that encourages customers to change their consumption habits, and the program must be understandable and easy to use.

The flaws in the supply side of the electric power industry may be relieved temporarily, with the randomness of supply and demand becomes necessary to maintain the Demand Response programs in place as an aid to security and system reliability.

Demand Response can be part of the solution to the problems associated with deficits in energy generation, and can help alleviate the lack of capacity of Transmission and Distribution. Demand Response is not just a fad, it's here to stay.

The negotiation of Demand is based on customer demand, the ability of consumers to respond to price changes in the short term - as the next day or hours in advance -- or from one region to the energy supply capacity by reducing demand at times appropriate.

The negotiations on Demand Response projects with customer, promises a substantial increase in efficiency, stability and reliability of the energy sector.

The negotiations that recognize the value of time in energy use can be used to help optimize the balance between Supply and Demand, encouraging clients to actively engage.

Demand Response programs become important to manage price and risk, as are a link between the wholesale energy markets and also at retail.

The Load profile of the residential consumer and the ability to restrict energy use can vary greatly, but the aggregation of its reductions provides a highly reliable resource for planners in the energy market.

The definition of trade in energy demand is based on conventional demand response approaches such as voluntary programs, demand bidding, the cutting options and pricing in real time.

Trading Demand provides a wide avenue for the provision of resources to view, such a response in the regional energy markets through a variety of marketing tools.

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In the long run, pricing in real time is the most effective and most cost-effective solution. Every decision made, every step taken should be done keeping this in mind.

To get out of the concept of “Pilot Projects” for “Universal Acceptance” in the area of Smart Grid - DSM and Demand Response -, we must implement Tariff Structures to encourage consumers to use less energy during peak hours.

I know from my experience that consumers in Lower Income and Consumption are the most readily available for these projects.
And it only happens for a reason, every penny saved, is representative for the monthly budget of this Class of Consumers.

How to reflect this same situation for other Classes of Consumers?
Perhaps we should build a new Tariff Structure - the price of KWh is differentiated by level of power consumption.

So we must deploy “Different Rates” for each “Class of Consumer”, it is more socially correct to charge more of those who consume more.

But how do this without bringing the Financial Damage to the Utilities?
Without a financial signal for “each class” of consumers, the “impedance” increases for membership of consumers.
Without a guarantee of Profit, the “impedance” becomes to the side of Utilities.
I think the agreement can be built from here…

There is mutual benefit for the community to forgo power usage during peaking events. Everyone saves (a lot) of money. We just need to develop a mechanism that works well. The strategy of the commons???

Historically, residential consumers can shift their energy consumption to off-peak hours, the maximum of 20%.

Some utilities have developed tariff structures that benefit consumers, but the balance is hard, on the one hand you have that benefit the consumer and the utility on the other side has to remain profitable.

We're all looking for ideas and solutions that can accommodate all demands.

Demand Response Programs, load transfer from consumers during periods of high demand for off-peak periods and can reduce peak demand.
Shift in demand outside the peak time, flattens the Load Curve of Distribution Systems, and thus add more consumers to the Grid - maintaining the same generating capacity - allowing more energy supplied to the less expensive base load generation.

Demand response programs can also save the cost of construction of additional generation capacity to meet peak demand future criticism.

To encourage participation in demand management, utilities, found that rebate checks, compensation for participation in pilot projects.

Some utilities a few years ago implemented a project DSM to “Consumers Single-Phase” and maximum monthly consumption of 200 KWh, where membership was not mandatory, each consumer, received 20% discount on their energy bills.
In return allowed its consumption during peak hours - two hours a day - were limited in 2000 Watts, but on weekends consumption was released.

In summary, different classes of customers require different solutions can be a mistake the mass projects Demand Response, without taking into account the characteristics of consumption and also the characteristics of distribution systems.

To be really useful, DSM must be predictable. So it cannot be left to the whims of the consumer to take part or not.

Radio ripple control has been developed in Germany and can provide low cost individualized centralized control of 6 million relays from one transmitter. It operates at low frequencies and so has very wide coverage.

This system is much cheaper than smart metering and provides certainty to the system operator while relieving the consumer of the need to constantly monitor power prices.

Bryan. I disagree with your proposed "big brother" solution. The level of intrusiveness would be tremendous in order to achieve the same results as an intelligent retail market system, and upset customers would be constantly badgering the utility staff to re-configure their systems, at very high ongoing customer service costs.

I agree fully with Len. No big brother solution . Life is not predictable, free market is the best solution . Let the market develop technology that provide flexible energy solution without plan economic intervention . Future energy solution will be small-scale, distributed and able to respone on demand

The market place will decide. Bill replaced his grid powered alarm clock with a battery operated one. The reason I am sure is that grid powered alarm clocks have all but disappeared from the shelves of stores replaced by cell phone alarms and cheap battery operated devices as he notes.

Big brother solutions never work very well in a free society. Let the market price determine whether people change their demand habits. As the various experiments with the electricity grid continuously and relentlessly drive up the cost of electricity people will look for alternatives and when the transaction cost of the alternatives (such as roof top solar and gas fired fuel cells) is lower than the cost of continuing with a grid supply people will disconnect. That is exactly the experience with land lines versus cell phones. In the next 30 years land lines to homes will disappear because the convenience and cost (the transaction cost) of cell phones is lower than land lines.

The electricity industry thinks it has a captive market that will support whatever cost increases it inflicts on its customers. That is a dangerous delusion. If I lived in California (no snow) I would already have solar hot water and solar electric on my roof top. As gas fuel cell technology gets cheaper and more available those in any corner of any country with access to natural gas will be able to produce their own electricity and hot water. No grid required.

Peak demands may well vanish and I think that there are signs of this already occurring in many jurisdictions.


"This system is much cheaper than smart metering and provides certainty to the system operator while relieving the consumer of the need to constantly monitor power prices."

That just sounds really creepy. BTW. Power prices could be monitored with a microchip costing about 50 cents.

I'd think that consumer response, leveled out over millions of customers, would actually be reasonably predictable. Central value limiting theorem and all.

A big problem I see is that the utilities will never give real-time pricing a chance. They've been stonewalling this from day one. I say screw 'em! People should create their own power, and use it as needed. Even if you only have enough to run your fridge or your A/C or whatever. Use the grid when the sun doesn't shine or the wind doesn't blow. Now the grid becomes this uneconomical (to them!) backup that just provides power when your own sources are down. It become the 'storage' that is so expensive with RE. You never send your own power to it, and you purchase less of it yourself. The grid then has a long-term trend likened to telephone land lines. A huge withering vine.