The heightened growth in demand for electricity is the reason for financial burdens on consumers as well as on electric utilities. Amplified electricity bills cause consumers to consider accepting a more balanced use of electricity. Simultaneously, electric utilities are forced to take into consideration efforts that will slow down this growth. Positive measures can curb this growth in demand into manageable levels, which are also economical and beneficial to consumers, utilities, and the national economy. These measures and activities are integral parts of DSM programs. The matters associated with grid sustainability and reliability can be addressed by demand-side management (DSM).
The DSM is a set of load management actions, which includes planning, implementation, and monitoring of pre-defined activities that affect the consumers’ electricity utilization patterns. The DSM can systematically transmit and distribute available energy to decrease carbon emissions and peak loads as well as allows users to choose their preferred energy type.
Significance of DSM
Grid Stability and Reliability: DSM programs support utilities manage the electricity grid more effectively by reducing peak load demand and variability. By employing DSM measures, such as load shifting or demand response, utilities can avoid grid congestion, avoid blackouts, and improve system reliability.
Energy Efficiency and Conservation: DSM encourages energy users to adopt energy-efficient practices and skills, thereby dropping overall energy consumption. By optimizing energy use, DSM reduces the need for additional power generation capacity and helps attain energy savings and cost drops for consumers.
Environmental Impact: The implementation of DSM strategies helps in reducing greenhouse gas emissions. DSM contributes to the goals of sustainability and mitigation of climate change by promoting energy conservation and load management.
Integration of Renewable Energy: DSM facilitates the integration of intermittent renewable energy sources, such as solar and wind power, into the electricity grid. Demand response programs of DSM can bring into line electricity consumption with renewable energy generation, effectively managing the irregular nature of renewables and reducing reliance on conventional fossil fuel-based power plants.
Economic Benefits: DSM can provide economic returns to both consumers and utilities. For consumers, energy-efficient practices and demand response programs can result in reduced energy bills. Utilities can benefit from lower infrastructure costs by avoiding the need for new power plants or grid upgrades.
Policy and Regulatory Support: DSM has gained substantial attention from policymakers and regulatory bodies worldwide. Governments, through regulatory frameworks and incentives, encourage utilities and consumers to adopt DSM practices to attain energy efficiency goals, reduce energy costs, and address environmental concerns.
Demand-side management is a critical approach to optimizing energy consumption, enhancing grid stability, promoting renewable energy integration, and achieving environmental sustainability. By enthusiastically engaging energy consumers, DSM programs offer momentous benefits in terms of cost savings, reduced environmental impact, and improved grid operations. The significance of DSM continues to grow as the world shifts towards a more sustainable and competent energy future.
Motivation for the review paper
Every day abundant new articles are being published in reputed journals, which account for a varied range of fitness functions estimating the economic energy management of DSM. Two significant features of the existing review articles are the DSM methods’ classification and the scope of discussion.
Requirements of stability, security, reliability, and profit maximization have imposed such interest being put up in these areas of research about DSM. The motivation behind the increased interest in DSM techniques application has been described below as follows:
- To adjust the required demand by matching the energy resources and energy accessibility without adding new sources to the existing system.
- To provide an interactive load management market where each consumer depicts an active role in achieving an overall low-cost energy consumption.
- To ensure proper load balancing by either reduction or shift of the energy consumption from peak hours to fewer congestion periods.
- To improve load factor due to load shifting.
- To enhance consumer alertness of the benefits of DSM to reassure the adoption or change the pattern of electricity usage accordingly.
DSM in India
Utilities in India have recognized DSM as an integral component of their operational planning. Utilities have designed DSM programs to encourage customers to alter their habits of electricity used to make the load as consistent as possible. DSM programs have been designed with the sight of changing both the timing and the magnitude of the utilization of electricity. Exercising of such activity demonstrates to be beneficial and cost-effective, thereby maximizing the productivity of utility resources. Consumers benefit by having better control over the usage of electricity and thus the kWh costs.
Historical Development of DSM
Evolution of DSM practices over time: The electricity supply industry is a cost-based managed pricing in retail markets with average rates that often snub highly variable supply-side costs, i.e., wholesale electricity costs. Demand Side Management (DSM) is customer response”. The changing use of energy in response to market factors including controlled by the conservation of energy, demand response defined by the prices and/or production costs, and load management which involves the demand shifting from high price to low-price periods. It is realized that efficient markets require the appropriate interaction of demand and supply. In an inelastic demand, the supply side will set prices (Violette, 2007).
Demand Side Management (DSM) is defined as the cooperative activities between the power company and its customers (sometimes with the assistance of third parties such as various trade allies and energy services companies). The main objective of such cooperation is to implement programs for increasing the efficiency of energy use, with resulting monetary gains to the customer, utility and society as a whole.
DSM was put under focus during the 1980s to mid-1990s after the oil curb. The latter caused a sharp increase in energy prices and caused governments and electric utilities to find the ways to reduce energy demand so that the overall energy bill is reduced. This results in higher interest in Energy Efficiency (EE) and the associated incentive policies, and in the restructuring of wholesale and retail markets to meet the move to the competitive market.
Another stimulus was triggered after the year 2000, which was caused by the sharp increase in energy costs (oil and gas), cost volatility causing price spikes, power system constraints, and environmental uncertainties. As such EE and Deregulation (DR) can be viewed as hedges against a wide range of risks.
Both EE and DR are observed as integrated solutions of the same spectrum of services. However, EE supporters resist DR investments and EE/DR integration.
The present situation is equivocal, as DSM supporters are spending functional amounts, while many utilities actively support DR to enhance reliability and go to floating prices where the customer can survey for the best deals.
Moreover, incentives for DSM investment are highly supported, and renewables are becoming more viable alternatives. DSM options are now viewed as diversified resources and can provide a physical hedge against different uncertainties.
Milestones and key initiatives in DSM Implementation
Demand-side management has progressed with several noteworthy milestones and key initiatives driving its implementation and advancement. Here are some notable milestones and initiatives in the history of DSM:
Energy Crisis of the 1970s: The oil crisis of the 1970s emphasized the vulnerability of energy systems and the need for energy conservation. To reduce energy consumption and alleviate stress on the grid, governments and utilities started exploring demand-side measures.
California’s Residential Rate Reform Initiative (1977): The Residential Rate Reform Initiative introduced Time-Of-Use (TOU) pricing, inspiring consumers to shift their energy usage to off-peak hours thus emphasizing peak load reduction.
Load Management Programs in the 1980s: Direct Load Control (DLC) and Load Shedding were the technologies used by utilities for management. These programs were intended to curtail peak demand by remotely controlling a few appliances during
peak periods.
Demand Response Programs: Demand response (DR) programs gained fame during the 1990s, allowing utilities to incentivize consumers to alter their energy consumption in response to grid conditions. To motivate consumers to reduce electricity use during peak periods dynamic pricing, critical peak pricing, and demand bidding programs were introduced.
Energy Policy Act of 2005 (United States): The Energy Policy Act of 2005 assigned the establishment of demand response programs and required utilities to offer demand response options to consumers in order to enhance grid reliability and efficiency.
Advanced Metering Infrastructure (AMI) Deployment: To improve communication between utilities and consumers smart meters and advanced metering infrastructure were deployed to enable real-time monitoring.
Integration of Renewables and Distributed Energy Resources (DERs): Demand response programs nowadays incorporate strategies to bring into line electricity consumption with renewable energy generation, optimizing grid stability and reducing dependence on fossil fuels.
Technology-Driven DSM Solutions: Precise and automated control of energy consumption is made possible with advancements in technology, such as smart thermostats, home energy management systems, and IoT devices.
International DSM Programs: Countries implementing their own DSM programs and policies examples include the European Union’s Energy Efficiency Directive, Japan’s Top Runner Program, and various demand response programs in countries like Australia, Canada, and Germany.
Some of the milestones and key initiatives in DSM implementation in the Indian context are:
For energy consumption, multi-sectoral legislation Energy Conservation Act (2001), specifies standards, norms, codes, and mechanisms.
Various schemes and programs for energy efficiency and conservation are implemented under the statutory body the Ministry of Power, Bureau of Energy Efficiency (BEE).
To reduce the energy consumption of commercial buildings through design, construction, operation a program the Energy Conservation Building Code (ECBC) and Energy Efficiency in Existing Buildings program.
The Bachat Lamp Yojana (BLY), is a market-based mechanism that facilitates the replacement of inefficient incandescent lamps with reduced-cost Compact Fluorescent Lamps (CFLs) at for consumers.
To improve the efficiency of pump sets, street lighting, water supply, and sewage systems in rural and urban areas the Agriculture and Municipal Demand Side Management (DSM) program is implemented.
These milestones and key initiatives have played a decisive role in shaping the development and implementation of demand-side management strategies, for more effective grid management, energy efficiency, and sustainable energy practices.
To be continued…
Shibna Hussain is pursuing PhD in Dept. of Renewable Energy, RTU Kota. Her research area is Smart Grid Management System.
Dr. Santosh Kumar Sharma is working as an Assistant Professor in Electrical Engg. Dept., Rajasthan Technical University, Kota. He did his PhD from RTU kota. His research areas are power system analysis, PV system, micro grid and renewable energy assessment.
Dr. Shiv Lal is Associate Professor in Mechanical engineering department, Rajasthan Technical University Kota, India. He did his PhD degree from IIT Delhi and holds expertise in energy assessment, buildings passive heating and cooling, energy and exergy analysis, solar chimney power plant, renewable energy, design of thermal systems, heat transfer, IC engine, solar refrigeration etc.
