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Phoenix Energy Blog
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What is Energy Demand Management


Demand-side response or energy demand management is manipulating and managing load demands from the consumer end through effective programs like incentive options, change in behavioral patterns through education and providing better energy use plans among others.

One of the main goals of energy demand management is convincing customers to reduce energy consumption during peak demand hours or changing energy usage habits to allocate high-energy device use during off-peak periods such as weekends or during late nights. While managing consumption and energy usage habits during peak hours may not necessarily decrease overall energy consumption, but it reduces investments in network hardware and power-plant equipment. Modern developments in energy demand management have allowed grid operators to coincide renewable energy generation with peak-demand hours.


Workings of Energy Demand Management

What is Energy Demand ManagementEnergy usage varies significantly during a day. There are peak demand hours and periods of time when demand is really low. In order to optimize and improve the process of energy generation and transmission, predicting and planning for such demand fluctuations is vital. Things become even more critical when there are changes in demand within short periods of time. While traditional energy generation sources can adjust to changes in demand, during the peak-demands and sudden rise in demands they fall short in providing the additional power efficiently. This instantaneous response to peak demands has serious environmental and financial setbacks as not only do power plants need to ramp-up their operations within a short span of time; also there is no efficient pricing system for supply during such peak times.

Energy demand management systems aim to optimize the demand-supply and optimize energy generation and transmission systems. Energy demand systems are automated systems that send signals to the customers to shed load depending on systems conditions. It also informs the system supervisors about the coming changes in demand patterns. This allows grid supervisors to fine-tune the demand to match the available supply. During such peak-durations energy demand systems protect the various generation and transmission systems from overloading.

Adjustments to demands can be made in a variety of ways. Some of the popular modes of demand adjustment are responding to price signals, differential pricing for demand hours, introducing changes in behavioral patterns through home area networks, automated devices such as remotely controlled air-conditioning systems or installing permanent solutions such as appliances with high energy efficiency ratings. The goal is to demand consumers the accurate price that reflects the value of utility at that point in time.


Some known issues with Energy Demand Management

Some of the common arguments against energy demand management include high utility costs for consumers and a reduction in profits for energy providers. Another issue with energy demand management is privacy. Since consumers need to provide data about their personal energy consumptions, it provides a window into the patterns of their personal lives. However, this privacy issue is being addressed by collecting consumer information through other mechanisms like loyalty cards.

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