The demand side management or DSM refers to programs to modify the timing or quantity of customers’ energy consumption. Sometimes, the demand for electricity can change drastically due to unforeseen weather changes, a spike in economic growth, damage to power lines, or other variables. Sharp changes have the potential to cause power outages in rare circumstances. Power demand may peak at a period when the erratic supply of renewable energy is low, so the switch to renewable energy also affects these fluctuations. A more adaptable energy grid is required under the new energy situation.
The good news is that utilities have a potent tool at their disposal to control these peak-load demands, allowing them to guarantee service and, increasingly, offer savings to customers. Electricity utilities use demand side management (DSM) as a strategy to reduce demand by enticing customers to change the amount and frequency of their energy use. A demand side management program usually takes place on the user’s property and offers financial incentives to persuade customers to purchase energy-efficient equipment or lower prices in exchange for their agreement to cut back on usage during times of high demand.
The utility benefits from an even supply, and the customer benefits from lower prices when customers agree to reduce their energy use at times when demand (and prices) are greatest and move their consumption to times when energy is more abundant.
Why Demand Side Management is Important?
The way we use energy has never been a more essential subject than it is right now due to the twin challenges of the energy transition and geopolitical changes in supply. Demand Side Management (DSM) programs operated by utilities are crucial in this situation because they can assist users in becoming more efficient and saving energy. Lower expenses and a benefit to the environment due to fewer emissions follow from energy savings.
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What are the Benefits of Demand Side Management?
Three significant advantages of demand side management include:
- First off, it aids in lowering electricity market prices by sparing the utility the cost of constructing backup (and occasionally fossil-fuelled) plants that are brought online to meet peak demand.
- It lowers the expense of running the electrical infrastructure.
- It produces a more effective and dependable energy network by adjusting demand.
- Shifting demand to off-peak hours can help customers reduce their energy costs, especially if they are big businesses or industries.
- Because DSM programs give network managers the ability to plan usage, they can reduce the risk of unanticipated demand spikes that could result in power outages.
- Utilities can avoid the cost of purchasing electricity on the open market in the event of a sudden spike in demand and can avoid having to construct new generating capacity to meet peak demand loads.
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