Energy demand management | Wikipedia audio article

Energy demand management | Wikipedia audio article


Energy demand management, also known as demand-side
management (DSM) or demand-side response (DSR), is the modification of consumer demand for
energy through various methods such as financial incentives and behavioral change through education. Usually, the goal of demand-side management
is to encourage the consumer to use less energy during peak hours, or to move the time of
energy use to off-peak times such as nighttime and weekends. Peak demand management does not necessarily
decrease total energy consumption, but could be expected to reduce the need for investments
in networks and/or power plants for meeting peak demands. An example is the use of energy storage units
to store energy during off-peak hours and discharge them during peak hours. A newer application for DSM is to aid grid
operators in balancing intermittent generation from wind and solar units, particularly when
the timing and magnitude of energy demand does not coincide with the renewable generation.The
American electric power industry originally relied heavily on foreign energy imports,
whether in the form of consumable electricity or fossil fuels that were then used to produce
electricity. During the time of the energy crises in the
1970s, the federal government passed the Public Utility Regulatory Policies Act (PURPA), hoping
to reduce dependence on foreign oil and to promote energy efficiency and alternative
energy sources. This act forced utilities to obtain the cheapest
possible power from independent power producers, which in turn promoted renewables and encouraged
the utility to reduce the amount of power they need, hence pushing forward agendas for
energy efficiency and demand management.The term DSM was coined following the time of
the 1973 energy crisis and 1979 energy crisis. Governments of many countries mandated performance
of various programs for demand management. An early example is the National Energy Conservation
Policy Act of 1978 in the U.S., preceded by similar actions in California and Wisconsin. Demand-side management was introduced publicly
by Electric Power Research Institute (EPRI) in the 1980s. Nowadays, DSM technologies become increasingly
feasible due to the integration of information and communications technology and the power
system, new terms such as integrated demand-side management (IDSM), or smart grid.==Operation==
Electricity use can vary dramatically on short and medium time frames, depending on current
weather patterns. Generally the wholesale electricity system
adjusts to changing demand by dispatching additional or less generation. However, during peak periods, the additional
generation is usually supplied by less efficient (“peaking”) sources. Unfortunately, the instantaneous financial
and environmental cost of using these “peaking” sources is not necessarily reflected in the
retail pricing system. In addition, the ability or willingness of
electricity consumers to adjust to price signals by altering demand (elasticity of demand)
may be low, particularly over short time frames. In many markets, consumers (particularly retail
customers) do not face real-time pricing at all, but pay rates based on average annual
costs or other constructed prices.Energy demand management activities attempt to bring the
electricity demand and supply closer to a perceived optimum, and help give electricity
end users benefits for reducing their demand. In the modern system, the integrated approach
to demand-side management is becoming increasingly common. IDSM automatically sends signals to end-use
systems to shed load depending on system conditions. This allows for very precise tuning of demand
to ensure that it matches supply at all times, reduces capital expenditures for the utility. Critical system conditions could be peak times,
or in areas with levels of variable renewable energy, during times when demand must be adjusted
upward to avoid over-generation or downward to help with ramping needs.In general, adjustments
to demand can occur in various ways: through responses to price signals, such as permanent
differential rates for evening and day times or occasional highly priced usage days, behavioral
changes achieved through home area networks, automated controls such as with remotely controlled
air-conditioners, or with permanent load adjustments with energy efficient appliances.==Logical foundations==
Demand for any commodity can be modified by actions of market players and government (regulation
and taxation). Energy demand management implies actions that
influence demand for energy. DSM was originally adopted in electricity,
but today it is applied widely to utilities including water and gas as well.Reducing energy
demand is contrary to what both energy suppliers and governments have been doing during most
of the modern industrial history. Whereas real prices of various energy forms
have been decreasing during most of the industrial era, due to economies of scale and technology,
the expectation for the future is the opposite. Previously, it was not unreasonable to promote
energy use as more copious and cheaper energy sources could be anticipated in the future
or the supplier had installed excess capacity that would be made more profitable by increased
consumption.In centrally planned economies subsidizing energy was one of the main economic
development tools. Subsidies to the energy supply industry are
still common in some countries.Contrary to the historical situation, energy prices and
availability are expected to deteriorate. Governments and other public actors, if not
the energy suppliers themselves, are tending to employ energy demand measures that will
increase the efficiency of energy consumption.==Types==
Energy efficiency: Using less power to perform the same tasks. This involves a permanent reduction of demand
by using more efficient load-intensive appliances such as water heaters, refrigerators, or washing
machines. Demand response: Any reactive or preventative
method to reduce, flatten or shift demand. Historically, demand response programs have
focused on peak reduction to defer the high cost of constructing generation capacity. However, demand response programs are now
being looked to assist with changing the net load shape as well, load minus solar and wind
generation, to help with integration of variable renewable energy. Demand response includes all intentional modifications
to consumption patterns of electricity of end user customers that are intended to alter
the timing, level of instantaneous demand, or the total electricity consumption. Demand response refers to a wide range of
actions which can be taken at the customer side of the electricity meter in response
to particular conditions within the electricity system (such as peak period network congestion
or high prices), including the aforementioned IDSM. Dynamic demand: Advance or delay appliance
operating cycles by a few seconds to increase the diversity factor of the set of loads. The concept is that by monitoring the power
factor of the power grid, as well as their own control parameters, individual, intermittent
loads would switch on or off at optimal moments to balance the overall system load with generation,
reducing critical power mismatches. As this switching would only advance or delay
the appliance operating cycle by a few seconds, it would be unnoticeable to the end user. In the United States, in 1982, a (now-lapsed)
patent for this idea was issued to power systems engineer Fred Schweppe. This type of dynamic demand control is frequently
used for air-conditioners. One example of this is through the SmartAC
program in California. Distributed Energy Resources: Distributed
generation, also distributed energy, on-site generation (OSG) or district/decentralized
energy is electrical generation and storage performed by a variety of small, grid-connected
devices referred to as distributed energy resources (DER). Conventional power stations, such as coal-fired,
gas and nuclear powered plants, as well as hydroelectric dams and large-scale solar power
stations, are centralized and often require electric energy to be transmitted over long
distances. By contrast, DER systems are decentralized,
modular and more flexible technologies, that are located close to the load they serve,
albeit having capacities of only 10 megawatts (MW) or less. These systems can comprise multiple generation
and storage components; in this instance they are referred to as hybrid power systems. DER systems typically use renewable energy
sources, including small hydro, biomass, biogas, solar power, wind power, and geothermal power,
and increasingly play an important role for the electric power distribution system. A grid-connected device for electricity storage
can also be classified as a DER system, and is often called a distributed energy storage
system (DESS). By means of an interface, DER systems can
be managed and coordinated within a smart grid. Distributed generation and storage enables
collection of energy from many sources and may lower environmental impacts and improve
security of supply.==Scale==
Broadly, demand side management can be classified into four categories: national scale, utility
scale, community scale, and individual household scale.===National scale===
Energy efficiency improvement is one of the most important demand side management strategies. Efficiency improvements can be implemented
nationally through legislation and standards in housing, building, appliances, transport,
machinaries etc.===Utility scale===
During peak demand time, utilities are able to control storage water heaters, pool pumps
and air conditioners in large areas to reduce peak demand, e.g. Australia and Switzerland. One of the common technologies is ripple control:
high frequency signal (e.g. 1000 Hz) is superimposed to normal electricity (50 or 60 Hz) to switch
on or off devices. In more service-based economies, such as Australia,
electricity network peak demand often occurs in the late afternoon to early evening (4pm
to 8pm). Residential and commercial demand is the most
significant part of these types of peak demand. Therefore, it makes great sense for utilities
(electricity network distributors) to manage residential storage water heaters, pool pumps,
and air conditioners.===Community scale===
Other names can be neighborhood, precinct, or district. Community central heating systems have been
existing for many decades in regions of cold winters. Similarly, peak demand in summer peak regions
need to be managed, e.g. Texas & Florida in the U.S., Queensland and New South Wales in
Australia. Demand side management can be implemented
in community scale to reduce peak demand for heating or cooling. Another aspect is to achieve Net Zero Energy
Building or community.Managing energy, peak demand and bills in community level may be
more feasible and viable, because of the collective purchasing power, the bargaining power, more
options in energy efficiency or storage, more flexibility and diversity in generating and
consuming energy at different times, e.g. using PV to compensate day time consumption
or for energy storage.===Household scale===
In areas of Australia, more than 30% (2016) of households have rooftop photo-voltaic systems. It is useful for them to use free energy from
the sun to reduce energy import from the grid. Further, demand side management can be helpful
when a systematic approach is considered: the operation of photovoltaic, air conditioner,
battery energy storage systems, storage water heaters, building performance and energy efficiency
measures.==Examples=====Queensland, Australia===
The utility companies in the state of Queensland, Australia have devices fitted onto certain
household appliances such as air conditioners or into household meters to control water
heater, pool pumps etc. These devices would allow energy companies
to remotely cycle the use of these items during peak hours. Their plan also includes improving the efficiency
of energy-using items, encouraging the use of oil instead of electricity, and giving
financial incentives to consumers who use electricity during off-peak hours, when it
is less expensive for energy companies to produce.Another example is that with demand
side management, Southeast Queensland households can use electricity from rooftop photo-voltaic
system to heat up water.===Toronto, Canada===
In 2008, Toronto Hydro, the monopoly energy distributor of Ontario, had over 40,000 people
signed up to have remote devices attached to air conditioners which energy companies
use to offset spikes in demand. Spokeswoman Tanya Bruckmueller says that this
program can reduce demand by 40 megawatts during emergency situations.===California, US===
California has several demand side management programs, including automated and critical
peak pricing demand response programs for commercial and industrial customers as well
as residential consumers, energy efficiency rebates, non-event based time-of-use pricing,
special electric vehicle charging rates, and distributed storage. Some of these programs are slated to be added
into the wholesale electricity market to be bid as “supply side” resources that can be
dispatched by the system operator. Demand side management in the state will be
increasingly important as the level of renewable generation approaches 33% by 2020, and is
expected to be increased beyond that level in the long-term.===Indiana, US===
The Aloca’s Warrick Operation is participating in MISO as a qualified demand response resource,
which means it is providing demand response in terms of energy, spinning reserve, and
regulation service.===Brazil===
Demand-side management can apply to electricity system based on thermal power plants or to
systems where renewable energy, as hydroelectricity, is predominant but with a complementary thermal
generation, for instance, in Brazil. In Brazil’s case, despite the generation
of hydroelectric power corresponds to more than 80% of the total, to achieve a practical
balance in the generation system, the energy generated by hydroelectric plants supplies
the consumption below the peak demand. Peak generation is supplied by the use of
fossil-fuel power plants. In 2008, Brazilian consumers paid more than
U$1 billion for complementary thermoelectric generation not previously programmed. In Brazil, the consumer pays for all the investment
to provide energy, even if a plant sits idle. For most fossil-fuel thermal plants, the consumers
pay for the “fuels” and others operation costs only when these plants generate energy. The energy, per unit generated, is more expensive
from thermal plants than from hydroelectric. Only a few of the Brazilian’s thermoelectric
plants use natural gas, so they pollute significantly more. The power generated to meet the peak demand
has higher costs—both investment and operating costs—and the pollution has a significant
environmental cost and potentially, financial and social liability for its use. Thus, the expansion and the operation of the
current system is not as efficient as it could be using demand side management. The consequence of this inefficiency is an
increase in energy tariffs … passed on to the consumers.Moreover, because electric energy
is generated and consumed almost instantaneously, all the facilities, as transmission lines
and distribution nets, are built for peak consumption. During the non-peak periods their full capacity
is not utilized.The reduction of peak consumption can benefit the efficiency of the electric
systems, like the Brazilian system, in some senses: as deferring new investments in distribution
and transmission networks, and reducing the necessity of complementary thermal power operation
during peak periods, which can diminish both the payment for investment in new power plants
to supply only during the peak period and the environmental impact associated with greenhouse
gas emission.==Issues==
Some people argue that demand-side management has been ineffective because it has often
resulted in higher utility costs for consumers and less profit for utilities.One of the main
goals of demand side management is to be able to charge the consumer based on the true price
of the utilities at that time. If consumers could be charged less for using
electricity during off-peak hours, and more during peak hours, then supply and demand
would theoretically encourage the consumer to use less electricity during peak hours,
thus achieving the main goal of demand side management.Another problem of DSM is privacy,
as consumers have to provide some information about their usage of electricity to their
electricity company. This is less of a problem now as people are
used to suppliers noting purchasing patterns through mechanisms such as “loyalty cards”.==See also====Notes

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