12 Facts About Demand response

Demand response is a change in the power consumption of an electric utility customer to better match the demand for power with the supply.

Demand response seeks to adjust the demand for power instead of adjusting the supply.

In many respects, demand response can be put simply as a technology-enabled economic rationing system for electric power supply.

In 2010, demand response was defined as a reduction in demand designed to reduce peak demand or avoid system emergencies.

The difference is that demand response mechanisms respond to explicit requests to shut off, whereas dynamic demand devices passively shut off when stress in the grid is sensed.

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Current demand response schemes are implemented with large and small commercial as well as residential customers, often through the use of dedicated control systems to shed loads in response to a request by a utility or market price conditions.

Demand response is generally used to refer to mechanisms used to encourage consumers to reduce demand, thereby reducing the peak demand for electricity.

Emergency demand response is employed to avoid involuntary service interruptions during times of supply scarcity.

Economic demand response is employed to allow electricity customers to curtail their consumption when the productivity or convenience of consuming that electricity is worth less to them than paying for the electricity.

Smart grid applications increase the opportunities for demand response by providing real time data to producers and consumers, but the economic and environmental incentives remain the driving force behind the practice.

Many independent system operators are structuring the rules of ancillary service markets such that demand response can participate alongside traditional supply-side resources - the available capacity of the generators can be used more efficiently when operated as designed, resulting in lower costs and less pollution.

The selection of suitable industries for demand response provision is typically based on an assessment of the so-called value of lost load.