Energy demand management

Energy demand management, also known as demand-side management (DSM) or demand-side response (DSR),^[1] is the modification of consumer demand for energy through various methods such as financial incentives^[2] 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.^[3] 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.^[4]

A newer application for DSM is to aid grid operators in balancing variable generation from wind and solar units, particularly when the timing and magnitude of energy demand does not coincide with the renewable generation. Generators brought on line during peak demand periods are often fossil fuel units. Minimizing their use reduces emissions of carbon dioxide and other pollutants.^[5][6]

The term DSM was coined following the time of the 1973 energy crisis and 1979 energy crisis.^[7] 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.^[8] 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.^[9][10]