INTRODUCTION / DEFINITION / MEANING OF D-
use through activities or programs that promote electric
S-M
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 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.
Demand-side management (DSM) programs consist of
the planning, implementing, and monitoring activities of
electric utilities which are designed to encourage consumers
to modify their level and pattern of electricity usage.
(Or)
Demand-side management involves reducing electricity
energy efficiency or conservation, or more efficient
management of electric energy loads. These efforts may:
Promote high efficiency building practices
Promote the purchase of energy-efficient ENERGY
STAR products
Encourage the transition from incandescent lighting to more
efficient lighting technologies
Encourage customers to shift non-critical usage of electricity
from high-use periods to after 7 p.m. or before 11 a.m.
Consist of programs providing limited utility control of
customer equipment such as air conditioners
Promote energy awareness and education
Electrical energy cant be stored cheaply or in great quantities.
Therefore supply and demand has to be balanced simultaneously. To
ensure sustenance of supply, the total capacity of electricity
generation must be larger than the maximum demand. During the
past years, the demand for electricity is rising every year. The
economic cost and environmental impact to build new power plants to
satisfy the rising demand will be very expensive.
Demand Side Management (DSM) techniques provide variety
of measures to reduce energy consumption, which leads to more
manageable demand.
Demand Side Management
 Conservation refers to reduction in consumption by
consumers. There is net reduction in both demand and total energy
consumption. Strategic conservation can be implemented by
motivating customers to use more energy-efficient appliances.

Load Shifting involves shifting loads from on-peak to off-peak

periods. The net effect is a decrease in peak demand, but not change
in total energy consumption.

DSM techniques

Direct load control

Load limiters

Commercial/industrial programs

Frequency regulation

Time of use pricing

Demand bidding

Forms of DSM Smart metering and appliances

Any DSM technique implemented may result in one of the DSM benefits to the sector
forms of demand reduction:
Improving overall energy efficiency

Peak Clipping refers to the reduction of utility loads during
peak demand periods. This can delay the need for additional
generation capacity. The net effect is a reduction in both peak
demand and total energy consumption. Peak clipping can be achieved
by direct control of customers appliances.
Improving reliability and quality of power supply
Improving efficiency in transmission and distribution networks
infrastructure investments and operations
Reducing the risk of power shortages
 Saving capital investment to build new power plants energy labelling of appliances
standards for new buildings
Delivering energy to consumers more economically
energy taxes
Saving the environment
grants or loans towards energy saving measures

Energy Efficiency and Demand Side Management (DSM) have Various reasons are put forward for promoting or undertaking DSM.
significant potential in India. The need for affordable electricity and the For example, DSM may be aimed at addressing the following issues
energy and peak shortages make DSM important for India.
o Cost reductionmany DSM and energy efficiency efforts have
been introduced in the context of integrated resource planning
The DSM initiatives can be divided into two major categories: and aimed at reducing total costs of meeting energy demand;
o Environmental and social improvementenergy efficiency and
Initiatives that bridge energy supply-demand gap through energy DSM may be pursued to achieve environmental and/or social goals
efficiency programs. by reducing energy use, leading to reduced greenhouse gas
emissions;
Initiative which calls for voluntary response of customers to curtail their o Reliability and network issuesameliorating and/or averting
demand when asked by participating in demand response measures. problems in the electricity network through reducing demand in
For a developing country such as India, it provides additional ways which maintain system reliability in the immediate term and
economic value by preserving the resource base. over the longer term defer the need for network augmentation;
o Improved marketsshort-term responses to electricity market
conditions (demand response), particularly by reducing load
In present scenario, energy efficiency assumes even greater
during periods of high market prices caused by reduced
significance because it is the most cost effective and reliable means of generation or network capacity.
mitigating global climate change.
An energy customer may have many reasons for selecting a
Identification of potential for energy efficiency in energy intensive certain DSM activity.Generally these would be economic,
equipment and processes can open vast reserves of savings in terms of cost environmental, marketing or regulatory. The above points are
expressed in a slightly different way (Satish Saini, 2004), where it is
and available renewable resources.
argued that the benefits of DSM to consumers, enterprises, utilities
and society can be realized through:
This will also lead to control of future carbon dioxide emissions and
hence sustainable economic development. Reductions in customer energy bills;
Reductions in the need for new power plant, transmission and
distribution networks;
the greenest unit of energy is the one saved rather than Stimulation of economic development;
the one used no matter how cleanly it is generated Creation of long-term jobs due to new innovations and
How governments intervene? technologies;
publicity and awareness campaigns Increases in the competitiveness of local enterprises;
 Reduction in air pollution; Reductions in peak power prices for electricity.
Reduced dependency on foreign energy sources;