The electric power system, being influenced by economic market
forces, is moved towards higher utilization. To maintain
reliability, system operators look towards non-traditional options;
i.e., beyond transmission and generation solutions. Demand-side
management (DSM) is emerging as a viable option with
significant technical and financial benefits derived from utilizing
various forms of demand-side control.
A recent power system event involved the usage of demand-side
control to regain reliable power system operation . DSM effectively
and quickly restored the power system from localized problems and
potential system-wide imbalance.
Demand-side control types in the North American electricity industry
can be categorized in the order of contribution to power system security
and electricity market efficiency as follows.
- Time of Use Pricing (TOU) – this approach shifts power
consumption from peak periods where the probability of high market
prices and transmission congestion are high.
- Real Time Pricing (RTP) – this demand-side control
strategy allows the load to reallocate energy utilization to lower
market price hours and when power transmission usage is lower.
- Demand-side Bidding – this category assists the system
operator in maintaining generation-load balance and in managing of
zonal congestion; tends to lower the operating cost of the consumer
and demand-side assists in alleviating generation resource shortage.
- DSM as Ancillary Service – DSM is utilized as system
reserve for emergencies especially when no other possible option
provides solution to mitigate existing system-wide operating
concerns. In this case, DSM can be called upon to support the system
operation as Responsive Reserve, Non-spinning Reserve, Regulating
Reserve, or as a Replacement Reserve. Most often, the demand is
reduced during periods of critical generation reserve margins and
when electricity market prices are high due to generation shortage.
- Direct Load Control – this strategy employs the usage of
automated controls to reduce or curtail demand consumption during
the occurrence of price spikes or during summer peak periods.
- Interruptible Load Program (ILP) – demand is reduced or
cut-off from the grid to maintain secured system operation during
emergencies where system continuous service can be put at risk.
System operators can utilize interruptible load for economic benefit
and eliminating system operating constraints.
The Demand for
Following are some reasons why there is a demand for DSM.
- Efficient Market Operation – Allowing for demand
elasticity in a locational marginal price (LMP) market results in a
more efficient market. Figure 1 below illustrates this concept.
1. Locational marginal price computation and adjustment due to
The figure gives us a higher LMP, P1, when demand is not taking
advantage of TOU or RTP. When demand-side utilizes TOU or RTP, the
LMP, P2, is “kicked” downwards as the demand curve shifts to the
- System-wide recovery – DSM as an ancillary service in the
form of interruptible load provides corrective and preventive action
to restore system-wide equilibrium. Figure 2 is an example of system
frequency response with and without utilizing demand-side control.
Figure 2. System
frequency plot with and without interruptible load.
- Solution to voltage problems – dynamic voltage support
can be derived from demand-side control. This is specifically more
valuable in areas where voltage is depressed and reactive power
compensation is lacking. Figure 3 presents the utilization of
interruptible load as voltage support.
As utilization increases, the electric power system needs all the
resources available to maintain reliable and secure operation.
Demand-side control provides an alternative to conventional system
resources in restoring power system frequency and in supporting voltage
recovery. Additionally, DSM helps in make electric markets more
efficient. The power system demands demand-side management for the many
benefits it has to offer.
- ERCOT Demand Response Program Helps Restore Frequency Following
Grid Event (on-line :
- “A Survey of Load Control Programs for Price and System
Stability”, P. Jazayeri, et al, IEEE Transactions on Power Systems,
Vol. 20, No. 3, August 2005
- “Classification of Control for Demand-side Participation”, Y. T.
Tan and D. S. Kirschen, Technical Report, 2007 (on-line :
- “Demand-Side View of Electricity Markets”, D. S. Kirschen, IEEE
Transactions on Power Systems, Vol. 18, No. 2, May 2003