Demand Response

Demand Response (DR) is the term used to identify utility actions during times of peak demand. There are two options: either increase supply (by turning on additional generation) or reduce demand. One of the primary goals of a Smart Grid network is to help utilities implement demand response programs to reduce or shift peak demand load through consumer incentives and direct load curtailment.

Some demand response programs fall under the category of dynamic pricing, which sets peak/off-peak pricing tiers to provide consumers with an economic incentive to shift their energy consumption to off-peak hours.

Demand response can also provide utility-managed direct load control programs in which consumers, typically industrial and commercial enterprises, opt-in to a program in which the utility can curtail power during emergency supply conditions to avoid outages. With a two-way Smart Grid network, these types of peak-shaving demand response programs are being extended to residential consumers as well to curtail power of pool pumps, thermostats, air conditioners, and other devices.

A high-capacity Smart Grid network provides utilities with the means to implement demand response programs.