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New & Renewable Energy Development Corporation of Andhra Pradesh Ltd.,

(A State Govt. Company)

(Formerly Non-Conventional Energy Development Corporation of Andhra Pradesh Ltd.,)

Demand Side Management

New & Renewable Energy Development Corporation of Andhra Pradesh Ltd.

Demand Side Management

The energy sector world-wide is going through vast changes through deregulation, which is opening up a wide new market based on the real time parameters of supply and demand. This sector no longer remains a business of plants and wires only. The electrical technology in the deregulated market is entirely different from the traditional market. It constitutes a number of different generators, suppliers, regulators, distributors and consumers fed through a vast transmission and distribution network. The market price of electricity is a fluctuating one, which keeps on varying from time to time and hour-to-hour depending upon the available supply and the system demand on real time basis. When the supply shortage is there, the system reliability is at stake and also it leads to high rising prices due to low supply as compared to high demand.

Today's market has two main components for its successful operation:

  • Technical – related to supply reliability
  • Economic – related to affordable and stable electricity prices.

So to make a successful deregulated market, both factors play an equal and significant role. Technically, system reliability should be maintained at any cost to avoid blackouts and economically, the market price should be kept affordable and stable at all times. So ultimately it is a business of balancing supply and demand on a real time basis through innovative technologies and economic methods.

DSM's role

A balance between supply and demand is needed at all times to ensure a stable and reliable market. This can be achieved in two ways, either by Supply-side Management by adding additional supply when demand is high or by Demand-Side Management (DSM) by curtailing the system demand when supply availability is less. For short term measures, supply-side management is not effective as it takes a long time for units to start up (if these are available) and meet the rising demand, rather it is demand-side management which can be implemented immediately and in more economic ways to keep the balance.

Moreover it is mentioned, “Electricity saved is worth more than the electricity generated”. One unit saved at the consumer end is worth 1.10 units saved at the generator end, taking into account the long transmission and distribution losses. Every technology and program needs a program platform for its performance. A deregulated market is the major platform to promote such programs like DSM because of the nature of this market structure, demanding a strong balance between supply and demand on a real time basis. DSM through it other tools like Demand/Load response Programs and Real Time Prices/Time-of-Use rates have the capacity to create this balance more efficiently and timely rather than supply side management. In addition, environmental concerns like reducing greenhouse gas emissions, saving natural resources and protecting the environment is a matter of big concern these days as most of our electricity generation plants are the major sources of environmental pollution. DSM also has the capacity to meet our environmental protection goals.

Benefits of DSM

The various benefits of DSM to consumers, enterprises, utilities, and society are:

  • Reduction in customer energy bills
  • Reduction in heavy investments in new power plants, transmission, and distribution network
  • Reduction in grid congestion
  • Simulation of economic development
  • Creation of long-term jobs due to new innovations and technologies
  • Increase in the competitiveness of local enterprises
  • Reduction in air pollution
  • Preservation of our natural resources
  • Reduction in dependency on foreign energy sources
  • * Reduction in high prices of electricity leading to stable electricity market.