Demand side management

1. Introduction

DSM are activities which occur between the chief public-service corporation of a state and its energy consumers or 3rd parties to happen options for increasing the efficiency of energy in assorted sectors of its economic system. Most energy efficient activities were really geared towards the supply side of energy ingestion nevertheless DSM is geared towards direction of energy demand to achieve an efficient degree of energy usage. It is a technique which we will be using to Electricity in the UK.

The UK has an already privatized electricity sector, where electricity is traded on a sweeping market by generators and distributers. The British Energy ( BE ) which is responsible for production of power in the state controls most of the state ‘s atomic power and about 20 % of its entire electricity supply. The UK electricity markets were officially separate stand alone markets, nevertheless the different markets – ( England, Northern Ireland, Scotland and Wales ) were integrated in 2001 ; the electricity providers still remain separate and this allows for unfastened competition amongst them. Each provider tries to offer better pricing constructions and particular offers to lure their consumers.

In the twelvemonth 2000, there were indicants of an energy spread in the state as respects its bring forthing capacity. This was because some of the coal fired Stationss coals were to shut down due to inability to run into the “requirements of the Large Combustion Plant Directive of the European Parliament and Council ( directing 2001/80/EC ) ” .

Besides, the one staying Magnox atomic Stationss will shut by 2015 ; they have extended the life of the UKs oldest AGR atomic station by 10 old ages and the others would most probably be extended to cut down the possible spread. A prognosis done in 2005 showed that if this spread is n’t filled, there would be a 20 % lack in capacity for coevals of electricity by 2015 in the UK. Because these projections, the UK has to look for alternate ways to stop up the spread by either switching to the usage of coal or gas or seek to pull off its energy every bit expeditiously as possible, through the usage of DSM techniques.

This paper seeks to turn to the most effectual DSM techniques which they can utilize to better its energy efficiency. Chapter 2 will speak by and large approximately DSM to give the reader indept cognition as to its significance, benefits and challenges. Chapter 3, the nucleus of the paper will give a brief penetration into the UKs Economy and do an analysis of its energy profile through the undermentioned methodological analysiss: Disaggregation, Energy Intensity, GDP Growth and Energy Savings. We would besides look at Electricity in the state under which we would make some analysis utilizing Disaggregation by sector and fuel type. We will so look at the current DSM techniques in the UK and its challenges ; so it will stop by looking at schemes which could better the energy efficiency of the state. This paper will so be concluded with the writer ‘s ideas.



DSM has been defined in different ways by assorted people and articles. Some definitions are:

  1. “DSM refers to cooperative activities between the public-service corporation and its clients ( sometimes 3rd parties ) to implement options for increasing the efficiency of energy use, with ensuing benefits to the client, public-service corporation and society as a whole.”2.
  2. “DSM is a tool that helps equilibrate supply and demand in electricity markets, to cut down monetary value volatility, addition system dependability and security, apologize investing in electricity supply substructure and to cut down GHG.”3
  3. For the intent of this paper, DSM is defined as activities that occur between the public-service corporation and its consumers or 3rd parties to look for assorted options or ways in which energy efficiency can be increased in an economic system with accent on demand side of energy ingestion of the state.

  4. International Institute for Energy Conservation ( IIEC ) , Demand Side Management Best Practices Guidebook for Pacific Island Power Utilities, prepared for South Pacific Applied Geosciences Commission ( SOPAC ) & A ; United Nations Department of Economic & A ; Social Affairs ( UNDESA ) at hypertext transfer protocol: // ( Last visited on 17th January 2010 )
  5. International Energy Agency, Technology Agreements – Demand Side Management at hypertext transfer protocol: // id_ia=8 ( Last visited on 4th December 2009 )

2.2 Benefits of DSM

Though DSM is a public-service corporation and client specific plan its benefits can be divided into 3 facets – Customer, Society and Utility Benefits

Customer Benefit

Society Benefit

Utility Benefit

Satisfy electricity demand

Reduce environmental debasement

Low cost of service

Reduce and Stabilize Cost

Conserve resources

Improve runing efficiency, flexibleness

Improve value of service

Protect planetary environment

Reduce capital demands

Maintain life style and productiveness

Maximize Customer public assistance

Improve client service

Table 1: “Benefits of DSM”4

Other benefits include:

  • Low cost of presenting energy to consumers by the usage of energy efficient contraptions.
  • DSM contributes to the development of a state ‘s economic system by supplying employment through capital reallocation to assorted undertakings.
  • Energy systems become more efficient through betterment in their coevals capacity.
  • Improvement in the quality of supply of power and besides its dependability through decrease in demand of distribution systems.

2.3 DSM Techniques

Major DSM techniques have been put up by public-service corporations or specific end-users. The public-service corporations aim is to force these users to alter their demand needs through assorted inducements like duty inducements which would harmonize consumers the option of repairing their energy demand activities at times when the cost will be reduced. This manner public-service corporation are able to switch demand from peak to off-peak periods. There could besides be some inducements which are negative ; like punishment charges for extended usage of inefficient contraption with high burden. This is aimed at forcing consumers to alter from inefficient to efficient contraptions to cut down demand.

Some DSM techniques which have been in usage in different states include:

  • Load Switch overing with night-time warming – Because base-load workss have low fringy costs ( megahertz ) , some states have started the usage of warming in the dark which has so far been successful.
  • Control of Direct Load – Deals with contraptions that can be put off or operated for short periods like air conditioners in places, warmers etc. Direct communicating between the public-service corporation and the consumer through the usage of power lines or signals from wirelesss allows the public-service corporation to turn off systems for short periods at different times. Consumers nevertheless, can turn on contraptions when non being controlled straight. Compensation to participants under this programme is in the signifier of a decrease in electricity measure.
  • Industrial and Commercial Activities – Programs for direction of extremum burden are used for consumers under these sectors. Like “load-interruptible programmes for the proviso of modesty services and heightening system reliability.”5 This is used as a support for the system in instances where there are breaks of power coevals or in the installations of the web. For the commercial sector, there are programmes in which the control systems of the edifices where they are situated are used like the warming and chilling system, illuming and infrigidation controls etc.
  • Demand Bidding – Here the client is ready to allow travel or cut down electricity ingestion at an in agreement monetary value. A engineering that can be used for this is thermoregulators, programmed for warming and air conditioning systems. It assumes assorted scenes at different monetary value degrees of electricity and can alter with season.
  • Smart Metering and contraptions – In order to expeditiously portion DSM resources, some sort of real-time pricing activity is needed to introduce consumers of the benefits of electricity at every topographic point and clip. Some consumers have already found a manner to associate the monetary value of their electricity to its direction system. High differences in monetary value between different periods can really do big motions in the usage of energy. This should besides be followed by an contraption that will advance the usage of a DSM programme.
  • 5 Elservier, eds Strbac Goran, Dept of Electrical and Electrical Engineering, Imperial College London, South Kensington Campus, London, Energy Policy 36 ( 2008 ) 4419-4426 at hypertext transfer protocol: // ( Last visited on 17th January 2010 )
  • The usage of smart metres in places are really good ways to accomplish this. Smart metering is an electrical metre that locates ingestion in a elaborate mode than the normal metre being used soon. It besides transmits the information it receives via a web to the public-service corporation for charge and cheques.
  • Pricing by clip of usage ( TOU ) – TOU shows the cost construction of puting and bring forthing that is high rates during extremum and low rates during off-peak periods. Largely used by families with electric warming.

2.4 Stairss for DSM Implementation

6 see ibid note2

  • Load Research: General cheque of the duty, clients and burden profile to enable easy designation of parts that make up the burden form.
  • Define Load-Shape Aims: This measure works based on information gotten from the burden research. The purposes are stated by people called DSM Engineers. These purposes are of different types as shown in the figure below.
  • Assess schemes for execution of the programme: Used to find consumers merchandises that can be aimed at cut downing peak demand particularly in those sectors that have high supports. In this measure, a cost-benefit analysis ( CBA ) is done for the public-service corporation, consumers, environments and society likewise.
  • Execution: Program here is designed for specific consumers and is besides advertised to its mark market.
  • Evaluation and Monitoring: Here, the full programme is monitored and analyzed based on the expected end fixed by the public-service corporation. Costss like the cost of avoiding supply, cost of the programme to the public-service corporation and consumers every bit good as the benefits to all participants are all analyzed through CBA.

2.4 Challenges for DSM

DSM constructs are really non new and its engineerings have already been developed ; nevertheless its start up has been traveling really slow due to assorted challenges like:

  • Lack of equal Infrastructure for ICT- For DSM to be implemented, distribution of detectors and control devices is required ; this has to be accompanied by more complicated maps for trading and metering of energy which will necessitate the dispatching of information and communicating systems for generator, burden and other web controls. In general, the equipment needed to power these machines are sophisticated and the experience unavailable.
  • Small apprehension of the benefits of the solutions of DSM – A batch of work is still required in the country of repair of methodological analysiss for CBA of DSM techniques.
  • Solutions based on DSM seem to increase the operation complexnesss of the system when compared to conventional solutions – DSM is expected to go really competitory reasonably shortly as the flexibleness of a system can now be used as a major tool for managing unsure developments in the hereafter ; besides the cost of DSM engineerings are now cut downing which will besides increase its fight.
  • Same DSM based solutions do non command every bit much competition as other conventional solutions – Performance of the already bing and approaching DSM attacks has to be good appraised. This gives a clear comparism between the DSM and the conventional attacks.


3.1. UK Economy and Energy Profile

The UK is a major developed capitalist economic system. It has the 3rd largest economic system in Europe after Germany and France in nominal footings and besides the 3rd after Germany and Russia in footings of buying power para ( PPP ) . It is presently the 6th largest in the universe as respects nominal GDP and the 7th largest by PPP.

Some of the states statistics are:




$ 2,674Bn ( 2008 est nom )

GDP Growth

-0.4 % ( Q3 2009 ) and -5.2 % ( Oct 2008 to Sept 2009 )

GDP Per capita

$ 43,785 ( 2008 est. Nom )


14 % with household income below 60 % of UK average income ( 2006 est )



$ 442.2Bn ( 2007 est )

Main Export spouses

USA 15 % , Germany 11 % , France 10 % , Ireland 7 % , Netherlands 6 % , Belgium 6 % , Spain 5 % , Italy 4 % ( 2007 )


$ 621.4Bn ( 2007 est )

Main Import Partners

Germany 14.2 % . US 8.6 % , China 7.3 % , Netherlands 7.3 % , France 6.9 % , Belgium 4.7 % . Norway 4.7 % , Italy 4.2 % ( 2007 )

Beginning Datas: “CIA World Fact Book”8

Table 2: UK Data Statisticss

Within the EU, the UK has the largest oil and natural gas. It was a major net exporter of both fuels before it became net importers of gas in 2004 and hopes to go net importers of oil excessively by the terminal of the decennary. Over the past few old ages, production of UK oil and gas has been steadily worsening because the find of new militias has non been commensurate with bing Fieldss acquiring matured. Based on this, the authorities have now been forced to look for ways to pull off this diminution. They have come up with a 3-angled program to turn to these lacks which are:

  • Increase domestic production of oil through additions from efficiency and development of fringy Fieldss.
  • Establish needed import substructure like LNG terminuss and multinational grapevines
  • Invest to a great extent in energy preservation and renewable
  • 8 Cardinal Intelligence Agency, The World Fact Book – United Kingdom at hypertext transfer protocol: // ( Last visited on 14th January 2010 )

The following parts of the paper will utilize assorted tools to analyse the UK ‘s energy constituents and its economic system. It will demo us in clear footings how good the economic system is making, how good its energy beginnings are being utilised and energy ingestion degree.

3.1.1 Energy Mix Disaggregation by Fuel Type

The UKs energy constituents have been clearly shown in the undermentioned chart at disaggregated degrees:

The graph shows that the UKs Energy profile consists largely of Petroleum, followed by Natural Gas and Electricity. The chief beginning of energy antecedently was majorly crude oil nevertheless, because of the diminution in oil, the state is now looking at alternate beginnings of energy for its general usage.

3.1.2 Gross Domestic Product ( GDP ) Growth

The undermentioned chart shows the state ‘s GDP Growth tendency over 20 old ages 1980 – 2008. It was based on the state ‘s Buying Power Parity in dollar

3.1.3 Energy Intensity ( EI )

EI gives us one indicant of how efficient the states energy is used. It is gotten from the Total Energy Consumption of the state by its GDP. i.e.

EI = Total Final Consumption

GDP ( The lower the EI of a state, the more efficient it is. )

It can be seen that the EI of the UK was cut downing on the norm during the period, hence based on the chart, it can be said the state ‘s energy was being expeditiously utilized.

3.1.4 Forecasting – Energy Savingss

Based on the information available, we want to see how much of the state ‘s energy is being saved utilizing the undermentioned stairss.

Using the past 10 old ages from 1997 – 2007, get the mean growing rate utilizing the expression

?g = { ET1 } ^1/ ( T1-T0 ) – 1


?g = Average growing ; ET1 = Energy demand for twelvemonth T1 ; ET0 = Energy demand for twelvemonth T0 ; T1 = Present twelvemonth ; T0 = Previous twelvemonth

Extrapolate for the following 10 old ages from 1998 – 2018 utilizing the undermentioned expression:

ET1 ( 1+r )

ET1 = Energy demand for present twelvemonth

R = mean growing rate

Assume 5 different scenarios to see the best manner in which the UKs Energy Consumption ( EC ) can be expeditiously managed utilizing the expression: EC = GDP x EI

The scenarios being –

  • Business As Usual ( BAU )
  • High GDP, EI Constant
  • Low GDP, EI Constant
  • High EI, GDP Constant
  • Low EI, GDP Constant

3.2 Electricity in the UK

Coevals of Electricity screens about 30 % of CO2 Emissions in the UK. So far the state has been dependant on assorted energy beginnings for production of electricity which were made up of conventional thermic workss for Natural Gas, Oil, Coal and Others. These 30 workss of approximately 1GW power cater for the demand of electricity which stood at about 40GW and 60GW during on and off extremum severally. The closing down of the atomic and coal workss as mentioned in the debut will do a spread in the demand for electricity of about 15GW by the twelvemonth 2015. So far the state has already started taking stairss to make full this spread like, buildings of some power Stationss that will be run by gas by Centrica and besides they are looking at building others Stationss fired by coal in Kent.

Other options for stop uping the spread include the usage of Fossil fuels, cogeneration, community energy systems, and renewable energy amongst others.

3.2.1 Electricity Disaggregation by Fuel Source

The 2 graphs show the energy beginnings that produce electricity in the UK between the periods 1980 – 2007. Both graphs show that the major beginnings were coal, gas and atomic. The usage of gas started grew drastically by 76 % in 1996 and much more growing is anticipated.

3.2.2 Electricity Disaggregation by Sector

Majority of electricity consumed in the UK economic system is consumed by the Residential, Industrial and Commercial Sector. Find below charts demoing this both in % parts and nominal values.

We will be concentrating on the Residential Sector and seek to see how best the energy efficiency in this sector can be improved utilizing DSM schemes. As at 2007, the Residential sector was devouring approximately 34 % of entire Electricity consumed by all sectors. This sector is one of the chief jobs which is impacting the accomplishment of C marks decrease in the state. It presently accounts for approximately 30 % of CO2 emanations and this is expected to travel up by another 18 % by the twelvemonth 2010 and beyond. There is a great potency to cut down energy demanded by this sector through DSM techniques. This we will discourse in item in the latter portion of this paper.

3.3 DSM in the UKs Residential Sector.

A study was done in 30homes in the UK – some being places of households with kids and those without. The thought was to place energy ingestion, burden factors, peak demand, mean burden and demand continuance all at a peculiar clip of twenty-four hours. The consequences was that the chief factor that really affects demand of electricity in places are – the figure of residents and income of the family. The contraptions within a place are the chief things that influence the energy demand in them for illustration, a icebox that works for 24 hours would utilize up more electricity than an Fe which is merely used for a short clip.

Based on all the above, the UK has been able to come up with the usage of some DSM Programmes which have been successfully applied so far like:

  • Night-time warming with burden exchanging
  • Coincidence and Avoidance of Peak Load
  • Avoidance of extremum burden by the usage of thermic storage
  • Integrated controls
  • Off-peak shift of storage warmers
  • Use of smart metering

3.4 Challenges

Although DSM is being used in the UK, there are still some challenges which the state is confronting which have prevented them from achieving a more efficient energy degree than they are at right now like:

  • Strong cognition lack amongst the electricity consumers about the importance of energy preservation
  • Challenge of retro-fitting old places which costs more than constructing new 1s. There is a policy in the UK for conserving old edifices to keep their.
  • Regulative policies of the state which is largely geared towards publicity of competition within the electricity industry.

These challenges are non really much so it is believed that the state could use more DSM schemes to be able to better its energy efficiency in its Residential Sector. The following portion will look at proposed schemes which can assist accomplish this.

3.5 Proposed Schemes

DSM though being applied in the UKs Residential Sector could really be improved. Lots of energy nest eggs schemes have been proposed by assorted agencies. These have been divided into assorted agencies – by their payback clip and others.

Pay-back clip actions

No-cost actions

Short pay-back clip action

Medium pay-back clip steps

Long payback clip steps ( when edifice )

Thermostats that are turned down by merely 1?C could cut down measures for warming by a whole 7 %

All equipments like visible radiation, warming, air conditioning should be programmed to work merely when needed

Efficient contraptions should take the topographic point of old inefficient 1s

Put option in heating that makes usage of boilers with extremely efficient capacitors

Turn off all contraptions and visible radiations that are non required

Tanks and pipes for hot H2O should be insulated

Change the manner Windowss are designed.

Use insularities outside the house. It reduces losingss on thermic Bridgess.

Turn off all contraptions with base by maps

Audited accounts of energy should be done by public-service corporations to acquire the ultimate duty.

Change in equipment usage that are of low precedence can impact peak demand

Insulation inside the house could besides be used

Temperature of hot H2O should be turned down

Efficient Windowss should take the topographic point of ill insulated Windowss

Use driers and rinsing machines at full burden and low temperatures

Table 3: “DSM Pay-back clip actions”9

9 Infield.D.G. , Short.J, Horne.C. and Freris.L.L. , Potential for Domestic Dynamic Demand Side Management in the UK at hypertext transfer protocol: // arnumber=04275305 ( Last visited on the 20th January 2010 )

Other DSM schemes that can better the energy efficiency in the UK are:

  • Use smart stoppers to command the base burden of contraptions in the place.
  • Use of the “Grid Friendly Controller”10. A device which would command casting of burden when there is high emphasis degree on the power system.
  • Electric warmers in contraptions should be fixed in a burden antiphonal mode.
  • Use of techniques for thermic storage.
  • Make more usage of gas-fired options of heating alternatively of utilizing electricity option.
  • Demand and supply balance could be achieved through recurrent renewables.

These schemes amongst others are already being used in some states and could be applied in the UK. Besides based on the prognosis done in the old chapter, the UK could besides look at… … … … … … … … … … … … … .


DSM depends on two facts – consumer behavior and engineering. For efficient systems to be achieved, these factors must be good cultivated and developed. It is non merely a good step of energy nest eggs but besides contributes to the entire comfort of the consumers.

This paper has highlighted everything that needs to be known as respects DSM in the UKs Residential sector with specific accent on Electricity. We have analyzed in item the assorted beginnings of electricity and seen how much electricity is used up by the Residential Sector of the economic system.

From the analysis, we can see that there is a great potency for betterment of energy efficiency in the state utilizing the schemes stated above. Even with the challenges being faced there is still room for betterment.

Based on the above, we can so by and large say that there is room for betterment in the energy efficiency of the United Kingdom ‘s residential sector utilizing clearly stated and planned Demand Side Management schemes


Primary Beginnings

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