Demand Response: The State of the Market
Utilities carefully manage the electricity supply to ensure that they can meet customer demand on the grid. Demand response programs can help balance supply and demand by encouraging customers to curtail usage during times of high demand.
Demand response began as a way to help utilities and grid operators meet large peaks cost-effectively on a few of the hottest summer and coldest winter days. Today, demand response helps these parties deal with four additional challenges:
The need to forestall building more power plants as demand rises.
More intermittent renewable energy resources connecting to the grid.
Old power plants being retired.
Increasing transmission congestion.
With these changes, there are now two major categories of demand response programs: emergency response and price response. In addition, new demand response programs are emerging to address and support the transmission of electric power from seller to purchaser – a concept called ancillary services.
A “Demand Response Market Overview” from the Institute for Building Efficiency explores how demand response programs have developed to date and how they may evolve in the future.
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