Advanced ICT solutions are increasing the potential for active demand response from all consumers regardless of their size.
Thanks to advanced information and communications technologies (ICTs), energy consumers are acquiring an increasingly active role in today's energy system. This includes small (household) consumers.
The potential for demand response and power generation from small decentralised generation units (such as solar panels on rooftops) gives household consumers a chance to participate more actively in the electricity market. Their flexibility helps maintain reliable operation of the power system.
Reducing consumption is just one of the types of demand response.
When talking about demand response, the first thing that comes to mind is lower consumption. This is helpful when the demand for electricity in the system is high or when production is low, e.g. at the times of peak loads. However, reducing consumption is just one of the types of flexibility that household consumers can offer.
Consumers may adjust their demand in various ways:
- by reducing consumption: This is helpful when the demand for power in the system exceeds the supply. This type of demand response is usually pre-arranged between the power supplier and the consumer (or groups of consumers). By signing a contract, the latter agree to be ready to adjust/lower their power requirements in exchange for financial benefits, i.e. paying a lower price for the power consumed.
- by increasing consumption: Consumers may be ready to increase consumption when too much electricity is generated in the system. Oversupply can be a result of a sudden increase in the performance of the power plants running on variable energy sources such as solar or wind.
- by shifting consumption to off-peak periods: Consumers may be ready to shift their demand for power to an earlier or later time when their requirements don’t need to be met at a specific point in time. Shifts in consumption are usually made possible by energy storage technologies or back-up generation.
- by storing electricity: In critical moments when the system is over- or under-supplied, consumers may fulfil their power requirements by using their own electricity stored in a battery or any other energy storage system. This relieves the grid and contributes to its stability.
- by generating electricity in small, decentralised generation units (also known as self-supply): Consumers can use small generation units such as solar PV panels on rooftops for self-supply during peak load periods, when electricity prices are high or electricity is scarce.