Demand Side Management/ Energy Demand Management

METCO’s demand-side management (DSM) services produce reliable and financially sound operations while sustaining the power system’s operative integrity. DSM also evaluates and determines the most efficient strategies to reduce energy consumption, for instance, moving from one rate schedule or shifting from high-peak usage to off-peak intervals. As the surcharges on electric utilities vary from hourly to monthly, it can be decreased or entirely eradicated by identifying the duration and source of the peak demand consumption. DSM, in some cases, is used to reduce non-critical loads during circumstances where high electrical demand can result in an increase in the electrical utility cost and diminish the operating surplus of your business.


DSM, also known as energy demand management or demand-side response (DSR) is the curtailing of the client’s energy demand by numerous strategies, including behavioral changes (through awareness) and financial benefits. The objective of DSM is to inhibit consumers from depleting less energy during the peak time frame or from shifting the energy use to an off-peak time frame such as weekends or nighttime. This does not necessarily reduce overall energy usage. On the contrary, it focuses on reducing the need for investing in power plants or networks excessively for meeting the optimal demands, for example, conserving the energy storage during off-peak hours and discharging it during peak hours. The latest strategy of DSM to overcome power consumption is to assist the grid operators in stabilizing intermittent generation from solar and wind sources, especially when the amount and timing of energy demand do not coincide with the renewable energy production.
There are four types of DSM

1. Energy Efficiency:

This is a type of DSM where we use less power to carry out the same tasks, including a permanent demand reduction by replacing equipment with more efficient ones.

2. Demand response:

This encompasses any preventive or reactive strategies to decrease or shift the demand. Demand response (DR) programs not only focus on reducing the peak consumption to defer high supply cost but also aid in altering the net load structure -which is wind and solar power production subtracted from the total load- while integrating all variations of renewable energy. DR includes all purposeful variations applied on the electricity consumption trends of the utility consumer that are intended to change the timing, the total power consumption, or the intensity of spontaneous demand. DR strategies include a range of actions carried out on the client’s end of the electric meter during high charges or congestion of peak period network.

3. Dynamic demand:

Dynamic demand is the delaying of operating cycles of equipment by a few seconds to induce diversification of load sets. The idea of dynamic demand is to monitor the power factor of the electric grid in addition to their parameters, loads administered individually at intermittently during peak periods to stabilize the total system load with production, decreasing serious power disorder. The end user, i.e., the client, has negligible effects as the delay in the operating cycle is only by a few seconds.

4. Distributed Energy Resources (DER):

the on-site generation (OSG), distributed energy and generation, and decentralized/district energy is electrical production and conservation achieved by various small devices that are linked to the grid known as DER. Unlike large renewable power stations, DER is more decentralized, flexible, and within close proximity of the load. However, they tend to carry a capacity of not more than 10 MW. The DER can be controlled and coordinated using an interface within a smart electric grid. The dispersed storage and generation allow accumulation of power from various sources that could decrease the environmental changes and improve the safety of production.

Furthermore, DSM can be categorized into scales of implementation:

  • National Scale: Improving energy efficiency is as significant as DSM strategies. The legislation and standards in various areas, including machinery, housing, transport, building, and appliances can improve efficiency nationally.
  • Utility-scale: When the demand is at its peak, utilities can control the storage water heaters, air conditioners, and pool pumps in large regions to stabilize the energy demand with supply.
  • Community-scale: This is also known as district/precinct/ neighborhood scale. In regions of extreme winter or summer, central heating/cooling systems have been used to manage the peak load. Another way to implement DSM on a communal scale is accomplishing Net Zero Building or community.
  • Individual household/Personal Business scale: PV systems installed by METCO’s experts are one way to apply DSM on an individual level. The utility of solar energy allows the reduction of energy consumption from the electric grid. Systematic DSM approaches such as energy efficiency measures, storage water heaters, PV operations, air conditioner, building performance, and energy storage systems are practical household/business level strategies.


Demand side management is a crucial process to reduce electricity consumption, especially when the usage is at its peak. A high requirement of electricity does not only increase the electricity cost but also causes power outages by putting pressure on the electricity grid. By load reduction during peak hours, the grid is stabilized, and usage of costly fossil fuels is minimized that could result in damage to the environment. The objective of DSM programs include investing energy efficiently and time-variant costing (e.g., time-of-use rates). Three strategies of demand side are:

1. Contractual Demand Response:

This is a type of response that compensates for electricity consumption reduction of big power consumers during peak consumption periods. During peak usage of electricity, contractual demand response alters the amount of power consumed by a client to complement the demand with the supply. Previously, this was done by reducing production rate and turning generators on/off or outsourcing power. Failure to keep a balance between the electricity consumption and supply can cause the electric grid to incur sharp voltage fluctuations and instability resulting in crashes in the grid. Hence, the overall production capacity is calculated to correspond to the overall peak demand allowing a margin for some error and contingencies e.g., shutting off plants during the maximum demand period. METCO’s core demand response strategy focuses on using the least expensive production capacity (concerning marginal cost) at any given time while opting for additional capacity from more costly plants during peak demand. The primary purpose of demand response is to reduce the high energy demand to decrease the potential risk of disturbances, overcome any requirement for the extra capital cost for more plants and avoid utilizing less efficient or more expensive operating plants. The clients will have to pay more if the generation capacity is fueled by a pricier source of power production.
In most cases, increasing supply to meet the demands can result in higher costs because some units can take longer to function at full capacity and others can be expensive to operate. METCO applies demand response to adjust the client’s power demands with the supply. Signaling of demand requests to customers by the utilities is done in a variety of ways such as smart metering or off-peak metering. Smart metering encompasses the requests communicated by utilities to the customers, whereas in off-peak metering the power cost varies at a specific time throughout the day. The customers have the option to either postpone projects requiring high power or provide higher electricity cost. The client also has the opportunity to use alternate sources like diesel generators on-site.

2. Smart Grid Application:

These applications increase the ability of electric utility producers and their consumers to coordinate better with one another to make more informed and effective decisions on efficient electrical power production and consumption (supply and demand) strategies. METCO achieves this by allowing the client to actively shift to a 24/7-based approach to demand response instead of event-based. This means that rather than the utilities controlling load shedding, the client can control the load all the time. This accelerated two-way communication allows higher demand response opportunities.
A benefit of using this application is the time-based pricing system. Our clients can decide their threshold and set their consumption rate to make the most of the fluctuating cost. By using smart grid application, clients can monitor, switch, and stabilize the load to retain the peak load. The intelligent grid application provides real-time information to the client and producers. However, the main driving factors are environmental and economic incentives.

3. Managing Total Demand:

behavioral alterations for energy consumption can have a significant effect on the client’s utility bill. Incorporating slightest changes in the production process can result in higher efficiency and savings. Curbing non-critical energy consumption e.g., HVAC or constant performance maintenance of your equipment could encourage substantial cuts on electricity cost. METCO’s professionals make sure to sync with your utility to comprehend your monthly demand cost.


METCO’s energy savings programs have allowed efficient solutions that have provided an optimum result, including DSM. The benefits of using our DSM services include:
Sustainable Energy Conservation

Demand side management enables the client to maintain and curtail their energy requirements and consumption in a more efficient and eco-friendly manner.

Utility Cost Savings

Demand side management allows our clients to save considerable sums of their capital on utility bills without having to cut back on their production output or routine operations. It is beneficial for the company owners and the community by cutting down operating costs and reducing carbon footprint by decreasing the need for power plants, respectively.

Reduction of Fossil Fuel Consumption

By making operations and production processes more efficient, demand-side management programs reduce fossil fuel combustion and the need to build expensive power plants.

Provides Autonomy to Consumer

Distributed Generation units harness otherwise wasted energy to produce electricity. The line loss is eliminated as DG is an onsite plant that does not require transmission wires.

Why Choose METCO?

Since its inception, METCO has conserved more than 23000 kV of energy through various energy programs, including demand-side management. Our group of expert engineers and consultants t are inclined to offer you innovative, state-of-the-art DSM services that can help you save power and finances. By availing our services, our clients have been able to maximize their return on investments and minimize the operating expenditure. If you are looking to implement a demand response program, METCO can design one that is efficient and effective, and tailored to meet your business needs.

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