Demand Response (ADR/DR)

Demand response (DR) systems massively contribute to shedding high power load by encouraging high energy consuming customers to reduce consumption during high electricity demands by incentives and compensation. During high demand periods (usually during summer), the consumers are asked to respond to demand signals i.e requests from utilities to decrease energy usage. METCO’s DR programs create a dynamic balance between supply from the electric grid, and end-user consumption erasing the necessity to activate harmful, non-renewable fossil fuel generation that is detrimental to the environment. Also, decreasing pressure on the power grid minimizes power outages. Clients are compensated to reduce power consumption. They may either transfer the load to a generator or remain on standby. As a utility consumer, it is crucial to understand DR to increase energy savings and cost while keeping the production rate high.


DR alters the energy consumption of utility consumers to balance the power demands with the corresponding limited supply. Power storage was not an option until recently, and therefore utilities minimize load by shifting to other energy sources onsite or offsite or by shutting down one or more generating units. DR programs provide industrial, residential and commercial consumers an opportunity to throttle their power usage during specific periods (e.g., peak hours) throughout the day when the electricity costs are high, and in emergencies (for instance, to prevent a blackout).

The objective of DR programs is to actively convert customers to modify power consumption as a response to demand signals. These decrease the high demands or avoid large-scale system emergencies. The program is known to be a highly cost-effective, efficient option over focusing on increasing of energy sources to meet the occasional demand spikes. The supply expectations need to reflect customer’s price signals or controls and allow dynamic alterations in usage. The rise of demand response programs is credited to the limited, costly options of adjusting supply to meet temporary peak demands as generating units are expensive to operate and maintain.

Basically, demand response is the economical-rationing method for the electricity supply. Utilities can accomplish this by offering compensation incentives and providing lower net unit cost in return for decreased energy consumption during the peak timing. This implies that the consumers that refuse to p decrease load despite signaling will be obligated to pay higher unit costs either directly or added into the standard rates.
There are three kinds of DR:

1. Emergency DR: This is to avoid involuntary service hindrances during the scarcity of supply.

2. Ancillary Services DR: Comprises of an array of specialty services required to ascertain the safe operation of the transmission grid that was conventionally supplied by generators.

3. Economic DR: The convenience to curtail usage when the generation or consumption of power has less value than paying for the electricity.

While DR generally indicates the mechanism of encouraging users to decrease demand to reduce peak demand for electrical power, very occasionally, the program may also be configured to increase load during periods of low demand and high generation. Hence, some DR systems might encourage arbitraging or energy conservation in between periods of high and low demand (or prices).

The transmission and power generation systems usually match and corresopond to the unforeseen events, forecasting error and peak demand. This lowers the peak demand variable and decreases the total cost of plant and capital required.


DR implementation is efficiently executed without impacting the overall production processes. It offers consumers a chance to have greater control over their power usage and operations of the power grid by transferring the load or decreasing the consumption of electricity during high consumption periods. This is in response to financial incentives such as time-based rates.
Electric system operators and planners are using DR programs to balance demand and supply which help decrease the prices of electrical power in wholesale and retail markets. Several methods can encourage consumer engagement in DR efforts, including time-based rates, for example, critical peak rebates, time-of-use pricing, variable peak pricing, critical peak pricing, and real-time pricing. Another method for DR is direct load control programs that provide energy companies the ability to turn water heaters and ACs on or off in return for price incentives and lower utility bills.
Units of power that are no longer needed are known as negawatt. These are collected by aggregators (companies that collect negawatts) and barter them with Independent System Operators (ISOs). These ISOs reduce the load by redirecting these units to the part of the grid that requires more power.
The utilities can signal the consumers in several ways such as off-peaking metering (cheaper power cost at certain times of the day) or smart metering (explicitly requesting consumers or communicating change in pricing).
When utilities anticipate and utilize bill credits, rate increments or other incentives to direct demand on the power grid during peak demands it is known as demand response event also known as ‘Peak hours,’ ‘peaks events,’ or ‘Conservation Events.’ Simply put, DR events are designated hours during which consumers are requested in advance to consume energy mindfully.


Voluntary rationing has proven to be an active customer strategy that produces greater energy usage awareness amongst customers, robustness with the energy provider, and load trimming. The consumer has the autonomy to control power demand by throttling some tasks which might need substantial electric power, or they may choose to pay more per unit for the utility. Another option for them is to partially switch production to alternate energy sources, e.g., on-site petrol/diesel generators. Small business proprietors and residents can register to reduce their utility bill by a free programmable thermostat that signals their appliances during peak demand to power down. In this way, the owners can save money while creating a more balanced and reliable grid. DR programs are designed to encourage change in behaviors through penalties or incentives. Consumers who positively respond to the requests during a conservation event are compensated with monetary rewards on the succeeding utility bill or may avoid paying high unit costs during DR events altogether. Utilities are actively assisting consumers in adjusting their power usage automatically during conservation events through the use of DR or demand control switches.


On the contrary, if voluntary rationing fails to decrease the load, involuntary rationing achieves the same but with limited control of the consumer, for instance, blackouts during periods of peak loads.


An example of involuntary energy rationing is load shedding. When voluntary ration does not balance the demand to correspond to the supply, total demand is lowered through cutting off power services to specific devices or areas or reducing the voltage supplied (brownouts). To avoid being controlled by service disruptions like widespread blackouts (power outages) or equipment damage, energy providers have the authority to implement load shedding through rolling blackouts or agreements with high-use industrial users to switch off equipment during widespread peak demands.


In the technological age, several types of demand response technologies have been designed to improve DR. These include software that helps to isolate or identify the areas of DR such as communicating requests to the customers, program compliance or load shedding requirements.


DR programs lead to several long-term benefits and payback for consumers, producers, and humanity, including:

By removing unnecessary energy consumption, DR systems allow smooth, efficient electricity utilization with minimum waste.


DR programs encourage cost-savings for the utilities by reducing peak demands and deferring the construction of power plants and delivery systems, especially those set aside for consumption during peak demand periods.


By emphasizing the optimal use of renewable energy, DR systems minimize the need for more power plants. The resulting energy conservation leads to fewer energy requirements and ultimately reduces the production of harmful gases and pollutants.


Smart DR technologies like home-area-networks or in-home displays make it easier for customers to reset their behavior and make better lifestyle choices. This reduces the peak period usage of using their power usage and prices.


Wi-fi induced technology allows sensors to automatically receive and transmit data from the consumer to central control systems on-site. This allows intelligent planning and immediate change response that eliminates any chance of overloading by utilizing automatic switching to redirect or decrease power usage strategically.

Why Choose METCO?

METCO is a dedicated energy services corporation that empowers a diverse array of energy consumers -including institutional, commercial and industrial- to contribute in DR programs. The company’s customers include municipal water treatment stations, manufacturing plants, retail stores, commercial buildings, data centers, pumping stations and distribution centers.
Their efficient DR programs cater to every client’s specific need enabling them to contribute to the environmental cause and creating substantial utility bill savings opportunities for them. All of METCO’s client-relationship is built on their team of expert engineers’ and consultants’ impeccable performance record and continuous consultation services that last for a lifetime.

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