What Is Energy Demand Management?

Mary McMahon
Mary McMahon

Energy demand management is the utilization of measures to control consumer demand for energy to reduce strain on supplies. From the perspective of utilities, it makes control of the energy distribution network much easier, and can reduce the risk of blackouts and other adverse events. It also has the benefit of being environmentally friendly by lowering the overall need for energy, and reducing demand on prospective energy sources. Numerous parties can be involved in energy demand management.

Encouraging consumers to use energy efficient CFL light bulbs is one way to help manage energy demand.
Encouraging consumers to use energy efficient CFL light bulbs is one way to help manage energy demand.

Many utilities have incentive programs that reward customers for using less power. These can include tiered pricing structures that offer low prices for usage below baseline, as well as time of use meters that charge less for off-peak usage. Punishments, like high fees for energy about baseline, are also a tactic. Utilities can also provide energy audits to show consumers where waste occurs and how to limit it. The utility may save money in the long term by providing weatherstripping and other basic efficiency measures to customers to get them to cut down on their energy use.

Government agencies can also be involved in energy demand management. Their work can include subsidies for low-energy appliances and solar panels, as well as consumer outreach and education. Some partner with utilities to provide free audits to customers and may offer supplies to help people reduce energy use, like efficient light bulbs. Education programs can also focus on topics like turning off unnecessary equipment.

Companies with high energy needs can present challenges to energy demand management. Factories, for instance, need to be able to run their equipment. They may work with utilities to increase efficiency as much as possible, and could also participate in their own energy generation and storage to reduce their load on the main grid. Cutting down on demands from industry can reduce strain on the grid, particularly in peak hours or periods of strain like heat waves, where numerous facilities run air conditioners.

Utilities use energy demand management to limit the risks of rolling blackouts and other measures where they must throttle supply. By focusing on the demand side of the equation, they can attempt to meet all energy demands by lowering them to be within the capacity of the grid. Energy demand management may also extend the time between upgrades and additions of new facilities by slowing the growth of power consumption and allowing utilities to conserve funds until they are truly needed.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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