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Here is a compilation of essays on ‘Demand Side Management (DSM)’ for class 8, 9, 10, 11 and 12. Find paragraphs, long and short essays on ‘Demand Side Management (DSM)’ especially written for school and college students.
Essay on Demand Side Management
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Essay Contents:
- Essay on the Introduction to Demand Side Management
- Essay on the Need and Objectives of Demand Side Management
- Essay on the Planning and Implementation of Demand Side Management Programmes
- Essay on the Technology Options for Demand Side Management
- Essay on the Design Guidelines for Demand Side Management Programme
- Essay on the Benefits of Demand Side Management
Essay # 1. Introduction to Demand Side Management (DSM):
Demand side management is used to describe the actions of a utility, beyond the customer’s meter, with the objective of altering the end-use of electricity – whether it be to increase demand, decrease it, shift it between high and low peak periods, or manage it when there are intermittent load demands – in the overall interests of reducing utility costs. In other words DSM is the implementation of those measures that help the customers to use electricity more efficiency and it doing so reduce the customers to use the utility costs.
DSM can be achieved through:
i. Improving the efficiency of various end-users through better housekeeping correcting energy leakages, system conversion losses, etc.
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ii. Developing and promoting energy efficient technologies, and
iii. Demand management through adopting soft options like higher prices during peak hours, concessional rates during off-peak hour’s seasonal tariffs, interruptible tariffs, etc.
DSM, in a wider definition, also includes options such as renewable energy systems, combined heat and power systems, independent power purchase, etc., that utility to meet the customer’s demand at the lowest possible cost.
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Essay # 2. Need and Objectives of Demand Side Management:
Demand side management (DSM), is the modification of consumer demand for energy through various methods such as financial incentives and education. Usually, the goal of demand side management is to encourage the consumer to use less energy during peak hours, or to move the time of energy use to off-peak times such as night-time and weekends.
Peak demand management does not necessarily decrease total energy consumption, but could be expected to reduce the need for investments in networks and/or power plants. The term DSM was coined during the time of the 1973 energy crisis and 1979 energy crisis.
Electricity use can vary dramatically on short and medium time frames and the pricing system may not reflect the instantaneous cost as additional higher-cost (‘peaking’) sources are brought on-line. In addition, the capacity or willingness of electricity consumers to adjust to prices by altering demand (elasticity of demand) may be low, particularly over short time frames. In many markets, consumers (particularly retail customers) do not face real-time pricing at all, but pay rates based on average annual costs or other constructed prices.
Various market failures rule out an ideal result. One is that suppliers’ costs do not include all damages and risks of their activities. External costs are incurred by others directly or by damage to the environment and are known as externalities.
Theoretically the best approach would be to add external costs to the direct costs of the supplier as a tax (internalization of external costs). Another possibility (referred to as the second-best approach in the theory of taxation) is to intervene on the demand side by some kind of rebate.
Energy demand management activities should bring the demand and supply closer to a perceived optimum. Governments of many countries mandated performance of various programs for demand management after the 1973 energy crisis.
Demand for any commodity can be modified by actions of market players and government (regulation and taxation). Energy demand management implies actions that influence demand for energy. DSM is originally adopted in energy; today DSM is applied widely to utility including water and gas as well.
Reducing energy demand is contrary to what both energy suppliers and governments have been doing during most of the modern industrial history. Whereas real prices of various energy forms have been decreasing during most of the industrial era, due to economies of scale and technology, the expectation for the future is the opposite.
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Previously, it was not unreasonable to promote energy use as more copious and cheaper energy sources could be anticipated in the future or the supplier had installed excess capacity that would be made more profitable by increased consumption.
In centrally planned economies subsidizing energy was one of the main economic development tools. Subsidies to the energy supply industry are still common in some countries. Contrary to the historical situation, energy prices and availability are expected to deteriorate. Governments and other public sectors, if not the energy suppliers themselves, are tending to employ energy demand measures that will increase the efficiency of energy consumption.
One of the main goals of demand side management is to be able to charge the consumer based on the true price of the utilities at that time. If consumers could be charged less for using electricity during off-peak hours, and more during peak hours, then supply and demand would theoretically encourage the consumer to use less electricity during peak hours, thus achieving the main goal of demand side management.
Hence we can say that DSM (Demand Side Management) is planning, implementation and evaluation of utility activities designed to encourage customers to modify their electricity consumption pattern, both with respect to the timing and level of demand (kW) and energy (kWh).
Essay # 3. Planning and Implementation of Demand Side Management Programmes:
DSM programs are utility and customer specific.
The various steps involved in implementing a DSM programme are as follows:
Step 1. Load research.
Step 2. Define load shape objectives.
Step 3. Assess program implementation strategy.
Step 4. Implementation.
Step 5. Monitoring and evaluation.
The description of these steps is as follows:
Step 1. Load research:
This stage in the DSM implementation will typically assess the customer base, tariff, load profile on an hourly basis and will identify the sectors contributing to the load shape. This step will also identify the tariff classes in the utility, current recovery from different sectors and current subsidy offered to different sectors.
Step 2. Define load shape objectives:
Based on the results of the load research in the utility, DSM engineers will define the load shape objectives for the current situation. Various load-shape objectives – Peak clipping (reduction in the peak demand), Valley filling (increased demand at off-peak), Load shifting (demand shifting to non-peak period), and Load building (increased demand) are possible.
These are represented in Fig. 3.14.
Specific descriptions of load-shape objectives are as follows:
i. Peak clipping
The reduction of utility load primarily during periods of peak demand.
ii. Valley-filling
The improvement of system load factor by building load in off-peak periods.
iii. Load shifting:
the reduction of utility loads during periods of peak demand while at the same time building load in off-peak periods. Load shifting typically does not substantially alter total electricity sales.
iv. Conservation:
The reduction of utility loads, more or less equally, during all or most hours of the day.
v. Load building:
The increase of utility loads, more or less equally, during all or most hours of the day.
vi. Provision of a more flexible utility load shape:
Refers to programs that set up utility options to alter customer energy consumption on an as-needed basis, as in interruptible/curtailable agreements.
Step 3. Assess program implementation strategy:
This step will identify the end-use applications that can be potentially targeted to reduce peak demand, specifically in sectors with higher subsidies. This step will also carry out a detailed benefit-cost analysis for the end-users and the utilities, including analysis on societal as well as environmental benefits.
Step 4. Implementation:
Implementation stage will design the programme for specific end-use applications, will promote the programme to the target audience through marketing approaches such as advertising, bills and inserts, and focused group meetings as in case of the industrial sector.
Step 5. Monitoring and evaluation:
This step will track the programme design and implementation and will compare the same with proposed DSM goal set by the utility. A detailed benefit-cost analysis in this case will include identifying the avoided supply cost for the utility vis-a-vis the total programme cost for the utilities and benefits to the participants including the reduced bills or incentives to the end-users.
Essay # 4. Technology Options for Demand Side Management:
Identification of suitable and practical DSM options requires study of users and end-uses of electricity. An understanding of end-uses of electricity helps identify end-use options that offer maximum DSM potential. While study of users and end uses of electricity offers to identify generalized DSM option, i.e., which end-use and/or which customer sector and/or segment to be targeted.
The need for more specific option, for the purpose of DSM implementation, would require identification of alternatives. In other words listing of all available options that can replace existing conditions in order to achieve DSM objectives is required.
The base technology generally refers to the standard or most commonly used technology within the geographical boundaries of a utility. In other words base technology is the present technological status of the end use being targeted for DSM. In contrast the alternative technology is the candidate efficient technology intended to replace base technology in order to achieve DSM objectives.
There can be a number of alternative technologies which can replace base technology. In order to select an option for implementation purpose, all the alternative technologies must be compared against the screening criteria that form the basis of estimating DSM potential. The alternative technology option that most closely fulfills the screening criteria is selected and based on its relevant attributes anticipated DSM potential is estimated.
Some alternate technology that could be considered are as given in Table 3.3:
Essay # 5. Design Guidelines for Demand Side Management Programme:
Typically a DSM programme design includes the following:
i. Determination of the ‘base’ and ‘DSM’ technology.
ii. Determination of the targeted market sector or segment.
iii. Identifying all potential barriers and possible solutions (this may include incentives).
iv. Conduct a technology cost effectiveness analysis.
v. Estimation of market penetration over the programme duration.
vi. Evaluating programme marketing strategies.
vii. Estimation of staffing resources and programme costs.
viii. Developing an implementation plan (this includes a marketing plan).
ix. Developing procedures for programme monitoring and evaluation.
The overall programme design process can be shown as follows:
1. Development of implementation plan:
After the analysis has been performed, data collected, technologies selected and programme designed, the success of a DSM programme often hinges on the ability to deliver the programme to the customers — and to persuade the customers to actively participate in the programme.
A key challenge in successfully achieving DSM objectives is making the DSM programme design work successfully ‘in the field’, that is, among customers. Customer acceptance and market penetration can vary significantly depending on how well the programme is carried out.
As might be expected, implementation is integrally linked to programme design. A poor programme design may be difficult to implement (such as when a key form is left out or important data left out of a form, or when the design fails to allow adequate time between programme steps). Similarly, a good programme design is likely to be easier to implement- steps are well thought out, people are well-trained and processes flow smoothly.
However, the best programme design is likely to require some adjustment once the programme is actually implemented. It is rare that programme designers can think of everything the first time around! A variety of delivery mechanisms are often available to assist in the implementation of utility programs.
These include:
i. In-house staff.
ii. Staff hired on a temporary basis to perform programme tasks.
iii. Market intermediaries (retailers, wholesalers, contractors, engineers, architects, etc.).
iv. Community groups.
v. Outside consultants skilled in programme implementation.
vi. Government agencies.
2. Keys to successful implementation:
The keys to successful implementation are:
i. Start with good programme design.
ii. Respond to early information in the marketplace.
iii. Be flexible with the details of programme delivery.
iv. Learn from the experience of other utilities in the region.
3. Development of market implementation strategies:
a. Types of programme designs:
DSM programs can be typically grouped into four common definitions, each of which requires a different method of implementation.
b. Information programs:
Where the programme aims to address the lack of information available to customers about energy efficiency. The key programme elements are typically brochures or booklets and seminars. This is usually the base or required component of any programme design.
c. Technical assistance programs:
Such as providing customers with energy audits of their facilities or design services. These programs address the technical barriers encountered by customers who may understand the benefits of implementing energy efficiency but do not have the technical skills to do so.
d. Financial assistance programs:
Aim to reduce the cost to customers of implementing energy efficiency measures. Most energy efficiency measures require additional expenditure to obtain the financial benefits however, many customers do not have the capital to invest; or find the financial returns of energy efficiency less attractive. These programs include direct cash incentives or loans for the purchase of energy efficient equipment.
e. Direct intervention programs:
Are actions which ‘intervene’ in the market by either requiring customers to purchase energy efficient equipment or installing/providing the energy efficient equipment for free or at a greatly reduced cost. Minimum efficiency performance standards which are introduced through regulation by governments are examples of direct intervention.
An indication of the level of effort that is typically involved in each of these programs is given in Fig. 3.16.
Energy efficiency improvements usually increase the higher one moves up the pyramid. Corresponding with an increasing level of design effort is most often an increase in expenditure on the programme. Generally speaking, information programs are less costly than say monetary incentives or direct intervention.
4. DSM resources:
To ensure that DSM programs are implemented successfully, particular consideration should also be given to cost, staff and equipment requirements, responsibilities, and programme procedures should be specified clearly, keeping in mind overall programme goals and utility objectives.
Ideally, planning DSM programs is best performed by a team of people who collectively have a good working understanding of:
i. Utility characteristics, needs and objectives.
ii. Customer characteristics and needs.
iii. Available technologies.
iv. Marketing techniques available.
v. Analytic options available to assess the cost-effectiveness of a proposed set of programs.
Rarely does one person have all these skills; hence DSM normally involves input from a team of utility staff, and often specialist support from other utilities or consultants.
5. Implementation model of DSM:
For more complex DSM programs like energy audit programs in the commercial and industrial sectors, implementation resources (technical and financial) are considered to be major barriers. These barriers could be overcome if the utility could provide both the technical expertise and establish a revolving fund to support DSM activities.
In this model the utility DSM staff would have the necessary skills to conduct detailed energy audits, provide procurement and project management services. The utility establishes a revolving fund and provide funding for project implementation. The beneficiary customer will service the loan from the savings and payments are paid through the electricity bills.
The sample structure of DSM implementation model for an utility service can be given as:
Essay # 6. Benefits of Demand Side Management:
Changing electricity markets in the developing and the developed countries face several challenges, largely due to the uncertainties in the load growth, higher investments required in capacity addition, declining fuel sources and its associated environmental costs. Tariff changes due to the changing regulatory stands also affect the ability of utilities to service its customer base.
The concept of Demand Side Management (DSM) was developed in response to the potential problems of global warming and the need for sustainable development, and the recognition that improved energy efficiency represents the most cost-effective option to reduce the impacts of these problems.
DSM refers to cooperative activities between the utility and its customers (sometimes with the assistance of third parties such as energy services companies and various trade allies) to implement options for increasing the efficiency of energy utilization, with resulting benefits to the customer, utility and society as a whole. Benefits of the DSM initiatives are diverse, as outlined in Table 3.2.
The implementation of DSM programs is likely to:
i. Improve the efficiency of energy systems – through improved generation efficiency and system load factor.
ii. Reduce financial needs to build new energy facilities (generation) – through deferral of capital expenditure resulting from peak demand reduction through DSM.
iii. Minimize adverse environmental impacts – reduction of GHG emissions through efficient generation and minimizing thermal generation.
iv. Lower the cost of delivered energy to consumers – lower generation costs and lower customer bills through the use of energy efficient equipment and appliances.
v. Reduce power shortages and power cuts – improved system reliability though decrease in demand.
vi. Improve the reliability and quality of power supply – through demand reduction in distribution systems.
vii. Contribute to local economic development – increased employment through reallocation of capital to other development projects.