Premium Power is pioneering the aggregation of demand response services in South Africa.
What is Demand Response?
“Demand Response (or DR)” is the reduction of an customer’s electrical load at the request of an Aggregator. The Aggregator dispatches numerous electricity customers in this way in response to a request from the power utility (typically Eskom or a municipal electricity department). Power utilities can use DR to reduce unusually high peak demands on the system, rather than having to construct more generation or network capacity to meet these exceptional demands.
The difference between Demand Response and demand side management
Energy efficiency and demand side management (EEDSM) programmes are mainly concerned with the permanent removal of demand, through energy efficiency and conservation measures.
Demand response is mainly concerned with short term reductions in demand during peak periods, but could also, depending on the type of DR service provided, and on the method by which the customer’s load reduction is achieved, result in an overall reduction in energy produced by the power utility.
The benefits of utilising Demand Response services
Demand Response services hold many benefits for the electricity system, for the electricity customers that provide it, for the environment and more widely for the economy. By utilising Demand Response services power utilities can avoid incurring expensive capital investment in power plant that will only be used for very few hours per year – Demand Response provides a more economic alternative. Certain types of Demand Response (frequency response, for instance) will also save the utility the fuel and operating costs of maintaining spinning reserves and thus reduce its carbon emissions.
Customers benefit by earning revenues from their ability to reduce demand for a small number of hours per year, and thereby offset increasing electricity costs. Customers that use standby diesel generators to provide Demand Response services also benefit by being able to run their generators more regularly, on load, thereby drastically increasing their reliability during the occasions when they are actually needed to provide backup power. Diesel generators are typically more energy efficient than supplying power over the network and are likely to produce less carbon emissions.