Demand-Side Resources for Electric Energy
Management
Sukhlal Sisodiya
Department of Electrical Engineering
Indian Institute of Technology
Roorkee, Uttarakhand, India-247 667
sukhlalsisodiya.iitr@gmail.com
Abstract—Demand side management (DSM) is a scheduling of
demand side resources (DSRs) activities such that the desired
load shape change can be obtained for better electric power
services. These sources are scheduled and optimized for obtaining
various objectives as minimization of the cost or maximization
of benefits for customers, utilities and environment with the best
quality services of electric energy. The purpose of this paper is to
provide basic information for the development of algorithms for
optimal scheduling for the home energy management (HEM),
building energy management (BEM) and distribution system
energy management (DSEM) for the objectives.
Keywords-Demand response, renewable portfolio standards,
demand side management, real-time pricing, distributed energy
source, particle swarm optimization.
I. I NTRODUCTION
Demand side management has a wide area of energy manage-
ment in the power distribution system. It covers all the resources
regarding energy management of demand side, concepts, policies and
technologies for balancing supply-demand of a consumer [1]. This
balance is important for the fast demand growth rate [2]. Presently, the
economy is growing at a rapid speed and, consequently, the electricity
demands are sharply elevating at a similar pace. The concept of DSM
is originated in 970s in the USA due to energy crisis [3].
The electricity sectors have two major problems: insufficient power
supply and high fuel costs. Because of insufficient fuel production
and policy changes, and high demand growth [4], [5]. The current
circumstances provide perfect incentives and timing for demand side
management technology deployment and policy intervention [6], [7].
Furthermore, the recent electricity shortage has forced government
taking policy measures to control the growing demand. The reformed
power sector structure and the competition-based power market will,
more or less, depending on the design of the future reform policy,
affect how the electricity is consumed and how the demand side
policies are implemented [8]. At present, the power shortage and
electric infrastructure problems forced to design energy policies in
such a way the effective DMS techniques can be implemented with
the fulfillment of environmental and economic conditions [9].
DSM strategies are viable options for solve the power shortage
problems and it helps to utilize energy resources in optimal ways
within environmental constraints [10]–[12]. In order to understand
the demand patterns and the effects of various DSM technology and
policy strategies on the demand, and further, properly manage the
demand, an analytical tool must be developed to utilize the limited
consumption information available to identify robust DSM options
[13].
Demand side resources (DSRs) may be in any part of residential,
commercial, industrial, and agricultural sector in a distribution system
for electric energy management [14]–[16]. These are the resources
used for scheduling of active and reactive powers, improvements of
G. B. Kumbhar
Department of Electrical Engineering
Indian Institute of Technology
Roorkee, Uttarakhand, India-247 667
gkumbfee@iitr.ac.in
reliability, advanced feeder automation, reconfiguration of primary
networks, accelerated control and protection demonstration as dis-
tributed energy resources (renewable and traditional) and storage
systems, electric vehicles (V2G), and demand response (DR) types
in the smart grid context [17]–[19].
To identify and analyze a load profile of a consumer is very
difficult as it depends on the behavior of a consumer. But, it
is an important step for demand side management techniques for
implementation.Because, it provides all informative data about the
consumer for effective load management [20]–[23]. These data are
often an aggregated record of how much the electricity is transmitted
by client types or by electricity voltage at certain hour [24]. To
understand how the electricity is consumed by different types of
clients, what sort of devices the clients are using and how they are
using these devices, large-scale survey and monitoring efforts are
often needed to collect the required end-use information [25]–[29].
To perform a quality DSM research, as well as other related
electricity sector research on both supply and demand side planning
as integrated resource planning (IRP) [9], the researchers also require
detailed information on the composition and dynamics of electricity
demand [30], [31]. Particularly, a basic understanding of peak loads,
as to when and how they have occurred, their variations by socioe-
conomic factors, and how they may change in the future, are among
the most important requirements [32]–[34]. Thus, the important and
innovative approaches of this paper may be as follows.
• The intensive use of distributed generation (renewable and
traditional) [7], [9] and vehicle to grid (V2G) [35] can be
modeled and integrated in a microgrid for scheduling different
types of consumers and power consumption level or consider-
ing different scenarios and levels of rationality using demand
price elasticity matrices in the context of day-ahead and time-
varying price signals in a smart grid considering multi-objective
problems.
• Modelling the resources for the development of algorithms for
optimal scheduling of a home, building, and distribution system.
• Maximization of distribution transformer utilization by schedul-
ing of electric motor pumps [36] for irrigation and/or residential,
commercial, and industrial loads.
• The load scheduling with high penetration of renewable re-
sources can be applied in villages considering with subsidy and
installment basis and can also analysis impact on transformer
and network performance maximization [37].
• The coordinated and uncoordinated charging and discharging
[25], [32], [38], and scheduling of demand side resources [11],
[12], [24], [29], [39], [40], can be optimized using various
optimization methods of deterministic and heuristic as mixed-
integer nonlinear programming (MINLP), particle swarm opti-
mization (PSO), genetic algorithm (GA), etc., [9], [12], [39],
[41]–[43].
• The demand response model can be integrated with a volt/var
 Demand
Demand
Time
Peak Clipping Valley Filling
Demand
Demand
Time
Strategic Conservation Strategic Load Growth
Figure 1: Load shape change objectives of demand-side management
control technique for achieving the maximum benefits of peak
price curtailment in real-time smart grid, considering distributed
energy resources (DERs) and vehicle-to-grid (V2G) [10], [14],
[44].
• The function of consumer’s cost is modeled (as cost-benefit
function) using incentive-based price elasticity which can cal-
culate the consumer’s willingness [34].
The article is organized as in following sections. Section II explains
DSM approaches and methods, Section III provides details of demand
side resources with proper classifications, the final remarks of this
paper is explained in Section IV. Section V concludes the paper.
II. D EMAND SIDE M ANAGEMENT
DSM is the fundamental solutions for reducing electricity con-
sumption and to manage peak loads at the time of higher fuel costs
or insufficient electricity capacity. As the prices of fuels increased
sharply due to high interest and inflation rates, the increased oper-
ating cost of power plants had forced demand awareness projecting
and conservation energy resource [1], [3]. Nowadays, demand side
management are an important part of power system planning as
integrated resources planning. It provides various approaches and
options to the utilities for maintaining supply-demand balance under
various conditions. Hence, the electricity structure and markets are
facing various problems for the change. In this view, the demand side
management has a new era for corresponding changes.
DSM refers to conduct the load management activities for promot-
ing the end-users to use power energy in a scientific way by taking
effective measures as improve energy efficiency, save energy, use of
optimized resources. This will help to achieve the electrical services
at the lowest cost as well as to protect the environment [2].
A. Definition of DSM
Demand side management is a concept of observation, planning,
monitoring and implementation of the activities designed by the
utility for consumers supply-demand balancing at various conditions
of prices and supply for a desired load shape change [1].
Demand
Time Time
Load Shfting
Demand
Time Time
Flexible Load Shape
B. Objectives of DSM
The main aim of the DSM is to achieve the desired load shape
without increasing supply side generation. There are six DSM activ-
ities taken by the utility company for load management. The load
management forms are the combination of various objectives. Figure
1 shows the load-shape change objectives.
1) Peak Clipping: This is a classic objective of the load
management.The aim of this type of load management is to reduce
the system peaks by direct load control. The Peak clipping reduces on
days when maximum system peaks are likely to occur and generation
might not be sufficient to meet the demand.
2) Valley Filling: This is also a traditional objective of load
management. Valley filling builds or increases the off-peak loads.
For example, uses of thermal storage units. This type of strategy is
the best where the incremental cost for the long run is less than the
average price of the electricity. And this property further decreases
the average price.
3) Load Shifting: This type of DSM objective involves load
shifting activities for peak loads to off-peak. It is also the traditional
forms of the objectives for the load management taken by the utilities.
The Conventional devices for load shifting include cooling storage,
customer load shifting, space heating storage, domestic hot water
storage, etc.
4) Strategic Conservation: This is a targeted conservation
activity which reduces the sales of electric energy. The appliances
efficiency improvement and building energy conservation are some
examples of strategic conservation. This is not necessary to reduce
the system peak. However, in a growing economy where electricity
total consumption and peak loads continue to rise at rapid speed
and the capacity installation may not be able to keep up with the
demand, some forms of strategic conservation become particularly
desirable to the utilities. Strategic conservation is an updated and
modern technique for load management in smart grid era. This is the
cost-effective program for utility.
5) Strategic Load Growth: This strategy sports to increase the
energy consumptions. It has the spontaneous effects on economic
growth. Electrification, industrial and commercial heating process,
 Demand-Side Resources

Demand Response Distributed Generation and Energy Efficient Devices Policies Information and Communication
Storage Systems Technology (ICT)

substitution for primary fuels, etc., are the examples of strategic with pricing rate models of peak and off-peak along with intermediate
load growth which increase in energy intensity in industrial and prices. TOU is set in advance or fixed for a specific period subject
commercial sectors. It improves the overall productivity and reduces to annual review.
the environmental impacts. B. Real-time Pricing (RTP)
6) Flexible Load Shape: Reliability change in electricity ser-
vices could be changed the load shapes. Flexible reliability offers Real-time pricing increases the transparency between wholesale and
variations in quality of services by consumers in exchange for other retail markets. It is advanced designed for pricing on the basic
benefits. Such programs could contain interruptible loads, pooled directly and indirectly links with end-users. It offers various options
customer energy management programs, and individual consumer as market price, fixed price for rebalancing risks. Based on the risk
load control devices with service constraints. management, it rewards the consumers and suppliers.
The first three strategies are traditional load management ap- C. Critical Peak Pricing (CPP)
proaches adopted for desired load shape change. In respect to this Critical peak pricing includes real time-pricing and time-of-use
change, proper incentives are provided by the utilities to target pricing. The traditional TOP affects all year, excepting contracted
customers for avoiding construction of new generation units for more peak days. The peak days are known in advance, but the timing of
specific load-shape changes by renewable energy resources or low as that days are unknown.These peak days have a much high price. The
energy sources. The last three strategies offer more systematic and information of the critical peak price is signaled to users in advanced
more applicable in distributed energy resources with the internet of notice using automated communications.
things. 2) Incentive-based: Incentive-based demand response includes
interruptible/curtailable rates, direct load control, demand bid-
C. Methods of DSM ding/buyback programs, capacity market programs, emergency de-
The methods of demand side management can be characterized mand response programs and ancillary services market programs.
as: A. Direct Load Control and Curtailment
Methods of DSM Direct control programs are conducted by system operators. These
programs are triggered when system constraints or wholesale pricing
are violated. It is different from load shifting as the timing of shifting
Energy Efficient Equipments Demand Response is controlled by the operator and not by the consumer. This approach
necessitates pre-agreed programs with consumers. The pre-agreement
III. D EMAND SIDE R ESOURCES term makes it commercial for participation. A program designed for
the residential sector is cyclic, automated, and remotely controlled
A. Demand Response through internet, radio, tele-switch devices, ripple control or mains
Demand response (DR) is a concept related to the reliability and control. Heating and cooling systems are cycled and switched on
planning constraints [13]. It refers to the mechanisms in response based on agreed in advance. Such customers have to install controls
to the supply conditions at a high price for managing customers on interruptible equipment as swimming pool pumps, electric heating
demand. For instance, the energy consumption reduction by con- load, air conditioners, etc. In the residential environment, these types
sumers at insufficient supply conditions or high electricity price. The of programs are automated and remotely controlled through the use
classification of demand response can are of two types: of radio, ripple control, mains control or tele-switch devices. Larger
industrial operations are a target to reduce their loads to a minimum
Demand Response threshold.
A. Demand Side Bidding
Time-Based Incentive-Based Demand side bidding (DSB) provides opportunities to customers
through electricity trading markets to chose options how and when to
participate in the electricity markets. In This process, the withdrawal
Time-of-Use Real-Time Price Critical Peak Price loads have to be paid at market price by market operators in a similar
(TOU) (RTP) (CPP)
way to be paid to generators supply, customers bid for a specific
duration, reduction, and availability. After that bidder is ranked and
Interruptible /Direct Load Control Demand-Side Bidding chosen as per the market requirement. All bidders have to pay highest
acceptable bids in the case of certain developing DSB markets.
1) Time-Based Rates: Time based rates include critical peak There are two key requirements for the consumer to access DSB
pricing (CPP), real-time pricing (RTP), and time-of-use (TOU) rates.
markets: first, the consumer must have controllable loads. There may
A. Time-of-Use (TOU) Pricing be any processes or activities facilitated by local control technologies
In time-of-use programs, price varies according to the season, day as a building energy management system [45]. Second, consumers
or hour of consumption. It is being used as a tool for balancing should be able to access up-to-date information on market prices
demand by the utilities. TOU pricing requires determining a value for submitting their bids. On the consumer side, it is required some
of electricity during specific hours of day, day of weeks or season investment for the information technologies, or in some cases, it is
by both consumer and supplier or retailer. TOU process incorporates by the market operator.
 Energy Storage Systems
Electrochemical Chemical Mechanical
Lead Acid Hydrogen Pumped Hydro-PHS
Li-Ion Fuel Cell Flywheel-FES
NiMH Compressed Air-CAES
NaS
Flow batteries
Vehicle to Grid WV2G)
Uninterruptible Power Supply WUPS)
Electric Loads
Controllable
Broad Controllable Passive Active
VPP MG Shiftable Curtailable
B. Energy Efficient Devices
Energy efficiency involves a deliberate effort by the utility to
change the load shape (amount or pattern) by the customer through
such hardware related actions as the appliances efficiency improve-
ment and building energy conservation, through such non-hardware-
related actions as altered consumer utilization patterns, as well as
through the adoption of electric end-uses which displace fossil fuels
with effective policies and programs at the international and local
levels. Each of these efforts is part of a smart grid in order to
maximize the potential for energy efficiency improvement.
The electric loads can be classified as non-controllable and con-
trollable. The operation time of controllable loads is flexible and
it is fixed for non-controllable loads. Thus, the controllable loads
can be shifted and curtailed, but the non-controllable loads cannot
be shifted and curtailed. The uses of efficient end-use devices may
reduce cost, line losses, peak demands, consumers dis-comfortability
and environmental impacts. Thus, it may be beneficial for the supplier
as well as for its customers and the environment.
C. Distributed Generation and Storage Systems
The development of technologies and growth of economy stimulate
and encourage to the end-users to adopt the distributed energy
resources. DER includes on-site distributed generations (DGs) and
storages. The distributed generations may be renewable energy
sources as photovoltaics (PVs), wind, biomass as well as conventional
sources as combined heat and power (CHP), design generator, and
microturbines. It facilitates local energy services without interruption
at minimum cost and environmental impacts. It increases flexibility,
better lifestyle, and independence of an end-user. The resources
can be optimized for better energy management. These can be
integrated with a smart grid. The residential, commercial, industrial,
and agricultural sectors can be facilitated with DER individually
as well as in an integrated way for better energy services. Plug-in
electric vehicle (PHEV) has a significant use of DER with optimized
coordinated control for charging and discharging.
Electrical Thermal
Superconductive Magnetic Hot Water
Energy Storage WSMES Sensible heat
Supper Capacitor WMolten Salt)
Electrochemical Capacitor Phase Change
Materials
Non-controllable
Lighting Systems Electronic Devices Plug Loads
Battery Storage V2G CHP
D. Policy
The main energy policy objectives are to balance supply-demand
at a time. The energy policy supports the development of solar pho-
tovoltaic systems, wind energy sources so that the flexible, efficient
and reliable energy services can be provided to customers with their
comfort satisfaction. Generally, the followings four types of policies
as feed-in teriffs (FITs), investment subsidies, output subsidies, and
output quotas Renewable Portfolio Standards (RPS) are adopted.
These economic policies for energy cover financial supports to
end-users and municipals for their investments for renewable energy
sources as PV and wind, distributed energy resources (distributed
generations and storages), plug-in electric vehicles, etc. The energy
policies play great importance for energy, socio-economic and envi-
ronment to solve their challenges with the economic growth.
E. Information and Communication Technology
The information and communication technology (ICT) plays an
important role in smart grid concept. This helps electric power
delivery system to provide better energy services to the electricity
consumers providing real-time information and communications. A
complex and dump system may become a smart system, with help
of sensors, the ability of computation and communication, which
improves the productivity, quality, and efficiency of a system with
better environmental performance. ICT makes ease process of a
sophisticated operation and control. It helps electric energy manage-
ment system to reduce cost and environmental impact by providing
feedback of various demand side resources in real-time. It integrates
the sparse components of a system and enables it to compete for better
services offering various benefits. It improves complex decision-
making process for better energy management.
IV. F INAL R EMARKS
Demand side management commonly refers the programs con-
ducted by utilities for controlling the energy consumption at cus-
tomers side. The programs are implemented to facilities additional
 Policies
Fid-in-Teriffs Output Subsydies
capacity and energy resources without installing new infrastructure
for the generation. DSM includes energy efficiency and conservation,
fuel substitution, load management, and demand response programs.
All the DSM works that have been done in the US strived to
overcome the financial barriers, to provide financial incentives, to
offer suitable products on the market, and to present sufficient
information in order to help the consumers shifting their purchasing
decisions. However, the responsibility of DSM implementation was
heavily placed on the utility sector and the mechanism has failed
to form natural market incentives for sustainable demand side energy
efficiency improvement. Moreover, the utility-based DSM mechanism
also shows its limitation in engaging active end-user participation.
As the electric sector competition introduced, the fate of utility-
administered DSM has changed. A new mechanism for a competitive
electricity market is under development in worlds countries. When
the traditional IRP/DSM framework has shown its limitation in a
competitive market, the decision makers face a tremendous challenge
to develop new DSM mechanism that is suitable for the reformed
competitive power sector and. The recent development of public
benefit funds and market transformation based efficiency programs
and the new roles that the utilities, ESCOs, and the public or non-
profit energy efficiency institutions may play could point a possible
future direction to the design of DSM policies in many issues such
as interruptible loads.
V. C ONCLUSION
The scheduling problem, formulation, and modeling for different
demand side resources depend on its type. The scheduling of various
demand side resources of the home, building, and distribution system
for reducing peak demand, losses and the overall operation cost can
be achieved through the scheduling.
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