Analyzing the conservation effects of demand response programs.
Does demand response increase or decrease overall electricity usage?
During the 1980s and 1990s, as conservation evolved into the concept of efficiency, load management evolved into a new concept and discipline-demand response. In recent years, demand response programs and activities have grown rapidly in the United States, driven by the desire or need to address peak capacity shortages and reliability issues, or to use demand response as a price-modulating tool in competitive markets. Energy conservation has not been a design objective of this demand response activity, and some might say that the tradition of efficiency and demand response as the "twin pillars" of demand-side management has been lost. Our study seeks to determine whether or not this is the case.
Given that demand response programs have not been designed to focus on energy consumption, it is not surprising that the evaluations of these activities, where they have been performed, have not focused on determining consumption impacts. Much of the measurement is based on criteria such as load reduced as a percentage of enrolled load, or as a percentage of baseline usage, or the percentage of load reduced versus that which was promised to be reduced.
An extensive review of demand response programs and their conservation effect, which we define as the change in total monthly or annual energy consumption attributable to the program, shows that although the primary intended effect of demand response programs is to reduce electricity use during times of peak load, the vast majority of demand response programs also yields a small conservation effect.1