Demand Side Management

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Definition: Demand Side Management

It can be defined as the process of planning, selection and implementation of steps with intention of influencing the customer-side or demand, either stimulated directly or indirectly by the utility. Demand Side management is used in terms of managing the demand of power/electricity. It consists of measures taken with an objective of altering the end user’s electricity usage.

It can have different purpose like - increasing demand, decreasing demand, shifting it between low and high peak periods, or managing it during intermittent load demands but the ultimate goal is always of reducing utility costs. Simply put, DSM measures help customers use electricity efficiency and by doing so reduce utility costs. The point is that the production of utility is not altered or increased by these steps. There is no effect from the supply side. All the steps are taken to alter the Demand of the utility to reach an equilibrium where the supply meets demand. Hence it is called as Demand Side Management or DSM.

DSM can be done through various steps like –

1) Increasing the efficiency of various energy consuming devices and decreasing the leakages, system conversion losses.

2) Adoption of energy efficient technologies, soft options like interruptible tariffs, higher prices during peak hours, concessional rates during off-peak hours seasonal tariffs, etc.

3) In a wider sense, DSM also includes methods such as renewable energy systems, independent power purchase, combined heat and power systems etc which helps to meet the customer's demand of utility at the lowest possible cost.


Hence, this concludes the definition of Demand Side Management along with its overview.

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