Demand-side management

Demand-side management means transferring electricity consumption from hours of high load and price to a more affordably priced time, or temporarily adjusting consumption for the purpose of power balance management. More demand-side management is needed as the amount of inflexible production, such as nuclear power and renewable energy, in the grid increases. Inflexible production sets challenges on the current market model, where only energy is traded. Increasing demand-side management is one method of securing the survival of the current market model also in the future.

In Finland, electricity consumption has long been used as a reserve for maintaining the power balance, however, focusing on large industries such as forestry and the metal and chemical industries. Demand-side management is a natural opportunity to increase supply on both regulating power and reserve markets.

A novel idea on the electricity market is also so-called aggregators, i.e. companies that combine small-scale consumption and production to a larger entity, which can participate in different markets. The small-scale production of a consumer can be considered similar to demand-side management, if it reacts to the market situation and decreases the amount of electricity the party takes from the grid; these include the back-up power generators of buildings and commercial premises.

Participating in demand-side management (or demand-side response, DSR) can, at first, require investments from companies, but in the long term, it can offer a cost-efficient solution for both the company and the national economy.

Demand-side management can participate in the same market places as electricity production. Participation in reserves, for example, can mean only a few seconds' reduction in the power taken from the grid, or an hour's outage once in ten years. Or no outage at all, if power can be flexibly adjusted!

The activation numbers, reimbursement levels and technical requirements vary between different marketplaces. More information on the reserve and regulating power markets can be found here.

Operating on the day ahead market and intraday market requires an agreement with power exchange, as well as an agreement with an open electricity provider, which also covers balance responsibility. Further information: http://www.nordpoolspot.com/ and https://www.epexspot.com/en

The amount of demand-side management on the Finnish market:

Demand-side management

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