How does demand response work?
With demand response, the current energy consumption is continuously measured. A system compares this data with predetermined conditions, such as energy rates, power limits, available generation or external control signals. The system then determines which assets can be controlled flexibly.
In practice, the process consists of four steps:
- The system measures consumption, generation and the status of connected assets.
- It processes additional data, such as dynamic rates or balance signals.
- It determines which assets can be adjusted.
- It reduces, increases or shifts the power within set limits.
Critical business processes always maintain priority. The flexibility comes from installations that can temporarily work differently without disrupting business operations.
Demand response is not energy saving
Demand response and energy savings are often confused, but they have different purposes. Energy saving reduces total energy consumption. Demand response mainly changes the moment at which electricity is used.
An installation can use the same number of kilowatt hours, but move that consumption from expensive to cheaper moment. Demand response can also temporarily increase consumption when a lot of sustainable energy is available or the electricity price is low. Examples are:
- charging a battery at low or negative prices;
- giving an electric fleet extra charging capacity;
- starting a production process earlier;
- temporarily shift cooling or heating processes.
The goal is therefore not only to consume less, but above all to consume smarter.
What forms of demand response are there?
Demand response comes in different forms.
Price-driven demand response
With price-driven demand response, an energy system responds to changes in energy rates. The system shifts consumption to cheaper hours and limits it during expensive periods. This form is especially relevant for dynamic energy contracts.
An EMS can use current or forecast market prices to automatically control energy assets. Consider charging a battery when the price is low, or limiting consumption during a price peak.
Signal-driven demand response
With signal-driven demand response, an organization receives an external request to make power available. That signal can come from an energy company, aggregator or other market party.
The installation then temporarily reduces or increases consumption. The available power can be used for:
- congestion management;
- maintaining balance;
- flexibility services;
- portfolio optimization.
Automatic demand response
Automatic demand response uses an energy management system (EMS). The EMS translates measurement data, market information and set priorities directly into actions, so that manual operation is not necessary. The system can include:
- distribute assets;
- adjust charging processes;
- charge or discharge batteries;
- limit generation;
- output external control signals.
This automation is especially important for installations with multiple assets, locations or market signals.
Which energy assets are suitable for demand response?
Not every installation is flexible. An asset must be able to be managed differently temporarily without endangering the primary business function. Commonly used flexible assets are:
- battery storage systems;
- charging stations and electric fleets;
- cooling and freezing installations;
- heat pumps;
- industrial machinery;
- production processes;
- solar panels and inverters;
- wind turbines;
- pumps, compressors and ventilation systems.
The available flexibility varies per asset.
What are the benefits of demand response?
1. Lower energy costs
Demand response shifts consumption to times with lower energy rates. Organizations avoid expensive hours and use cheaper periods. With dynamic rates, this creates a direct link between asset control and energy costs.
2. Less peak load
A high power peak can lead to higher costs or exceeding the contracted grid capacity. By temporarily reducing charging power, discharging a battery or postponing processes, the total power remains below the set limit.
This application is called peak shaving and helps organizations to:
- limit peak costs;
- monitor asset limits;
- better distribute available capacity;
- to create space for further electrification.
3. More efficient use of the grid connection
Demand response helps organizations get more out of an existing grid connection. The available power is distributed among the installations that need it at that moment. This is important when expanding charging infrastructure, electrifying business processes or adding battery storage.
Due to grid congestion, a heavier connection is not always available. Active power management therefore makes existing capacity more valuable.
4. Better use of sustainable energy
Self-generated solar or wind energy provides the most value when it is used or stored locally. Demand response matches consumption to the available generation. This can be done in various ways:
- start charging processes at high PV production;
- charge batteries with a local energy surplus;
- activating flexible processes for a lot of sustainable generation;
- limit returns at unfavorable prices.
As a result, self-consumption increases and the dependence on feed-in decreases.
5. New income from flexibility
Flexible assets can be used under certain conditions on energy markets or for flexibility services. A battery, charging plaza or controllable business process then represents not only technical capacity, but also economic value. The stakes depend on:
- market access;
- contract conditions;
- available power;
- technical requirements;
- response speed;
- local restrictions.
What is the difference between demand response and peak shaving?
Peak shaving is a specific application within demand response. The focus is on limiting the maximum power of a location: the system prevents the total energy demand from exceeding a set limit.
Demand response is broader. The system can reduce, increase or shift consumption based on grid capacity, energy rates, own generation or external signals. Peak shaving mainly monitors the power limit; demand response optimizes the entire energy profile.
How does demand response help with grid congestion?
Grid congestion occurs when the demand for transport capacity is greater than the electricity grid can handle. As a result, new or heavier connections may be delayed and restrictions may arise for purchase or return. Demand response reduces the load at critical moments.
Demand response does not solve grid congestion independently, but it does make the available grid capacity more efficient. Possible interventions are:
- have a battery jump in during a peak;
- temporarily charge charging stations more slowly;
- production processes shift;
- store local energy surplus;
- activate extra consumption when generating a lot.
What is the role of an EMS in demand response?
An energy management system (EMS) forms the central brain of the energy installation. An EMS can include:
- monitor the total connected load;
- smoothing peak loads;
- distribute payload dynamically;
- charge and discharge batteries;
- matching generation to consumption;
- process market prices;
- output external control signals;
- analyze quarter-hour values.
Without EMS, demand response is often limited to manual actions, fixed timetables or separate rules per asset. This does not provide sufficient speed and coherence for complex installations.
Smartbox
Smartbox: the smart EMS for demand response
The Smartbox is an energy management system that automatically controls energy assets based on real-time data, energy prices and available grid capacity. The system acts as the brain of the entire installation. It continuously coordinates consumption, generation and storage and translates market and control signals directly into concrete actions.
This allows end users to actively shift, reduce or increase their energy consumption. The installation automatically responds to price differences, power peaks and changes in local generation. In this way, energy costs are limited, the connection remains within the set limits and end users get more value from flexible assets.
The power of Smartbox:
- Automatically controls energy assets based on real-time consumption, generation and energy rates.
- Responds to changes in loads, prices and external control signals within 20 milliseconds.
- Reduces peak loads with automatic power distribution and peak shaving.
- Optimizes battery use through smart charging and discharging based on capacity and price.
- Shifts flexible consumption to financially and technically favorable moments.
- Limited unfavorable return delivery with smart, automatic curtailment.
- Integrates batteries, solar panels, wind turbines, charging infrastructure, generators and cooling within one control strategy.
- Provides real-time insight into energy flows and performance via the Smartbox Portal.
Make demand response profitable for your customers
As an installer or energy company], do you want to help your customers use energy smarter and unlock new revenue models? With Smartbox you make consumption, generation and storage automatically controllable.
Your customers reduce their energy costs, limit peak loads and make better use of flexible assets. At the same time, you expand your services and benefit from flexibility, energy management and market optimization.
Interested in an introductory meeting? Call or email us, or fill in our contact form.