Let’s start with a defining statement for microgrid systems; they are self-sufficient energy systems that cater to energy needs for a small geographical area, they can have one or more kinds of energy sources such as solar panels, heat sources or wind turbines and even contain an energy storage solution, for example, batteries.
Their primary purpose is to produce sustainable power for an allocated area. These areas can be hospitals, campuses, business centres and small neighbourhoods. Microgrid systems are discussed in association with renewable energy, mainly because that is the type of energy being developed in recent years. They happen to do better than large scale grids that cater to larger populations from fossil fuel sources and are becoming increasingly accepted.
Microgrids work in an interconnected way, providing energy to buildings in the form of electricity, cooling and heating through software and digital control systems. Its major characteristics include:
- being local, which means it provides its services to nearby customers
- being independent, which means it can be disconnected from its central grid yet still function at 100%, this comes in handy in times of central outages and lastly
- being intelligent, which is a result of advanced software and management systems.
With the efficiency of microgrids, there is a pertinent need to measure their energy demand and supply, which is where Demand-Side Management comes in.
What is Demand-Side Management (DSM)?
Demand-Side Management can be explained as the “group of actions designed to efficiently manage a site’s energy consumption to cut costs incurred for the supply of electrical energy, from grid charges and general system charges, including taxes” according to Enel X. These actions are necessary for optimising energy use and saving costs on electricity charges by understanding the overall consumption costs, the amount of time this consumption occurs, and the supply and connection parameters.
Demand-Side Management is enshrined in the instability of grid systems around the world since renewable energy sources are highly penetrable including the decentralisation of their production, these cause innumerable disruptions on the microgrids and grid management services, a balance is therefore needed.
The demand and supply balance is a significant worry; the amount of energy created and fed into the grids has to match the consumption habits. Grid managers can now create energy management systems to offer grid services that are paid for, which in turn increase the costs for the electrical system.
In-depth on-site analysis has to be carried out on individual microgrid sites to properly engage in Demand-Side Management to ascertain the generation and consumption habits of customers.
All the measures used under Demand-Side Management are implemented on the generation side of the energy meter to modify consumption patterns and enable efficiency in using and managing energy loads. The measures don’t only involve energy efficiency but also something else called Demand Response (DR).
Demand Response is a technique that microgrid managers use to balance out sudden surges or plummets in consumers’ consumption of energy. DSM program participation, for now, can be voluntary or mandatory for consumers, for those that decide to volunteer, there are attractive incentives to encourage more participation. Some regulations have been introduced by most energy (electricity specifically) regulators that have encouraged the integration of Demand-Side Management at their facilities, an attempt at a level playing field for DSM.
What are the Advantages of DSM?
As referenced earlier, the major advantage of Demand-Side Management is saving and reducing unnecessary energy losses. These are the direct benefits. The indirect benefits include reducing the frequency of blackouts and the mitigation of emergencies that have to do with the energy systems.
To understand the advantages and disadvantages of DSM, it is imperative to compare it to other alternatives (Supply-Side Alternatives) such as energy generated via renewable energy, the power generated via fossil fuels, load shedding and peak power plants. It is imperative to note that Supply-Side Management deals with energy management on the other side of the meter regarding supply, the polar opposite of DSM.
|Energy via Renewable Sources||
|Energy via Fossil fuels||
|Peak Power Plants||
Advantages and disadvantages of DSM, in comparison to other alternatives. Source: Science direct
Here is a comparison of DSM’s advantages from the consumers’ perspective (customers and society) and power utilities. Source: Science Direct
|Reduced cost of operations||Energy bills are reduced due to energy-efficient equipment.||Greenhouse gasses reduction because fossil fuel power plant constructions aren’t needed|
|Reduced expenses on building power plants, costs of transmission and distribution||Power cuts are reduced, and the power supply is more reliable and stable.||Power distribution is equitable due to less disruption of power|
|Operations run efficiently||Customer satisfaction and reduced maintenance costs for energy-efficient appliances||The promotion and development of sustainable energy and efficiency in the conversion of renewable energy sources|
Demand-Side Management with Microgrids allows grid managers to observe how both systems perform in the transformation of conventional microgrids to those that run on renewable energy and how the Management of demand-side can help with the instability of renewable energy sources; how they can work with renewable energy storage systems and how they can be improved on for efficient utilisation and consumption by customers. Our Community Manager module is integrated with blockchain technology that can enable you to utilise DMS effectively and efficiently.