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DEMAND SIDE MANAGEMENT Empowering Utilities and Consumers to Take Control of Energy I n recent years, Demand Response (DR) programmes have garnered interest and attention in the electricity industry, as they allow utilities and municipalities to manage the equilibrium and cost of energy systems and ensure continued reliability of generation capacity. The emergence of new cost effective technologies appears to make the process of responding to emergency periods (load shedding) easier and therefore more palatable to most consumers. EXTENDING INTELLIGENCE TO CUSTOMERS Achieving utility business transformation requires evolving the relationship between the utility and consumer into a rich collaboration. It is with these challenges in mind that Itron developed WHAT IS THE DIFFERENCE BETWEEN DEMAND RESPONSE AND DYNAMIC PRICING? The terms demand response and dynamic pricing are sometimes used interchangeably, but the concepts are quite unique. Demand response is a distinct reduction in energy usage for a defined and typically short period of time, such as by way of load shedding. Dynamic pricing refers to the rules under which a customer is charged for their energy usage, whereby the tariff is either increased or decreased in relation to the time of use and is typically combined with an incentive, such as a tariff rebate. The two concepts of demand response and dynamic pricing are merged when a programme is defined. 44 its new Itron Riva distributed intelligence platform; a technology platform that empowers the utility to make decisions and respond to changing conditions in real-time. By extending intelligence throughout the network, Itron Riva brings new approaches to solving today’s critical challenges in grid operations. Itron Riva transforms the utilities’ demand response events by averaging the target load reductions within specific metered populations to achieve the event goals. The distributed intelligence of Itron Riva segments meters to enable surgical reductions in demand, based on individual customer profiles and their ability to shed load. DEMAND RESPONSE AND DYNAMIC PRICING The use of demand response in combination with dynamic pricing programmes promises significant benefits for consumers and utilities. Some utilities state that these programmes are almost 40% of the business case supporting the cost of smart metering along with labour savings, call centre cost reductions, reduced incidents of theft and increased customer satisfaction. On the surface, demand response is a simple concept; during a period of high usage, causing system constraints, end-users reduce their usage and are rewarded for that reduction with an incentive payment or some other form of financial compensation. The reality of demand response is much more complex, involving program design, billing and compensation rules and management or regulatory decisions, technology implementations from smart meters to analytic solutions, and customer engagement efforts from basic energy education to community awareness campaigns and competitions. Each component within the DR universe presents its own challenges; however addressed together there is promise for successful programmes benefiting utilities and consumers alike. ACHIEVING DEMAND RESPONSE SUCCESS Demand response will play an ever- increasing role in the management of the grid. More than likely, automated control of appliances and systems will ultimately become standard daily operations, evolving from an exciting and novel idea to one that goes almost unnoticed but renders significant value. Attaining this level of stability and comfort with DR execution can be reached by a smooth-flowing DR universe where each component fulfills its goals and feeds the cycle with information for improvement. Achieving that success requires a strong partnership between policy makers, technologists, educators and consumers. Itron believes in building sustainability into our already resource- stretched systems. It is only through technology and process innovations that promised opportunity can be realised. We work with our customers to achieve their goals and continuously enhance our offering to meet the increasing challenges of the smartening grid. ESI ESI AFRICA ISSUE 2 2015