Power to the people

Smarter energy use through demand side management explained

Demand Side Management (DSM) is the process of incentivising and enabling customers to reduce their energy use or change their energy consumption patterns from times of high energy demand to times when demand is lower. Managing power use from residential, commercial and industrial customers helps to balance the demand and supply of energy, reducing the overall cost of maintaining the electricity grid.

Key messages

1. Demand side management can play a major role in helping to reduce bills, improve electricity system reliability, improve utilisation of expensive network infrastructure and better manage both periods of minimum demand and peak demand.
2. Empowering consumers to shift their demand from periods of high demand to times of low demand can improve energy grid stability and bring down energy costs for all Australians.
3. Giving consumers the choice to control their demand is only going to become more important. Increased adoption of electric appliances and vehicles will increase demand at the same time as our sources of electricity supply become more variable as more renewable enegry sources come online.
4. We have the technologies and capability to dramatically improve the way we use energy. If properly implemented, these changes would increase consumer choice, help to reduce the cost of energy, and support the transition to a high-renewables grid.

Technological and policy solutions

The report details a number of emerging possibilities for reducing and managing household energy use, including:

• Energy pricing
• Digital control systems to manage connected devices
• Improved interoperability standards
• Infrastructure and incentives for grid-friendly EV charging
• Household energy storage
• Virtual power plants
• Vehicle-to-grid or vehicle-to-home capabilities