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EV Market

Why Load Management Is Keeping Our Lights On


November 11, 2021

For a long time, the use of load management or demand side-management as a solution to tackle the volatility of the energy market has been the bone of contention between the majority stakeholders. Various studies have shown how load management can be our best bet to solve some major problems. Let us explore the most common issues, which the energy sector is distressing right now and find out how load management can be a perfect solution.

The energy market faces three key challenges

High demand and low supply

With the current economic boom, it is being predicted that the global economy will grow four times the current condition from now to 2050. While this is good news in terms of improvement in the people’s standard of living, what we fail to realize is that it comes at the cost of a multi-fold increase in energy consumption. This will put extra strain on the natural resources and will hit the infrastructure - the grid.

Unpredictability of energy demand

Another challenge for the energy sector is that of unpredictability - the changing and unsteady power requirements throughout the day. When the energy demand is consistent, it is easier to predict the requirement of energy and supply electricity accordingly. When there are varying demands of electricity not just throughout a single day, but all the year round, it is highly difficult to match the demand with the supply.

Volatility of renewables

The third and foremost challenge is that of the volatility of electricity being produced from renewable sources of energy such as wind, water, and sun. From an environmental perspective, the increasing use of these elements to produce electricity is wonderful. In fact, by March 2018, out of the total electric generating capacity of the United States, 21 percent was accounted by renewable energy. However, while taking a look at all these positives associated with renewable energy, we also need to factor in the important consideration that renewable electricity generation is erratic and mostly, volatile. This unpredictability is leading to a reduction in the flexibility of the energy market.

Load Management – The All-In-One Solution

Load Management can be defined as, the process of balancing the supply of electricity on the network with the electrical load by adjusting or controlling the load rather than the power station output. In simpler terms, it is the process which aims to tackle the challenge of the gap between electricity demand and supply by controlling the consumer demand rather than by increasing the power supply. Load management is also referred to as Demand side-management because it tries to solve the problem by altering the demand instead of the supply. It resolves the problems of unpredictability, the gap between demand and supply, and reduction of the flexibility of the market due to renewable energy through several approaches.

Load Management is more than a simple switch

From bringing about behavioral changes by the means of awareness/compulsion to offering financial incentives to people for altering their electricity demands, there are quite a few ways in which load management be used to tackle the challenges faced by the energy market.

The most common method used in demand side-management tries to shift the large electrical loads to low-demand or off-peak times from high-demand or peak times. This can be done in three different ways –

  • Load clipping
  • Load clipping
  • Load shifting

All these strategies are based on the study of human behavior and are related to economics. So, this usually means that the prices of electricity are increased at high peak times for high-volume users in order to discourage them from using electricity at high peak times.

Load management is especially crucial in the energy grid due to the fact that it is not possible to store electricity in bulk and hence it must be transmitted, distributed, and used as soon as it is produced. Storing the electricity produced during low peak times and supplying it to consumers during high peak times to meet the high demand can only be one part of the solution. Hence, curtailing the load or the demand during high peak times to ensure the smooth functioning of the electric grid is the only feasible option to manage the produced electricity.

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