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More flexibility through demand side management

Demand side management (DSM) is a concept for managing loads in order to increase the flexibility of the demand for electricity and to reduce costs.

A series of projects which dena is currently carrying out in Bavaria and Baden-Württemberg demonstrates the great potential of DSM. 

Statistics & facts

41 %
Electricity consumed
by the industrial sector in 2015 as a percentage of the overall electricity consumption in Germany.
10 GW
between estimates of DSM potential in the industrial sector according to two studies (5–15 GW).
270 MW
Cumulative output
of the processes analysed in 53 companies as part of the Pilot Project DSM Bavaria.
40 MW
Cumulative output
of the processes in the Pilot Project DSM Bavaria, for which a DSM marketing agreement was reached.

Targeted management of the demand for electricity

demand side management

With demand side management, electricity consumers can influence their own electricity consumption. This load management allows fluctuating electricity generation from renewable energy installations to be compensated for and new sources of income to be tapped into.

In a time where renewable energy sources are increasingly being used, flexibility grows ever more significant. They continue to allow electricity generation and electricity requirements to be balanced out in a stable fashion, thereby ensuring the security of supply. Flexibility options include e.g. flexible power stations, which adapt their production to the generation of electricity from wind power and photovoltaic systems, facilities for the interim storage of the renewable electricity, as well as high-performance electricity grids which are able to transport and distribute the electricity over wide areas. One other promising flexibility option is demand side management (DSM).

Equalisation through demand side management 

Demand side management (DSM), sometimes also known as load management, refers to the management of the demand for electricity, above all in industry, through the targeted switching off and on of loads according to market signals. This can be done by managing processes for which the consumption of electricity can be varied, such as in mills, furnaces, or pumps.

With flexible processes, companies can contribute to compensating for fluctuations in the generation of electricity from renewable energy sources by marketing flexible output, among other things as reserve energy. The price mechanisms on the energy exchange can also be used for DSM. If companies react to predicted price signals over the short and medium term, they can reduce the costs of their electricity purchases.

This takes place primarily via the electricity spot market and the intraday market; the electricity generation predictions and the corresponding price predictions are represented on these markets. Hence, electricity traders can estimate the value of additional electricity or lower electricity consumption, and discuss the savings potential with their customers. In general, the following applies: The greater the amount of flexible load and the more rapidly it can be activated, the greater the savings potential.

Who stands to benefit from demand side management?

Studies show that technical potential for load management is generally present in all sectors of consumption (industry, trade and commerce, private households). What dena is focusing on here are industries and businesses, because it is in these sectors where greater individual loads generally occur, and professional measurement and control equipment is available — important prerequisites that facilitate tapping into DSM potential. This is often a particularly attractive prospect in energy-intensive industries such as the chemical, steel, and glass industries, but DSM marketing can also be profitable in other industries such as the water supply, wood, construction materials, and food industries.

dena sets the course for DSM 

Despite promising prospects, demand side management is still unknown among a large percentage of the target groups. dena intends to change this by providing interested parties and users with expertise, advising them on categorising and assessing their own DSM potential, and promoting the proliferation of DSM. For example, working closely with the relevant players on the energy market, dena is actively involved in the following areas.

Market preparation and information management 

dena informs companies about the marketing possibilities of DSM and best practices in the DSM sector. Furthermore, dena helps companies identify existing flexibility potential and tap into it.
In addition, dena also compiles information and publications that are provided to a wide group of interested parties.

Conceiving and implementing pilot projects

dena conceives of and realises pilot projects related to DSM, e. g. in Baden-Württemberg and Bavaria. In these pilot projects, several hundred companies were approached, and the DSM potential of almost a hundred companies analysed.

Further development of basic framework

dena is committed to creating a level playing field for all participants and to removing market barriers, whether through statutory or technical frameworks. 

Real-world examples: DSM pilot projects in Bavaria and Baden-Württemberg

Due to the planned nuclear phaseout in Bavaria and Baden-Württemberg, large quantities of conventional generation capacities will no longer be available in the near future. However, there is a great demand for energy in southern Germany. In these states, dena is carrying out DSM pilot projects which are funded by the Bavarian State Ministry for Economic Affairs and Media, Energy and Technology and the Baden-Württemberg Ministry of the Environment, Climate Protection and the Energy Sector. The aim of the pilot projects is to test the use of demand side management in industry and business under real-world conditions, gather experience in the development and marketing of DSM potential, and use the findings obtained to further develop DSM as a business sector for companies.

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