Demand side response in the electricity market

Demand response can be defined as tariffs imposed on electricity based on the usage changes by end-users for a specific period. Additionally, it refers to a way of reflecting the benefits of efficiencies in production or the management of power companies. It can either be price based or incentive-based. Examples of prices-based responses include Real-Time Pricing (RTP), Critical Peak Pricing (CPP), and time of use (TOU) tariffs. An analysis of the role of electricity companies on their customers' consumption behavior by exploring the cases of Bangladesh, Kenya, UK, and China has shown that there is a need to ensure that the understanding of electricity rates in the global population is changed. The different strategies adopted by electricity companies of the countries considered are all aimed at influencing consumer behavior to reduce the stress on the electricity grid. The relationship between the price and the supply of electricity in response to consumer demand is presented in this paper. The production, management and supply of electricity by power companies has been extensively addressed, taking into account four different countries, such as Bangladesh, China, Kenya and the UK. It provides an overview of how demand side responses have been addressed on the premise of different time spans and consumption according to consumer behavior.

I. Introduction

Most electricity consumers lack the understanding of electricity rates as they vary over time concerning demand factors and supply factors. Demand response can be defined as tariffs imposed on electricity charges based on the changes in the usage of electricity by end-users for a specific period or as a way of reflecting the benefits of efficiencies in production or the management of power companies to the end-users [2],[11],[18]. Also, the tariffs can be implemented to reduce the electricity costs when the economy is going through a particular set of challenges or when the grid’s integrity is jeopardized [1]. A lot can be achieved on the electric meter’s consumer side in response to certain conditions in the system, such as the PPN (peak period network) congestion, or peak prices that occur within designated times [11].