Demand Side Management in Industrial, Commercial, and Residential Sectors: A Review of Constraints and Considerations

Abstract

Demand Side Management (DSM) is a cost-effective approach to managing electricity networks, aimed at reducing capacity requirements and costs, increasing the penetration of renewable generation, and reducing power system emissions. This review article explores the distinctive characteristics of electricity demand in the industrial, commercial, and residential sectors, and their relationship to successful implementation of DSM. The constraints and considerations for DSM are characterized as technical, economic, and behavioral factors, such as process requirements, business operation constraints, and consumer decisions, respectively. By considering all three types of factors and their impacts in each sector, this review contributes novel insights that can inform the future implementation of DSM. DSM in the industrial and commercial sectors is found to be primarily constrained by technical considerations, while DSM in the commercial sector is also subject to economic constraints. Conversely, residential demand is found to be primarily constrained by human behavior and outcomes, highly variable, and the largest contributor to peak demand. This review identifies sector-specific opportunities to enhance DSM uptake. Industrial DSM uptake will benefit from technological and process improvements; commercial DSM uptake can benefit from enhanced economic incentivization; and residential DSM uptake can benefit from improved understanding of the interactions between human behavior, human outcomes, and energy use. Finally, this review investigates behavioral models and concludes that agent-based models are best suited for integrating these interactions into energy models, thereby driving the uptake of DSM, particularly in the important residential sector.