What is demand response?

Demand response means changing when or how much electricity customers use, in answer to a signal such as a price or a request from the grid operator. Instead of building more plants for a few peak hours, the operator pays users to cut back. It is often cheaper than extra supply and can respond within minutes.

How it works

Customers take part in different ways. Some factories agree to reduce load on request, some households allow their air conditioning or water heaters to be briefly paused, and some face prices that rise when supply is scarce. In each case a signal from the grid leads to a drop or a shift in load.

The key trade-off is that postponed demand does not always vanish. A water heater switched off for an hour must heat more afterward, which can create a new peak, called a rebound. The value of the program depends on how many customers respond, how much each can shift, and how the rebound is handled.

Example

Say a grid expects a peak of 1,000 MW and its last 100 MW would come from a gas plant costing 150 per MWh to run. A program enrolls customers who can cut 80 MW for 3 hours, paying 100 per MWh. The cost is 80 x 3 x 100 = 24,000, compared with 100 x 3 x 150 = 45,000 for the gas plant, saving 21,000. If 80 MWh then returns as rebound the next hour, the new peak is 80 MW higher in that hour, which may cancel part of the gain. These numbers are illustrative.

How to model it in Machinations

Draw demand as a Drain fed by a Register pattern, and a price Register that rises when supply is short. A state connection from the price reduces the Drain's rate, and a Pool holds postponed demand that returns later through a Delay. Make the response share a Lever, then Play and compare the peak with and without it.