DSM (Demand Side Managament) has changed since it was first introduced in the 1980s as an active policy instrument to make energy systems perform better and more economically. In the years since and primarily in the early years of the new millennium technology has provided new opportunities with smarter applications, decentralised power making use of local renewable sources and with a booming IT for management. We rather talk about Integrated DSM (IDSM). Policy challenges to make energy systems sustainable and reduce (prevent) climate change has been more pronounced with the Paris accord as the ultimate example. Still market uptake is slow and well beyond expectations (and needs). It is time for DSM to shape up and deliver! Speaker for this webinar: Hans Nilsson

1. Demand Side Management for the
21st century
Hans Nilsson
FourFact AB
eceee
IEA DSM-Programme
1

2. DSM is changing shape
• An (electric) utility issue
2
•DSM used to be •DSM expands into
• A societal issue (about sustainability)
• Focus energy services in full
• Take into account Cost-Value-Risk
• Implications for health e.g. air quality
Example "Energy Conservation and Demand Management Program
Goals of Conservation in Ontario: ….a variety of goals
such as environmental, financial, health and resilience
…. in an efficient and cost effective manner

3. Source: An EPRI Initiative to Advance the Efficient and Effective Use of Energy
New Technologies will change business
3
1. More ICT
2. New applications
3. New (smaller)
generation units

4. Cheapest resource
4

5. Does price drive the change?
8
16
2
3
Source: IEA WEO 2015

6. But still the logic does not appeal

7. What is/was DSM?
• The planning and implementation of activities designed to influence the
customer’s use of energy in ways that will produce desired changes in the
load
• DSM relates to the entire range of management functions (planning,
evaluation, implementation and monitoring)
7
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8. What the past tells us as for the future
• DSM= Large-Scale Deployment of Energy Efficient Equipment by use of
specially designed programmes
8

9. 1. The logic of DSM

10. What is on the customer´s mind?
-

11. Where we are heading Coming up?
Required!
PROFITABLE!
Overall logic (WEO 2012)
+

12. Energy efficiency has a superior logic
Efficiency is the FIRST fuel
Efficiency is an invisible
powerhouse
Efficiency is a hidden jewel
Efficiency has multiple
benefits
Efficiency is the one
resource all possess in
abundance
abundance,
+

13. The logic of industrial revolutions
13
?

14. The logic of DSM needs a wider application
• Technology provides expanding possibilities
• Institutional and political awareness allows DSM to be an active tool for
efficient use of resources (circular and sharing economy).
• Behavioural issues get a more pronounced role.
• Sufficiency?
14

15. 2. Governance
15

16. Governance in several ways to transform the market
16
Product Performance
Market Penetration
Base case
Preferred Case
Technology
Procurement
(BAT+)
Labels
White Cert./
EEO
(BAT)
Standards
& Directives
(WAT)
+

17. Multiple Benefits
(Non Energy Benefits)
Sources: http://www.iea.org/publications/insights/ee_improvements.pdf
http://www.iea.org/Textbase/npsum/MultipleBenefits2014SUM.pdf
+
+
+
+

18. 18
Governanceoutofthebox
Source: ENERGY-EFFICIENT TECHNOLOGIES AND CLIMATE CHANGE POLICIES: ISSUES AND EVIDENCE Jaffe et al.
+
Governanceoutofthebox

19. Governence taking real people into account
Two
systems
of
thinking
(FAST,
automatic)
(SLOW,
deliberative
)
Behaviour
Economic
outcomes and
shared mental
models
Beliefs and habits
1. Consistency4. Asymmetry
2. Agency
3. Public
domain
World Development Report 2015: Mind, Society, and Behavior (Adapatation): http://www.worldbank.org/en/publication/wdr2015
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20. 20
Governance requires more attention to real
people

21. 3. Load level
21

22. Strategic
growth
From this
Strategic
Saving
To This
Or to
this
DSM can change the LOAD LEVEL
Adapts the system to the environmental requirements
From “carbon-fat” to carbon-lean
?
!
=

23. DSM Policy for load level
Assessment of the least-cost delivery of energy
services that includes both the demand and supply
side. (IDSM)
DELIVERS MOTIVES FOR:
• Energy service companies (and performance contracting)
• Allocation of commitments and obligations that mobilises the
appropriate set of actors
• Support programmes/Policies for energy efficient products
• Allocation of obligations for reduction of GHG-emissions between sectors
and countries
• Improved use of market communication mechanisms, e.g. standards and
labels
• Input to how further research and support mechanisms should be
distributed among actors.
23

24. Smart - but not that smart
24
-

25. 25
Load level changes is still the main focus

26. 4. Load shape
26

27. DSM can Change the LOAD SHAPE
Adapts the load to the capacity of the system
Day Night Day
Before
After
€ (but)
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28. DSM Policy for load shape will deliver
• Less Price Volatility by improving short term price elasticity
• System Reliability by reducing peaks and adding to safety margins
• System Security by reducing dependency on vulnerable supply
resources
• Restoration Capacity by dispatching in/after emergency situations
• Less costly network reinforcements since energy efficiency
measures will be active alternatives
• Opportunities for Distributed generation as alternative to
transmission lines.
• Improved operation and use of flowing renewable sources
• Elastic response as complement to competition
28

29. The technologies change the markets
Demand 2
1
2

30. 30
Load shape changes gets more strategic

31. 5. Integration
31

32. 32
Source: IEA ETP
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33. Towards a robust Sustainability in two steps
Supply
High Density
(e.g. fossil, nuclear)
Low Density
(e.g. solar, wind, bio)
End-UseofEnergy
High Efficiency
(Low Intensity)
e.g. CFL and LED lighting;
Adjustable speed drives
UNECONOMICAL SUSTAINABLE
Low Efficiency
(High Intensity)
e.g. Incandescent lamps,
Direct electrical heating
PRESENT SYSTEM HARDLY FEASIBLE
High density, (Low
availability)
Low density, (High
availability)
1
2
+

34. 34
Integration takes a holistic view

35. 35
6. Business models

36. 36
SERVICE RULES!
PRODUCT?
+
WE:
THEY:
!

37. Efficiency has several VALUES (eg. sewage pumping
station)
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38. 38
DSM is about SERVICE and VALUE

39. Is sustainable growth possible…
39
..without DSM
and without
global co-
operation?

40. Deployment is key and must move beyond the rhetoric!

41. Thank
you !
!?!

42. -10 0 10 20 30 40
Period
Marketuptake
Higher saturation
Faster Acceptance
Earlier introduction
Values of technology deployment
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43. IEA WEO 2012
(six steps to energy efficiency)
• Visible (The energy performance of each energy end-use
and service needs to be made visible to the market.)
• Priority (The profile and importance of energy efficiency
needs to be raised.)
• Affordability (Create and support business models,
financing vehicles and incentives to ensure investors in
energy efficiency reap an appropriate share of the
rewards)
• Normal (Energy efficiency needs to be normalised if it is
to endure. Resulting benefits from learning and
economies of scale help make the most energy-efficient
option the normal solution.)
• Real (Monitoring, verification and enforcement activities
are needed to verify claimed energy efficiency)
• Realisable (Achieving the supply and widespread
adoption of energy efficient goods and services depends
on an adequate body of skilled practitioners in
government and industry.)
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44. Demand Response (DR, flexibility) and price impact
44
Price
Load
Supply
Inelastic
Demand
Price without demand
response
Demand with
Enabling programmes
Price with enabling
programmes
Load with enabling programs
=
Elastic
demand
1
2