Demand Side Management

The goals of utilization of demand-side management are to encourage reduced energy consumption among the energy consumers during peak hours (Gelazanskas & Gamage, 2014 p. Demand side management policy has been applied in various regions such as the United Kingdom. Its application in the United Kingdom has made the United Kingdom a better place for business as it has made the supply of energy in the region reliable and consistency (Singh et al, 2017 p. In the United Kingdom, various utility companies have of late championed as a measure of implementing the region’s desired energy efficiency measures. In spite of demand-side management being a good measure towards the realization of energy efficiency, it is costly hence the availability of inadequate incentives has hindered various utility companies from investing in demand-side management (Behrangrad, 2015 p.

They reduce the consumption of electricity during peak hours consequently reducing the cost incurred in their wholesale purchase of electricity (Fell et al, 2015, p. During peak hour the wholesale prices of electricity are very high, and if there is high consumption of electricity by companies during this time, it results to increased input costs thus reducing the value of the companies output. The demand-side response is used in the United Kingdom to foster sustainable development in the region. Through the use of demand-side response, electricity supply is made consistent as well as reliable hence encouraging investments in the region (Fell et al, 2015, p. Furthermore, electricity is made more affordable which in turn encourage investments as well. Some of this barrier includes limited market, unclear government policy, and technological changes (Hall & Roelich 2016 p.

The United Kingdom market is technology conscious. It is keen with changes in energy sector induced by technological advancement. Through technological advancement, more consistent and reliable as well as cheap energy sources whose prices are not influenced by peak hours has emerged hence rendering the idea of demand-side response irrelevant. Lack of incentives provision by the U. This has made demand side response ineffective hence not worth implementing in the United Kingdom. Regulatory frameworks are also hindering implementation of demand-side response in the United Kingdom. In most of the European countries, the demand-side response is not legally permitted to be commercially utilized in the electricity market (Hall & Roelich, 2016 p. It is considered as an enemy to development as limiting the power consumed by firms also limits their expansion.

Furthermore, the United Kingdom inhabitants are not well informed about the demand side response (Hall & Roelich, 2016 p. This has forced the United Kingdom to venture in different ways of distributed generation to meet the high demand for electricity. As at 2014, electricity utilization in the United Kingdom stood as 2,249TWh. With the high rate of electricity consumption, United Kingdom had to consider different way via which it could produce reliable and enough electricity (Allan et al, 2015 p. The desire to meet the greenhouse gases emission target has forced the United Kingdom to venture in generated distribution (Ceseña et al, 2015 p. This made it come up with new systems of generating electricity in both small-scale sectors as well as in commercial and industrial sector.

The business of electricity generation is very high as buying of the machines used for electricity generation, transmission and the process of locating sites for generation is very high. Market entry by new electricity generation firms such as firms majoring in generation of nuclear energy is costly hence hindering diversification of distributed generation in the United Kingdom (Allan et al, 2015 p. The United Kingdom government policies aims at minimizing pollution especially from energy generation and consumption achieved via embracing certain technologies. The technologies used for reducing pollution are very expensive to adopt hence being a legal requirement, firms generating electricity are quitting the market as this legal compliance is very expensive (Allan et al, 2015 p. Demand Reduction Demand reduction is one of demand-side management which aims at promoting energy efficiency measures through regulation the rate of consumption of energy.

The government also urges the energy consumers both household consumers as well as manufacturers to use more efficient electrical appliances and equipment respectively hence reducing the amount of energy consumed which consequently reduces the amount of emitted greenhouse gases. Demand for energy is also reduced in the United Kingdom to achieve energy efficiency. The United Kingdom government makes use of the green deal to ensure that energy demand is reduced (Nejat et al, 2015 p. The green deal involves ‘pay-as-you-save. ” The deals involve increasing privileges to energy consumers who save a lot of energy (Nejat et al, 2015 p. Technological advancement in the United Kingdom has also been serving as a barrier of achieving demand reduction (Nejat et al, 2015 p. Despite acquiring the energy efficient equipment and electrical appliance, technological advancement has led to creation of other more efficient ones thus making the later obsolete while their costs are very high.

Installation of the proposed devices is also very expensive as it requires professionals who are very expensive to hire. Conclusion Demand side management strategies are the most appropriate way of promoting energy efficiency measure. The United Kingdom has been applying these strategies to ensure that energy in the country is efficiently used. Behrangrad, M. A review of demand side management business models in the electricity market.  Renewable and Sustainable Energy Reviews, 47, pp. Fell, M. J.  Energy Policy, 92, pp. Muñoz-Delgado, G. , Contreras, J. and Arroyo, J. M. A global review of energy consumption, CO2 emissions and policy in the residential sector (with an overview of the top ten CO2 emitting countries).  Renewable and sustainable energy reviews, 43, pp. Qadrdan, M. , Cheng, M.