Two kinds of demand-response

The briefing distinguishes between two types of demand-response: 'capacity' and 'balancing'. Demand-response as capacity reduces the need for new power plants by moderating peak demand events, while demand-response as balancing uses automated technology to adjust electricity use in real-time to complement variable renewable energy output.

• Demand-response as capacity allows grid operators to meet peak electricity demand without constructing new power generation plants. In the U.S., published estimates for this potential range from 3 to 9 percent of summer peak demand, while Europe's potential is estimated between 5 and 11 percent.
• The PJM grid region in the eastern U.S. demonstrated the rapid growth of demand-response as capacity by adding over 8.5 million kilowatts for the 2012/2013 delivery year, which represented nearly 5 percent of its 2011 total capacity. This increase contributed to an 85 percent drop in the price of capacity within one year.
• Automated demand-response can act as a balancing mechanism for variable renewables by adjusting building systems (HVAC and lighting) or smart appliances in real-time. In California, existing infrastructure could provide 180 to 900 thousand kilowatts of load control, potentially increasing to 1.8 million kilowatts with modest upgrades, which would exceed 30 percent of the state's current installed wind and solar capacity.
• Demand-response is presented as a more cost-effective solution for managing supply variability than grid-scale battery storage.

APA

Aggarwal, S., & Gu, J. (2012). Two kinds of demand-response. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Two-Kinds-of-Demand-Response.pdf

Chicago

Aggarwal, Sonia, and Jeffrey Gu. Two kinds of demand-response. Energy Innovation, 2012. https://energyinnovation.org/wp-content/uploads/Two-Kinds-of-Demand-Response.pdf.

Wikipedia

{{cite report |last1=Aggarwal |first1=Sonia |last2=Gu |first2=Jeffrey |title=Two kinds of demand-response |publisher=Energy Innovation |date=November 2012 |url=https://energyinnovation.org/wp-content/uploads/Two-Kinds-of-Demand-Response.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{aggarwal2012two, author = {Aggarwal, Sonia and Gu, Jeffrey}, title = {{Two kinds of demand-response}}, institution = {Energy Innovation}, year = {2012}, month = nov, url = {https://energyinnovation.org/wp-content/uploads/Two-Kinds-of-Demand-Response.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }