Date: October 01, 2011

To avoid unnecessary investments in transmission and generation resources, a good solution is to apply Demand Response programs to reduce the demand for electricity at peak hours, when generating electricity is more costly. Customers do not see how the electricity prices change on the real-time market, since most of them pay a flat rate based on the average price of electricity, therefore Demand Response programs can offer incentives to consumers to reduce their usage at peak hours, through rebates or as a response to higher electricity prices. For the residential customers, these programs yield positive results because users reduce their load at peak hours and, in some cases, they shift their usage to lower price periods. For industrial customers, the Demand Response programs there have not been as numerous experiments as for the residential sector, but they still yield a positive usage reduction.