Demand response is a temporary measure to meet grid peaking capacity requirements. The need to purchase expensive peaking power on the wholesale market to satisfy demand can be expensive. Lately, utilities are seeking to automate demand response processes and offer their industrial, commercial and residential customers value-added services within their demand-side management programs.
Because demand response is a form of power generation, it can be used as a cost-effective way to reduce the need to purchase expensive whole power from inefficient forms of peaking generation.
Utilities are also increasingly relying on demand response tools, like Siemens Demand Response Management System (DRMS), for their cost-effectiveness and relatively short implementation times.