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Demand Side Management and Demand Response: what they are and how they work

What is Demand Side Management?

Demand Side Management, also known as DSM, is a set of strategies used by electricity utilities to reduce or shift energy demand by encouraging customers to modify their level or pattern of electricity use. 

The most common strategies concern: 

  • Pricing: by changing the price of energy, for instance by offering time-of-use rates or peak-load pricing, utilities can encourage consumers to shift their energy usage off-peak hours or use less energy overall
  • Incentives: consumers can be offered monetary incentives both to buy energy-efficient equipment or lower prices if they agree to reduce usage during peak times of demand


It is exactly in this second category of strategies that we find Demand Side Response.

What is Demand Side Response?

Demand Side Response - also known as DSR, Demand Response, DR, or Demand Management - is one of the strategies to balance electricity supply and demand falling under the umbrella term of Demand Side Management. It is a tool used by grid operators financially compensating companies who agree to modulate their energy consumption.


If a business can be flexible with its energy usage, it can take part in a Demand Side Response programme and turn its flexibility into a new revenue stream, as well as from access lower energy costs when it uses the grid during off-peak hours. 

Demand Side Response

Transforming energy from a cost to an opportunity.

How does Demand Side Response work?

Demand response

By offering participants financial incentives to temporarily reduce their energy consumption, Demand Side Response programmes free up grid capacity when electricity demand outstrips the supply. It also helps participants to reduce their energy costs by minimising usage while energy is more expensive.


There is no one-size method of reducing demand, as individual businesses will adjust their consumption based on their operational requirements, available assets and the type of organisation they are, though common reduction steps include:

  • Switching off and reducing equipment use to decrease electricity usage, for example, turning off non-essential lighting or adjusting thermostat levels.
  • Moving to back-up energy generation, for example, back-up generators or onsite renewable sources.
  • Using an onsite uninterruptible power source (UPS) and battery storage options.


Organisations with the ability to reduce electricity consumption, or revert to 1 MW or more of onsite capacity, can earn direct revenue from taking part to Demand Response programmes. There are two revenue streams open to organisations. Either from direct participation in DSR events, or from simply being on standby.


Participation can be manual or automated, but all participants retain total control over their energy use.


Enel X works in close partnership with its customers to create reduction plans and safeguard core business operations from being affected by participation. Depending on operational requirements, customers can nominate specific timeframes when they want to be available to participate in DSR events.


What are the benefits of Demand Side Response?

Demand Response Calculator

Find out how much you can earn by reducing energy consumption through Demand Response.

A new stream of revenue

Depending on the number of MWs organisations can make available, participants can earn substantial new revenue. How often it can be freed up and the current market price also determine the size of payments. Working with Enel X, commercial and industrial participants in Ireland and Northern Ireland can earn up to €16k per MW per year over the next 4 years.


Energy cost savings

Reducing usage at peak times means organisations are using less energy when it is more expensive. This leads to long-term reductions in energy costs.

Cost-free and risk-free

By taking part in DSR events with Enel X, organisations face no upfront costs or risks. If organisations can’t temporarily reduce their consumption, there are no penalties; they’re simply not paid for that event.


Contributing to grid stability

All electricity users in Ireland and Northern Ireland benefit from participation in Demand Side Response, as it is crucial for managing the continued security and supply of energy. By taking part, organisations are helping to stop power outages while generating revenue.


Sustainability and decarbonisation

By helping to balance energy supply and demand, participants make room for more variable renewable energy (VRE) sources, such as wind and solar, to be introduced onto the grid. This helps to decarbonise the economy and meet Net Zero emission targets too.


Improved business resilience

Often used and maintained assets are more reliable. Organisations that use battery and generation assets in DSR events are more likely to be able to use these assets in cases of unpredicted outages.


Protect operations with advance notice of outages

If grid instability and outages are predicted, Demand Side Response participants receive advance warning, giving them the opportunity to prepare. This can give companies like manufacturers the opportunity to schedule downtime and maintenance to coincide with outages.


Overall, Demand Side Response can help organisations to support a flexible grid, increase profitability, reduce emissions, and enhance operational resilience. Read this white paper to find out more.

How to access Demand Side Response programmes?

With help from Enel X, organisations can easily access Demand Side Response programmes. When ready to take part, Enel X will inspect organisations’ half-hourly electricity data to determine the potential benefits. Once assessed, Enel X will process all the paperwork on behalf of organisations. Participants will start receiving income for the DSR events they participate in as soon as the agreements are in place. To schedule a call with an Enel X team member, click here.