What is Demand Side Management?

The term Demand Side Management (DSM) is used to refer to a group of actions designed to efficiently manage a site’s energy consumption with the aim of cutting the costs incurred for the supply of electrical energy, from grid charges and general system charges, including taxes. 

The aim of these optimisation actions is to modify features of electricity consumption with reference to the overall consumption picture, consumption time profile, contractual supply parameters (contractual power and grid connection parameters) in order to achieve savings in electricity charges. 

As a result of the high penetration of renewable sources and the decentralisation of production sources, grid managers in many countries are now encountering increased instability on the grid and consequent disruptions to services. To limit these impacts and ensure a balance between energy consumption and the amount of power fed into the grid, grid managers can now utilize generation and consumption systems that offer so-called “grid services”, in return for payment, thus increasing the costs for the electrical system.

In order to engage in Demand Side Management, the first requirement is to carry out an in-depth analysis of onsite consumption: this clarifies the peculiarities of each individual site and whether consumption habits can be optimised without resorting to additional instruments. 

Whenever a change in habits is not feasible or simply not sufficient to achieve the desired cost reductions, the on-site installation (prior to the meter) of the following can be evaluated:

  • Batteries (BESS - battery energy storage systems)
  • Renewable source systems (photovoltaic, wind)
  • Cogeneration systems


It will then be necessary to acquire an Energy Management System, which is a dedicated computer system that will: 

  • Monitor and check all the assets involved (consumption site, battery, production systems)
  • Optimise in real time the contribution of the batteries and production systems to cut costs associated with intake from the grid and minimise battery aging
  • Use the assets involved to supply services to the grid.

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