Applications of Electricity Demand Response
Price-based DR means that consumers adjust their electricity demand accordingly to the price signals they receive, including time-of-day, real-time and peaking tariffs.
Incentive-based DR means that the DR implementing agency establishes policies based on the supply and demand conditions of the power system, and users receive direct compensation or preferential tariffs for other time periods by reducing their electricity demand during times of system need or power constraints, including direct load control, interruptible load, demand-side bidding, emergency demand response, capacity market programs, and ancillary services programs. Participating customers generally receive incentives in two ways: direct compensation independent of existing tariff policies; and discounts on top of existing tariffs. Before the implementation of the demand response program, usually the DR implementing agency has to sign a contract with the participating users in advance, in which it is agreed on the content of the demand response (the size of the load reduction and accounting standards, response duration, the maximum number of times of response during the contract period, etc.), the time of advance notification, the standard of compensation or tariff discounts, and the penalties for breach of contract.
The term in the supply chain refers to the response of a logistics company to meet customer demand during the logistics service process, with the aim of improving the operational efficiency of the supply chain.