Demand response (DR) programs have been utilized around the globe for decades as a costeffective resource for maintaining a reliable electrical grid. By reducing load during a limited number of hours per year, DR can defer the need for new peaking capacity, reduce peak period energy costs, and lessen transmission and distribution (T&D) infrastructure investment needs, among other benefits.
In the United States, for example, a five percent reduction in peak demand through DR programs could lead to $35 billion in savings over a 20 year period. If anything, this is a conservative estimate. A 2009 study commissioned by the Federal Energy Regulatory Commission (FERC) found that, under certain market conditions, peak demand in the U.S. could be reduced by two to four times this amount, effectively eliminating the need for the equivalent of between 1,000 and 2,500 peaking units.