AN OVERVIEW OF LOAD MANAGEMENT

TECHNIQUES IN SMART GRID

Anzar Mahmood, Nadeem Javaid, Muhammad Asghar Khan, Sohail Razzaq
COMSATS Institute of Information Technology, Islamabad, Pakistan
Corresponding author: nadeemjavaid@comsats.edu.pk,
nadeemjavaidqau@gmail.com, www.njavaid.cpm

SUMMARY
Load management (LM) is supposed to have a vital role in future energy management
systems. This article presents overview and comparison of LM techniques along with
related technologies and implementation challenges in smart grid. The article also
covers consumer and utility concerns in context of LM to enhance readers intuition
about the topic. Two major categories of LM techniques, incentive based and dynamic
pricing based schemes have been discussed and compared. Most commonly used
incentive based direct load control (DLC) is elaborated in detail. Dynamic pricing
based energy consumption scheduling (ECS) schemes, featuring peak load reduction
and consumers energy cost minimization at residential level, are also emphasized.
Furthermore, the article incudes a description of dynamic pricing based home energy
management and associated optimization techniques as well as comparison of the
latest schemes.
Key Words
Smart Grid; Load Management; Demand Side; Dynamic Pricing; Direct Load
Control; Home Energy Systems; Consumption; Scheduling

1. INTRODUCTION
Energy is one of the most important components of human life which is present
ubiquitously and can be rendered as soul of modern machine age. Energy
management is important and interesting focus of researchers since decades.
According to international energy agency (IEA), the total primary energy supply of
the world has been increased to 13,113 million tons of oil equivalent (MTOE) in 2011
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as compared to 6,109 MTOE in 1973 [1].The largest amount of energy is consumed in

buildings which is estimated almost 40% of the world total consumption and has been
doubled in 2010 as compared to 1971 [2]. It is the use of energy by the occupants of
the buildings which is usually expressed as per capita energy consumption and taken
as an index for development and prosperity of a country [3].
Electricity is distributed through existing electro-mechanical grid which has been
serving since nineteenth century. Generation of more power to meet ever increasing
demand, which is expected to be doubled by 2020 [4], has many concerns regarding
the limited fossil fuels

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and high carbon emissions. Carbon emissions deteriorate our environment and put a
question mark over global sustainability.
Renewable energy resources are cleaner form of energy; however, the energy density
and technological maturity of the fossil fuels still dominate their use. It is estimated
that the US energy profile will constitute 33% of renewable resources by 2020 with
high penetration of wind and solar power plants [5]. Integration of the huge amount of
distributed generation, usually consisting of renewable resources, to the power grid
has raised many issues [6]. The concept of virtual utility to integrate different kind of
distributed generation to a central energy (heat and electricity) network has been
proposed in [7]. Unpredictable behaviour of these intermittent energy resources has
adverse effects on power system stability.
In beginning, LM procedures were based on unidirectional communication between
users and utilities [8]. These procedures were mainly implemented by the utilities and
the role of users in LM programs were negligible. However, integration of advanced
communication infrastructure enables bi-directional flow of data and power among
different stakeholders of power system and hence allows more efficient LM involving
both utility and consumers [9].
Need to control the demand in order to shape the load profile was first realized
in1970s [10]. Now it has evolved to the concept of demand side management (DSM)
and is characterized by utility operations and incentives for the consumers in order to
bring power usage at desired level at all times. Major objectives of DSM include:
peak clipping, valley filling, peak shifting and deploying new efficient uses [11].
DSM can help the consumers to lower their payments and utility to minimize the need
of peaking plants. Obviously, the utility desires the shape of the load curve to be
balanced with a reduced peak-to-average ratio (PAR) for all the hours while
consumers want reliable energy supplies at minimum cost. In literature, load
management (LM), demand response (DR) and DSM are found as overlapping
concepts and are used interchangeably [12].
There are two major types of LM schemes: dynamic pricing based and incentive
based. Pricing based programs include real time pricing (RTP), time of use (ToU)
pricing, critical peak pricing (CPP), etc. and incentive based programs include direct
load control (DLC), curtailable services, demand bidding etc. [13]. DLC acts only
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when peak demand crosses the certain limit whereas dynamic pricing is an ongoing
phenomenon. Since it is difficult to respond dynamic pricing schemes manually, the
customers need home energy management systems (HEMS) in order to automatically
respond the price variations through scheduling of their appliances for optimal total
cost. Dynamic energy management can be better implemented in smart grid.
The smart grid is an integration of the advanced information and communication
technologies (ICTs) to existing electro-mechanical power systems [11]. Bi-directional
flow of data and power between utility and end users is one of the main characteristics
of smart grid aimed at demand management in an efficient and dynamic way [5].
This article presents an overview of LM techniques in smart grid, the comparison of
these techniques, related technologies and implementation challenges. Most
commonly used incentive based DLC program along with dynamic pricing based
energy consumption scheduling (ECS) at residential level and associated optimization
techniques are elaborated in detail. Rest of the paper is organized as follows. Smart
grid, LM and development of the

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Related technologies are discussed in section 2. DLC and pricing based ECS are
elaborated in sections 3 and 4 respectively. Comparative discussion of LM techniques
is presented in section 5 followed by LM challenges in section 6. Conclusions are
briefed in section 7.

2. LOAD MANAGEMENT IN SMART GRID

Before going to the core discussion of this article, it seems necessary to discuss some
basic dynamics of power system and smart grid which play important role in LM.
This section describes the smart grid basic dynamics in context of energy
management along with consumers and utilities concerns and development of some
related technologies. These topics are elaborated in following subsections.
2.1. Power system dynamics and peak load management
Power system has two basic parameters, voltage level and frequency, which should be
monitored continuously to ensure system stability and reliability. Increasing gap
between demand and supply due to insufficient generation or transmission capability
causes overloading of the system. Consequently under frequency and under voltage
conditions affect the system's stability. In order to control these parameters, two
conventional mechanisms are used in power systems.
First is the excitation system along with automatic voltage regulator to control the
generator reactive power and system's voltage. Second is the prime-mover control
which is used for generator active power and frequency control. In addition to
overloading disturbances, faults may also cause the transients and affect system
dynamics. Moreover, peak load severely affects the power systems economics and
dynamics if not managed efficiently. Peak load management is a major concern of the
electric utilities as peak demand puts stress on system stability, widens the supplydemand mismatch and causes adverse economic effects [14].
Utilities and consumers are two major stakeholders of power system and their main
concerns are highlighted in Figures 1 and 2, respectively. Intuitively, power quality
and environmental effects should be top priorities in order to ensure global
sustainability. However, priority of the elements depends heavily on individual
consumer or set of consumers and may vary in different geographical areas. Smart

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grid is envisioned to better address these concerns. Energy management in smart grid
is briefed in the following subsection.

3. INCENTIVE BASED DLC

LM programs are divided into two major categories: incentive based and dynamic
pricing based schemes. The most prominent incentive based pricing scheme is DLC
which is discussed in this section.
In DLC, the utility takes over the control and has an authority to shut down or cycle
consumers electrical appliances (depending on the contractual terms). Incentive
based LM programs like DLC pay the incentive money to the consumer for the time
which they are asked to reduce or shutdown the load on short notice during peak
period [30], [31].

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