In terms of electricity production, a certain blend of technologies is expected to meet the different needs of modulation.
Some technologies are used as the basis of the consumption profile and provide a “ribbon” of production that is not designed to be modular: the technologies particularly suited to the production of this “ribbon” are hydro over water or nuclear. They also include such technologies as solar and wind power.
Other technologies provide a necessary complement during high consumption season, for example, winter in temperate countries. The thermal power stations (gas or coal) are suitable for this purpose.
Finally, the most flexible technologies allow final adjustments for short and possibly frequent periods: hydro power, PSPS (Pumped Storage Power Station) and again coal-fired or gas-fired power plants.
As a consequence, the reduction of peak electricity demand means a lower use of the most flexible technologies.
Apart from a few countries such as Sweden or Switzerland whose electricity production is widely based on hydropower, reduce peak therefore means less use of gas fired power plants or, worse, coal-fired power plants, emitting CO2.
An additional possible benefit to demand response programs!
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