Load management involves regulating the demand for electrical power. Typically, this is done by restricting the use of electricity during peak periods of demand, and encouraging consumers to shift their usage to off-peak times. Most power networks operate at a fraction of their capacity during off-peak hours and at maximum only during the relatively short peak hours. Managing the load, or demand, distributes production requirements more evenly over a day. Reacting to demand at the generating level and costly infrastructure upgrades can both be minimized by load management.
Electricity can not be effectively stored in large amounts at a reasonable cost. It must be generated in real time to meet consumer demands. When demand threatens to outstrip a network's capacity, steps are taken to avoid an outage. Additional generating resources must be brought online, electricity must be purchased from outside the network, or the demand must be controlled. Usually, a combination of these solutions is put into effect according to plan.
Bringing backup generating capacity online and purchasing electricity increase a utility's operating costs. Generating plants that are underutilized during off-peak hours also increase costs. These factors also increase the cost to consumers. Load management seeks to distribute demand evenly over time, enabling generating facilities to meet anticipated load requirements while efficiently operating at cost effective levels.
When high demand threatens the stability of a network, load management techniques can directly intervene. Ripple control is one widely used method, sending a signal over power lines to periodically turn off nonessential domestic and industrial loads. In severely stressed networks, nonessential usage might be restricted to only a few hours daily.
Modern versions of this system include a two-way communication capability to precisely target equipment that is in actual use. For example, if ten air conditioners were found to be in use in a neighborhood, the system might shut down each in turn for ten minutes every hour. The houses would still be cooled, but the cumulative effect would be equal to one less unit in operation.
Load management policies are frequently motivated by economic considerations and employ economic incentives. If a network's load is spread evenly over time, a smaller generating plant operating at its most efficient capacity can meet power production requirements. A two-tiered rate system is often employed as part of a load management program to encourage electrical consumption during low demand periods.