Demand response is the process of managing customer consumption of electricity in response to supply conditions. This relationship is determined through the regulator. It is divided into two programs of incentive-based demand response and time-based demand response. Penalties are given out for customers in case of no response to load reduction. The power market regulator sets the rules in concern to the demand response programs. The purpose is to prove the capabilities of self-organizing maps to identify customers and their response potential to distributor or customer electrical demand databases.
Economists believe that real time price programs are the most competitive and efficient demand response programs and should be the focus of policy makers. The most important part of this program would be giving the best price program to anyone willing to participate. The introduction of direct response into electricity networks can reduce fluctuating electricity prices and can work as a check against generator market power. It also can increase the reliability of the grid.
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