The difference between demand and consumption is one the most important concepts in power industry. It’s more important for generation side than consumption side. To clarify this concept, let’s take a look at the examples below:
Imagine you’re at the gym and your trainer asks you to lift five 20kg dumbbells 1m higher from the ground. You do the movement five times and you can calculate your consumed energy readily. 5×20(kg)x10(N/kg)x1(m)=1000(J). After this achievement , you see a 1000kg dumbbell and do a quick math like, 1×100(kg)x10(N/kg)x1(m)=1000(J), and you decide to move 100kg dumbbell and obviously you fail! And your trainer gives you piece of advice “Son, you’ve got enough energy to do that but you should be ‘Stronger’ to be able to move 100kg at once”. Consumption is the total energy you use to move all the dumbbells and demand is the heaviest dumbbell you are supposed to move.
To be more scientific let’s go back to electrical dimensions. Let’s assume you have a 100W lamp and you turn it on for an hour, So you’ve consumed 100(W)x1(h)=100(Wh) of energy. Now you change your 100W lamp with 200W lamps and you turn it on for half an hour, So 200(W)x0.5(h)=100(Wh). In both cases you have consumed same amount of energy but in case of 200W, you need a power supply with twice power of first case. We can say second case “Demands” us more peak of supply but both cases use same amount of energy. Of course you have noticed that demand is measured by W and consumption is measured by Wh.
In first paragraph I mentioned that demand and consumption difference is more important to the generation side and here’s “why?”. The generation side should be able to generate as much as it covers demand, not only consumption. So every single kiloWatt increase in demand may compel the generation side to launch a new power plant, while we can distribute the increase in consumption(kWh) in 24 hours of a day without any necessity for new power plant.
Because of the costs of growth in demand for the generation side, there are different rates of electricity for various kinds of costumers like residential or industrial. Residential consumers only pay for their consumption because they mostly have the same demand and they can’t force any disruption to the network. But there is different story for industrial consumers. Since they have huge electrical devices, they can effectively affect the demand of the network, so industrial consumers should pay for two parameters, their demand (peak power) and the consumption.
In conclusion, demand should be maintained by launching new power plants while consumption can be controlled by dividing it into smaller parts in different hours of a day. So generally, the generation side tends to avoid growth in demand and instead offers us many solutions about make the power profile even.
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