demandreduction

Demand reduction is the deliberate decrease in the quantity of a good or service that consumers, households, or firms consume. In energy policy, the term commonly refers to strategies that lower energy use and peak demand through efficiency, conservation, and changes in behavior, rather than increasing energy supply.

Key mechanisms include energy efficiency standards for appliances and buildings, retrofits of existing stock, better insulation, and the deployment of efficient technologies. Price signals such as time-of-use tariffs, dynamic pricing, and incentives for efficient equipment can encourage lower or shifted consumption. Information campaigns and subsidies for energy-efficient options also contribute to demand reduction, often alongside broader infrastructure or planning measures.

Demand response is a related approach that reduces or shifts electrical load in response to prices or grid needs, frequently via automated controls or customer participation. Together with efficiency improvements and behavioral changes, demand response aims to flatten peak demand and improve system reliability.

Measurement and evaluation focus on absolute energy savings or reductions in peak demand, typically relative to a baseline. Analyses consider rebound effects, cost-effectiveness, and potential free-rider issues, using methods such as metering, pilots, and cost-benefit analyses to assess outcomes.

Policy context emphasizes reducing energy costs, emissions, and energy security while supporting welfare. Demand reduction complements supply-side measures and is pursued across sectors such as buildings, transportation, and industry through standards, incentives, and information programs.