1. Introduction

Power systems are under a period of rapid evolution. The integration of renewable energy sources (RES) is necessary to achieve the Climate Change objectives [1], but it requires new solutions and more flexible power systems to achieve it at a reasonable cost [2]. A decentralized and dynamic paradigm is replacing the old centralized and rigid one [3,4]. Now, operators use all kinds of flexible resources to preserve balance, ensure the security of supply, and improve the efficiency of the system. New flexibility resources as Demand Side Management (DSM) require operators and policymakers to work together to create the appropriate legal and economic framework [5] and to establish the terms of flexibility.

Demand Side Management (DSM) refers to planning, implementing, and monitoring the use of electricity to generate changes in the consumers’ demand profile to adapt to different needs [6,7]. DSM solutions are a valuable tool to smooth demand peaks [8], avoid blackouts, reduce investments on the grid [9] and absorb fluctuations of Renewable Energy Sources (RES) power output [10]. Nevertheless, these uses were marginal since power systems treated consumers as passive agents without the capacity to modify their loads and relied on the flexibility of fossil generators [4]. But now, when flexibility needs arise due to RES variability [2,11], thanks to the advances in Information and Communication Technologies (ICT), DSM counts as necessary infrastructure to fully participate in the system flexibility throughout Demand Response Products (DRP) [12,13].

Demand Response Products (DRP) are not new; many countries have used this kind of program to accommodate them through the years with satisfactory results. The use of Demand Response (DR) was mainly set to avoid extreme and rare events as system blackouts and severe grid conditions to reduce grid decay [14]. Nowadays, the advances in ICT shows that DR has greater reliability to provide flexible services to the system than conventional generators [15]. First, DR can have lower costs than other flexible resources and can provide economic profits to the system as a whole and the consumers that provide it [16,17,18]. Second, DR presents an on-site solution to enable efficient integration of Distributed Energy Resources (DERs) that activate new market agents and open new business opportunities [19,20,21]. Third, DR can provide cheap and reliable Ancillary Services (AS) that were exclusively provided by generators, and as well as other consumer-based solutions, can help to reduce market power [22].

This entry is adapted from the peer-reviewed paper 10.3390/en14040846