Electricity demand changes in predictable patterns

System operators must match electricity supply to demand in real time, with very tight tolerances. Demand on a system can change throughout the day as well as throughout the year. Wholesale electricity prices generally rise with increasing demand levels as more expensive generation is brought online to meet demand.

Changes in electricity demand levels are generally predictable and have daily, weekly, and seasonal patterns.

• Daily patterns: Demand levels rise throughout the day and tend to be highest during a block of hours referred to as "on-peak," which usually occurs between 7:00 a.m. and 10:00 p.m. on weekdays.
• Weekly patterns: Demand levels are generally lowest between 10 p.m. and 7 a.m. and on weekends. This is usually referred to as "off-peak".
• Seasonal patterns: Demand levels during the summer and winter months tend to be higher than demand levels during the fall and spring "shoulder" seasons when system demand for space conditioning (heating or cooling) is low. The annual peak of hourly, daily, and monthly demand typically occurs during the winter or summer.

The animation shows that the 2011 year-to-date hourly, peak demand in ISO-New England occurred on July 22, at 3:00 p.m. Expected peak demand drives investment and contracting decisions for capacity resource planning.

Wholesale electricity prices reflect the operational stress of meeting these periodic increases in demand. Also, unexpected increases or decreases in demand can have dramatic effects on real-time, wholesale markets.