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Demand side management is attractive to a utility chiefly because it can

  • A.remove the need for any spinning reserve
  • B.defer or avoid investment in generation and network capacity
  • C.increase the total energy the utility sells
  • D.reduce the tariff that the regulator is prepared to approve

Answer: B

A peak reduced by a hundred megawatts is a hundred megawatts of plant, transmission and distribution that need not be built, and the avoided cost is what the programme is judged against. It usually reduces sales, which is why the regulatory treatment matters.

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