Demand response is the changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.

Demand response programs are designed to decrease electricity consumption or shift it from on-peak to off-peak periods depending on consumers' preferences and lifestyles. Actions are generally in response to an economic signal (e.g. energy price, or government and/or utility incentive).

Dynamic demand is similar to demand response but is more defined as a semi-passive technology for adjusting load demands on an electrical power grid. The concept is that by monitoring the frequency of the power grid, as well as their own control parameters, individual, intermittent loads would switch on or off at optimal moments to balance the overall system load with generation, reducing critical power mismatches. As this switching would only advance or delay the appliance operating cycle by a few seconds, it would be unnoticeable to the end user.