Demand-Side Flexibility for Energy Transitions: Ensuring the Competitive Development of Demand Response Options

Abstract

Demand response (or demand-side response) involves temporary changes in electricity consumption, typically in response to price signals or other financial incentives, or in reaction to grid conditions, is expected to cost-effectively contribute to the much needed power system flexibility, and help improve the efficiency of generation of transmission networks. While demand response has gained traction among diverse stakeholders in the electricity industry in some countries, widespread uptake of demand response, especially by consumers and load aggregators, remains slow due to uncertainties and various types of barriers, whether economic, technological, social or regulatory. Adopting a risk governance approach to demand response deployment would be useful to unlock certain barriers and assess to what extent demand response can reliably contribute to power system flexibility.