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Demand response status in EU Member States

Paolo Bertoldi
Paolo Zancanella
Benigna Boza-Kiss
Policies and Targets
Urban Areas
Transport and Mobility
Energy Generation and Distribution

This report reviews the current status of European Member States’ regulation supporting Demand Response and Aggregation in the wholesale, balancing and ancillary electricity markets, as stipulated in Article 15 of the Energy Efficiency Directive. Demand Response is able to increase the system’s adequacy and to substantially reduce the need for investment in peaking generation by shifting consumption away from times of high demand. It can act as a cost effective balancing resource for variable renewable generation. Adding stability to the system, it lowers the need for coal and gas fired spinning reserves – most running power plants burn fuel continuously in order to be ready to supply power at short notice. It furthermore decreases the need for local network investments, as it shifts consumption away from peak hours in regions with tight network capacity. Demand Response delivers these benefits by providing consumers – residential, commercial or industrial – with control signals and/or financial incentives to adjust their consumption at strategic times. New insights on key success criteria for Demand Response which are in line with and benefit from, Europe’s competitive market design are discussed in the report. A unique European Model begins to emerge. Positive developments in Member States have been evaluated and those who have looked to enable Demand Response are succeeding, despite continued barriers and remaining issues