Demand Response Status and Initiatives around the World

After the new emission targets of the COP21 summit last year, many countries in the world are making a serious effort
in reducing greenhouse gas emissions by integrating more renewable energy sources in their system. However, this is
not straightforward, as important sources of renewable energy, such as solar power and wind, are inherently variable
and difficult to forecast. Therefore, there is an increasing need for flexibility in the system to compensate for the variable
output of renewable energy generation. Traditionally, flexible gas turbines are used to maintain the stability of the grid.
However, with increasing shares of renewables and hence increasing flexibility needs, back-up gas turbines might not be
the most cost effective or sustainable option. Other alternatives such as pumped hydro storage are used to cover periods
with high demand or few renewable energy production, however in some regions the availability of this storage source is
geographically limited.

Therefore, an interesting alternative is to shift the peak demand to periods with more renewable production like solar power.
In fact, demand sources have been proven to be a fast responsive, reliable and cost effective alternative to conventional
generation flexibility. Today, flexibility at the demand side is becoming an essential part of the energy system.

The ability to spread flexible demand in time can have many different applications. First, the customer can use it to reduce
its energy bill by consuming only at periods with low prices. Currently, this is usually reserved for large industrial consumers
connected to the wholesale market. Similarly, a so-called Balancing Responsible Party (BRP) can shift demand to balance his
portfolio in case e.g. his wind generation is producing less than expected. In addition, the flexible demand can be offered
to the system operator, either ancillary services for the Transmission System Operator, either local grid management for
the Distribution System Operator. Depending on the market model in the region in question, the flexible demand can be
contracted commercially by an independent aggregator, or by the utility.

In this report, the global smart grid federation presents the status of demand response integration in different parts of the
world. The contributions from the Global Smart Grid Federation regions consist of several parts:

  • Some short information of the market model of the country or region in question. In this report we limit ourselves to
    some basic issues, for more information in Europe for instance we can refer to the report of the Smart Energy Demand
    Coalition .
  • Which barriers towards implementation of demand response and dynamic pricing schemes exist in the region.
  • A few important research and demonstration projects on demand response and dynamic pricing.

This information is given for several countries, where the energy system is often very different (regulated vs. liberalized,
unbundled vs. vertically integrated, etc).

You can download the report here: Demand Response Status and Initiatives around the World