Flexibility Working Group


Flexibility Working Group

Chairman: Laurent Schmitt and Rodolphe de Beaufort, Think Smartgrids

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About the Working Group:

In this report, the Flexibility Working Group 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.

Key Findings:

  1. Demand response is happening in all parts of the world in regions with very different market
    structures
    Based on the responses and discussion in this report, we can conclude that demand response is one of the main priorities
    for drastic reforms of the energy system in different parts of the world. However, we observe that demand response is being
    performed in liberalized and unbundled systems as well as in regulated systems (e.g. Taiwan). In America, Europe, and Asia
    we find regions with more and less advancement towards integrating demand response in the market.
  2. Involvement of small consumers is hampered by lack of adequate measurement and verification
    mechanisms
    No region or country has reported that dynamic pricing schemes are existing outside pilot projects. In general, involvement
    of the smaller end consumer is one of the major challenges tackled in research and demonstration projects. Commercial
    deployment is hampered by lack of measurement and verification mechanisms. This often relates to smart meters, but also
    in countries where the smart meter rollout is close to completion, such as Norway, we expect the introduction of hourly
    prices in the coming years.
  3. Market regulation often presents a barrier for demand response
    Many of the countries reported that regulation is not always supportive for the integration of demand response. In
    Asia, several countries are in the process of reforming their market to a more liberalized structure, opening the door for
    independent aggregators to contract flexible sources. In Europe, the countries have a liberalized and unbundled structure,
    however even then access to certain flexible market products may be restricted to demand sources, due to a large minimum
    bid size or a symmetry requirement for up/down regulation, favoring conventional generation flexibility.
  4. Customer engagement and dynamic pricing studies are important topics of demonstration
    projects
    A lot of demonstration projects report investigating dynamic pricing and customer engagement, i.e. how to best approach
    the smaller customers and how to technically communicate energy information and their impact on the market. What
    appears to be covered less in research and demonstration projects worldwide is the usage of demand response for local
    grid management by the DSO.