A demand response action plan for Europe


Chris King,
SEDC chairman
Brussels, Belgium — (METERING.COM) — July 31, 2013 – The Smart Energy Demand Coalition (SEDC) has published its “Demand Response Action Plan for Europe”, providing a step-by-step guide for industry participants and policymakers to enabling demand response and other flexibility resources.

Outside of Europe, markets such as Canada, Australia, South Korea and the U.S.A already have significant levels of demand response participation in their markets. For example in the U.S. alone 29.5 GW of flexible load is available, and in 2012 businesses and homeowners earned over €2 billion in direct revenues from demand response over and above bill savings and avoided investment.

In Europe, so far demand response is mostly in the formative stages. It is commercially available in two countries – Britain and France – and a further five countries are also undergoing robust regulatory reviews – Austria, Belgium, Finland, Ireland, and Switzerland. However in the vast majority of member states regulations block consumer participation in balancing, reserves, system services and energy markets, and regulators and TSOs have done nothing or are only now beginning to review their national regulatory structures.

The SEDC guidelines for demand response program development include ten rules encompassed in a four-step process:

  1. Involve consumers
  2. Create viable products/programs
  3. Develop measurement and verification requirements
  4. Ensure fair payment.

“Demand response eases the integration of intermittent renewables and improves network capacity through providing a competitive, reliable and clean source of market flexibility,” commented SEDC chairman Chris King. “It will be central to Europe’s energy transformation. The EC has recognized this fact through its strong support for demand response in the Third Energy Package and the Energy Efficiency Directive.”

The document concludes with a call to the EC to oversee the coordination of regulatory initiatives and the creation of demand response targets at the member state level. These should include logical step-by-step strategies for market development of demand side services and programs, measured and verified against key performance indicators.

Only a planned and coordinated effort can hope to overcome the systematic historical barriers to demand response in which the Commission’s leadership will be essential.