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30 August 2016

SEDC puts forward recommendations on demand-side flexibility

The Smart Energy Demand Coalition issued a whitepaper to help the EU increase its demand-side flexibility portfolio to maintain a balance between demand and supply.

The paper, Monitoring Demand-Side Flexibility, analyses the potential and current market uptake of demand side programmes in the European energy sector.

Demand-side flexibility assists consumers to change their consumption patterns in line with varying market signals.

The segment comprises grid assets and measures such as smart meters, energy efficiency and demand response programmes.

Adoption of demand-side flexibility measures

The paper provides recommendations on how the EU can measure the level of adoption of demand-side initiatives.

In addition, it provides a roadmap on how the region can increase its adoption of demand-side flexibility platforms by implementing measures adopted by other regions - particularly North America.

According to the Coalition, “The engagement of consumers to the benefit of the whole system will only be made possible if the correct governance tools are put in place.”

However, for the EU to adequately govern its demand-side market, the region has to have a clear and accurate understanding and view of the market landscape.

Therefore, “[In order] to implement appropriate regulatory measures to accompany the development of Demand Side Flexibility, it is essential for EU institutions to set objectives and to be able to track the progress on the ground,” adds the paper.

The Smart Energy Demand Coalition (SEDC) states that the measures used to indicate the level of adoption of demand response and energy efficiency measures should monitor both explicit and implicit demand-side flexibility.

In measuring explicit demand-side management, the indicators should monitor capacity contracted and volumes sold into various markets in order to have insight into the share of demand-side flexibility in each segment of the energy market.

Explicit demand-side flexibility are incentive driven measures implemented and facilitated by an aggregator to help consumers save energy and lower costs.

The indicators measuring this type of market should capture the participation of demand-side flexibility in the wholesale, balancing, system support services and reserves markets.

For the balancing and reserves markets, the figures should be provided by transmission system operators, while for the local system support services, monitoring will be done by distribution system operators.

Benefits of implicit demand-side flexibility

On the other hand, implicit demand-side flexibility should be measured by an estimation of the capacity (MW) and an analysis of the volumes available through it. This type of flexibility is achieved when consumers react to price signals willingly by using an automatic solution or by personal choice.

The measurement of implicit demand-side flexibility would also provide utilities with insight into the number of consumers using smart meters, and amongst them the percentage of consumers who would have signed up for real-time pricing. [Demand response: UK could save GBP1bn by shifting use].

This would provide utilities with a methodology to assess consumer behavior.

More importantly, the organisation states that the EU should set a 10% peak demand-side reduction target for its member states for explicit demand-side flexibility.

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