Demand Response experience in Europe: policies, programmes and implementation

Over the last few years, load growth, increases in intermittent generation, declining technology costs and increasing recognition of the importance of customer behaviour in energy markets have brought about a change in the focus of Demand Response in Europe. The long standing programmes involving large industries, through interruptible tariffs and time of day pricing, have been increasingly complemented by programmes aimed at commercial and residential customer groups. Developments in Demand Response vary substantially across Europe reflecting national conditions and triggered by different sets of policies, programmes and implementation schemes. This paper examines experiences within European countries as well as at European Union (EU) level, with the aim of understanding which factors have facilitated or impeded advances in Demand Response. It describes the initiatives, what is known about the technical and economic potentials, and the policies of various European countries, with in-depth case studies of the United Kingdom, Italy and Spain. It is concluded that while business programmes, technical and economic potentials vary across Europe, there are common reasons as to why coordinated Demand Response policies have been slow to emerge. This is because of the limited knowledge that has been developed about DR energy saving capacities; the high cost estimates for DR technologies and infrastructures; and the policy-makers focus on creating the conditions for liberalising the EU energy markets.