Regulation as an enabler of demand response in electricity markets and power systems

Abstract

The reduction of environmental impacts of electricity use and the transition to renewable power generation crucially depend on demand response (DR). This article takes the political commitment to DR as a starting point and empirically examines Finnish stakeholders’ views on barriers to the utilization of DR and the ways in which these barriers could be overcome. The analysis is based on surveys of Finnish electricity retailers and distribution system operators (DSOs), a survey of a wider range of energy specialists, and a follow-up workshop of the latter survey. According to the participants, the main barriers are related to customer engagement and DR automation. Thus, the proposed solutions focused largely on end-user incentives and obligations as well as technical issues. Especially the latter topic would benefit from regulative measures such as standardization of appliance interfaces, whereas changes in electricity tariff structures may take place either through normative changes by the retailers and DSOs or through regulation.