EC report paves way for industry’s ‘demand response’ extension request

A request by Greece’s industrial sector for an extension, beyond November, 2017, of its “disruption management” (demand response) measure, an energy cost-saving scheme, appears likely to be approved, judging by the encouraging findings of a European Commission study on capacity availability mechanisms, published just days ago.

The ‘demand response’ mechanism enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

The report noted that real-time response to electricity demand is crucial as this may smoothen out demand peaks and reduce the need for additional grid capacity.

Demand response service providers continue to face major market obstacles, while they are not permitted entry into certain markets, the report noted.

The European Commission expressed concerns that energy consumer demand will remain inelastic despite the importance of elasticity and market equilibrium in markets where wholesale electricity prices fluctuate considerably as a result of the inconsistencies of renewable energy production.

EU member states may be led to introduce demand response measures as a result of such concerns, the report noted.

The total of nine demand response plans implemented in seven of eleven EU member states examined may be justified based on their contribution to short and long-term energy supply, according to the report.