Demand response

Like other forms of traditional flexibility, demand-side flexibility is largely centralised and restricted to large industrial or commercial consumers.

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Key findings

Demand response potential in the Sustainable Development Scenario, 2016-2040

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Enthusiasm for smart-meter deployment has not resulted in market designs and business models necessary to take advantage of the potential flexibility available

Demand-response capacity increased only 4% in 2018, maintaining the average growth rate of the past five years despite vast demand-response potential (equivalent to total annual US electricity demand). Although progress has been made in smart-meter deployment, this enthusiasm has not spread to developing the market designs and business models necessary to take advantage of the potential flexibility available. To raise demand-response growth closer to the SDS level, new markets for flexibility and ancillary services are needed, and existing markets need to be opened to new business models such as aggregation and virtual power plants.