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Cracking Demand-Side Flexibility: Can You Decarbonize While Assuring Power System Reliability?

image credit: Demand-side flexibility
Rauf Fattakh's picture
Managing Director & Co-founder, Prospero Events Group

Helping decision-makers in the European energy industry benchmark best practices by organizing peer-to-peer conferences since 2007.

  • Member since 2020
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  • Mar 15, 2021

Electrification combined with increasing penetration of wind and solar energy poses risks to the power system's reliability. Intermittent renewables - new challenges! Because consumption must follow generation now. So when supply-side flexibility is difficult, how do you manage demand-side flexibility (DSF)?

DSF Types

Load, demand-side generation, and storage shape the DSF.

Consumers have different preferences and habits.

You can divide the types of DSF by consumers who:

A) move their electricity consumption to another time;

B) reduce their electricity consumption;

C) increase their electricity consumption.

''A'' consumers are typically the ones who can't avoid but can move electricity consumption to another point in time. Usually, such usage relates to heating, charging electric vehicles, and using household appliances.

''B'' consumers can reduce their electricity use during high price hours temporarily. Typically, industrial companies opt to this way to decrease production when the electricity price is too high.

''C'' consumers increase electricity their demand during low price hours, without reducing consumption later. These customers usually their type of heating from one fuel to another.

Wag the Dog: Smart Metering

Smart metering installment across Europe is a critical prerequisite in enabling DSF today.

Smart meters allow hourly metering. Advanced metering helps to get real-time values to control energy use.

Can you see the ''wag the dog'' analogy when consumers (tail) have become more intelligent than the generation (dog)?

But still, different market players (utilities, smart home technology providers, telecoms) need to align. How do we avoid the translation of data between the distinct players? Thus to assure they need to work towards ''one language''.  Also, it's no longer about finding standards but about defining a combination of standards to make architecture for seamless data flow.

Regulation, Regulation, And Regulation

Stimulations like Totex Incentive Mechanism (U.K.) and E.U.'s Clean Energy Package are key regulatory drivers for DSF. They encourage efficient usage of flexible resources such as demand-side response (DSR) or storage. However, regulations remain a crucial challenge for the majority part of Europe.

DSF can be achieved when you allow system operators to control or send price signals to various electricity demand sources. Consumers then adapt their behavior to save energy costs either automatically or manually. In a normal state of transmission and distribution grids, markets and products accessible for DSF look as follows:


The key barriers that deserve E.U. level intervention:

  • system requirements in current network codes may hinder the participation of small-size flexibility services providers.
  • limited standardization and harmonization at the E.U. level in the aggregation framework.

Connecting Dots

To utilize DSF, you need to find flexibility service providers for the price. Markets still lack enough liquidity. How do you make sense of it all? The best way moving forward is to benchmark best practices with your peers from top utilities who are experiencing balancing challenges today.



When will DSF become wide-spread? It takes time to change behavior. One of the critical elements moving forward is to communicate the features of DSF to various market segments. Clarity will help consumers to make well-informed decisions faster.



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Rauf Fattakh's picture
Thank Rauf for the Post!
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