Econonomics of Energy and Environmental Policy

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Demand Side Response: Patterns in Europe and Future Policy Perspectives under Capacity Mechanisms

Demand Side Response (DSR) has been slow to emerge in European electricity markets. This paper aims to both examine the reasons for low levels of DSR in Europe and reflect on factors that might affect the participation of DSR in capacity mechanisms. It relies on available evidence from the literature, secondary data on existing DSR programmes and energy aggregator's data from industries participating in DSR. Findings show that changes to the duration of contracted loads under existing or new programmes might increase the penetration of DSR. The introduction of capacity mechanisms may increase DSR from demand turn down if longer response times were available.
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JEL Codes:D12: Consumer Economics: Empirical Analysis, O31: Innovation and Invention: Processes and Incentives, L94: Electric Utilities

Keywords: Capacity Mechanisms, Demand Side Response, European Electricity Markets

DOI: 10.5547/2160-5890.3.1.jtor

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Published in Volume 3, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


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