Demand Response: US Experiences, German Challenges, and Market Barriers
At a transatlantic energy policy experts’ forum in Berlin, Andreas Jahn shared U.S. experience with demand response (DR) as a backdrop for addressing the regulatory and market barriers to implementing DR as a system resource in Germany. Experience shows that demand response can cost-effectively reduce grid investments, minimize the curtailment of low-carbon resources, and reduce reliability costs. Mr. Jahn recommends market options and regulatory reforms that capture the value of DR, enable DR resources to bid into energy markets on equal footing with other supply resources, and create the proper investments to ensure flexibility over the long term. He also highlights the system benefits of energy efficiency for the German power sector and suggests ways to more fully tap that potential. These measures will help maintain reliability while meeting Germany’s aggressive Energiewende goals at least cost.