1.
The Development of Demand
Response in Europe
Smart Grid Technology Conference
June 2010
Jessica Stromback
VaasaETT Global Energy Think Tank

2. A unique Collaborative Concept incorporating a
Global Interactive Expert Community with
Collaborative Projects

4. Presentation Content
‐ Central Position of Demand Response for Europe
‐ Regulatory Background – European Commission
‐ Resulting Content and Focus of DR Activities
‐ Drivers and Barriers
‐ Overview of National Levels of Development
‐ Examples of Current Programmes & Pilots
‐ Changes at the Top

5. Definition of Demand Response
•Any program which communicates with the
end consumer and either enables them or
encourages them to lower or shift energy
consumption during periods of raised energy
prices.
Tools
•Feedback, direct & indirect
•Automation
•Dynamic Pricing

6. Central Position of Demand
Response For Europe

7. VaasaETT,
Capgemini,
Enerdata
(2008)
The Potential of Residential and Commercial DR and Feedback
Programs in the EU 15 Member States

8. .

9. Current Regulatory Framework
• “Provide for the possibility of using energy
efficiency and demand‐side management as
alternatives to new supply and for environmental
protection” Energy end‐use efficiency and energy services directive 2005
• “Member States shall ensure the
implementation of intelligent metering systems –
subject to an economic assessment”
2006/32/EC2006/32/EC Article 13 & 3rd Energy Package
•“ The consumer should be provided with
information on actual consumption often enough
to enable customer to regulate his own energy
consumption” 2006/32/EC2006/32/EC

10. Development Path of DR in Europe
Residential
Residential DR Commercial DR
Smart Grids
Feedback
Applications
Wind Micro‐generation,
Customers
SM Rollout Generation aggregation,
rights to
Program Capacity financial market
Develop shortages models
Lower
ment Network
Consumption
Shortages

11. DR Drivers in Europe for Retailers
1. European Commission ESD* Article 13
2. Technological ability
3. Intermittent renewables/ Wind Generation
4. Increased Switching Rates
5. Number & intensity of peak consumption hours
6. Lowered capacity margins
7. Threat of stricter CO2 regulations
8. Successful pilots
*Energy Services Directive

12. 1. Technological ability Country Status
Residential market Denmark Discussion
Sweden Completed
Completed – Mandated -
Finland 80% 2014
Discussion –
Postponed/Complications Norway 2015 (approx)
Netherlands Postponed
France 2012‐2017
(approx)
Germany Postponed
SM Italy Completed
Portugal Postponed
Spain 2018
Austria Discussion
Belgium Discussion
UK Mandated
Greece Postponed

13. 2. Increase of Wind Generation Country % 2008
Dark Green= 10%+
Green = 4-10 % Denmark
Sweden
19
1
Yellow= 1-4 %
Grey = 0-1%
Finland .25
Norway 1
Netherlands 4.5
France 1
Germany 7
Italy 1.5
Portugal 8.5
Spain 9
Austria
Belgium
3
5
UK 1.5
Greece 3

14. Wind Generation

15. 2. Increase of Wind Generation Country % 2020
Wind is the fastest growing form of generation in Denmark 30+
Europe –
Sweden 10+
Dark Green= 10%+
Green = 4-10 % Finland 10+
Norway 5+
Netherlands 10+
France
Germany
10+
15+
Italy 10+
Portugal 15+
Spain 15+
Austria 5+
Belgium 10+
UK 10+
Greece 10+

16. Real Capacity Margins 2008
•
Low Local network capacity Country % 2008 *
Real capacity margin = 0% or Denmark 12
less
Real Capacity = + 5% less Sweden 17
brown
None Finland ‐3
Norway 12
Netherlands 0
France ‐ 6
Germany 2
Italy 5
Portugal 5
Spain 8
Austria 26
Belgium ‐8
UK 2
Greece ‐3

17. Switching – Improve Competitive Edge
DR lowers retailer risk – switching
increases that risk

18. Customer Switching
Country Switching %
Grey = 0-3% 2008
Yellow = 3-5%
Green = 5-8% Denmark 3
Dark Green = 8%+ Sweden 9
Finland 5
Norway 10
Netherlands
France
9
2.5
Germany 7.5
Italy 2
Portugal .5
Spain 2.5
Austria 2
Wal: 10,2 FL:4,17 BRU:
Belgium 2,89
UK 19
Greece .1

19. Past and Current Pilot Studies
Increasing Body Successful
Experience

20. Experiential Learning Theory
Concrete Experience
Active
Active Observation
Experimentation
E. Kolb Abstract
Comprehension

21. Feedback – Energy Efficiency
Starting place for Europe
Average % Lowest % Highest %

22.
Drivers:
Low Capacity Margins
High Peaks in
consumption
Wind generation
Retail market competition

23.
Market
Readiness for
DR Activity
•Moving Target
•Program sensitive
•Commercial
•Residential
•Automation
•Pricing
•Feedback

24. Sample: Current Rollouts and Program
Developments in Europe

25. Ambient and Informational Feedback
Technology/ Utility Partnerships Growing:
• Scottish and Southern – ONZO
• British Gas – Green Energy Options
• Nuon, Fortum, EDF, Enel …..
onzo
Interactive
Institute Yello now
Enel Has 1.5 million
customers
CER GEO
Feedback is at National Rollout stage in several countries

26. Dynamic Pricing and Feedback
Pilots
Commission For Energy Regulation Ireland
5,375 Residential Electricity Customers
1,995 Residential Gas Customer
778 SMEs
35% Take up rate
Testing:4 different TUO Rates
Rewards overall energy reductions
In House Displays
Informative Billing
Educational material
Website
Rewards overall energy reductions
Trial Period: June 1st 2010 – May 31st 2011

27. Home Automation
SEAS-NVE - Panasonic Partnership
Plans to offer home automation systems to entire Danish
customer base. (400,000 households)
Includes:
Feedback + Automated Lighting, gas and electric heating, intelligent appliances,
heat pumps + micro-generation and battery storage.
Systems Capabilities:
•Efficiency
•Demand response
•Micro generation
•Electricity storage

28. Smart City
Smart cities are now located in: France, Germany,
Sweden, Denmark, Norway, UK …
Example: ABB & Fortum partnership Smart City Sweden
Programs include: Energy efficiency measures and
automation in public buildings, public contest, increased
efficiency in public transportation and lighting, Public
education, education about food and transport, Infrastructure
for electric cars, integration of renewable generation….
Budgets range from €30 to 100 million

29. Market Barriers:
Customer communication,
Regulation,
Cost/Benefit Challenges
Lack of knowledge – Utilities & Governments
Financial markets
Market Barriers ‐ Energy Managers
Findings from interviews and survey:
‐ 27 Interviews with utility managers
‐ 86 responses to international survey

30. Demand Response Barriers

31. Sample of Current Government Initiatives and
Projects
Norway: Smart City Project and Research Centre – Oslo
• Demonstration: Demand Response, Renewables, Energy
Efficiency
• 10 Year commitment to build and experiment with financial
market structures for Smart Grid
ICT for Energy: Methodologies for Measuring energy efficiency and
demand response
Three Stages
Global Benchmark of ICT’s energy saving capability
Smart Grids CO2 Reduction Potential From Europe

32. Current EUC Initiatives and Projects
Joint Research Centre EUC:
Country by Country measure of potential of Demand Response for Europe
to increase efficiency and balance planned wind generation
Schneider, VaasaETT
Smart Grids Technology Platform DG TREN:
•TSO/DSO Group : Demonstration projects €1.2 billion
•Retailer Group: Demonstration and research projects for €1.3 billion*
Includes international participation – PLMA
•Regulators Group
•Demonstrations of complete Smart Grid Rollout – Central Generation to
energy consumer feedback
•Interest Groups: Technology providers, ICT, Micro Generation, Retailers,
Aggregators, TSO, DSO….,
* Will be requested

33. THANK YOU!
Jessica Stromback
VaasaETT Global Energy Think Tank
+358 40 72 56 023
jessica.stromback@vaasaett.com