Making demand side response happen: A review of barriers in commercial and public organisations

Catarina Araya Cardoso, Jacopo Torriti and Mate Lorincz

The decarbonisation of electricity systems and the associated increase in variable generation sources requires an increase in power system flexibility. Demand side response (DSR) is widely viewed as a cost-effective source of flexibility, with considerable market potential. To date, the main DSR providers have been energy intensive firms. However, the expectation is that non-energy intensive consumers such as commercial firms and public sector organisations will also provide system flexibility. Despite its DSR potential, commercial and public organisations have received little attention in the literature. This paper helps address this gap by identifying and exploring barriers to the participation of large commercial firms and public sector organisations in DSR through a review of the academic and grey literature on DSR.

Drawing on the literature on barriers to energy efficiency, we use concepts from orthodox and behavioural economics, organisational studies and social practice theory to frame our analysis. The article argues that barriers to participation in DSR exist at the level of the organisation and not only the site. For large commercial firms and public sector organisations, the combination of having small individual electricity loads and complex internal decision-making processes can hinder their uptake of DSR. The hidden costs of participation, issues of bounded rationality and what the energy is used for within different organisations also limit the firms’ ability to participate in DSR.

Banner photo credit: Alireza Attari on Unsplash