Review and assessment of market, policy and stakeholder participation in energy flexibility of buildings

There is a large potential for improving resilience in energy grids, postpone grid extension or enforcement, increase utilisation of renewable energy sources and reduce CO2 emissions from energy production by harvesting end users’ energy flexibility. Demand-side flexibility is the capacity to change energy usage and local production from normal or current consumption patterns in response to local climate conditions and grid requirements, the latter normally encouraged by changes in the price of energy over time or economic incentives (e.g. contracts with payment for offering demand flexibility). These price changes or incentives can be energy grid and market related. Energy grid operators may provide customers with grid related signals to manage net overload, minimise emissions from energy production or postpone enforcement of the grid. Price signals from the market can come from the wholesale market, e.g. day-ahead or intra-day markets. Suppliers or other commercial parties (such as aggregators that collect small quantities of end-user flexibility and give those aggregated volumes a value on wholesale markets or as ancillary service) may provide customers with price signals, e.g. when wholesale prices are very low or extremely high. The success of energy flexibility among consumers is likely to be defined by a combination of the willingness of consumers to respond to signals actively, and the availability of smart devices, smart systems and smart buildings to allow automated controls.<br/><br/>This document reports the findings from our collaborative, international comparisons of the state-of-the-art of energy flexibility within different countries around the world. Our focus has been on policy and regulation, price-incentive structures, business models and key factors influencing customers’ willingness and possibilities for taking part in energy demand flexibility.