Demand Response: a decisive breakthrough for Europe

| Point of View

How Europe could save gigawatts, billions of Euros and millions of tons of CO2.

The price for electricity in Europe is expected to continue rising rapidly as member states commit to replacing cheap and CO2 intensive fossil fuel generation with low emissions or renewable alternatives, and as prices for fuel continue to increase.

Peak pricing is especially serious as peak demand reaches even higher levels. The competitiveness of European industries is thus in danger, and further predicted increases of peak demand will be a strain on the economy as well as increasing the risk of power blackouts.

To invest in more capacity would be an expensive solution to the above challenges, both for utilities and consumers, requiring heavy expenditure on power generation capabilities, which will most likely be used only a few hours per year. To invest in Demand Response to curb peak load requirements and overall load consumption, would on the other hand present a more proactive and constructive solution.

Capgemini, VaasaETT and Enerdata have partnered to explore the current development of Demand Response throughout the EU-15, to quantify its future potential, and to identify the pre-requisites for the efficient fulfilment of its potential by 2020. The outcome is a dynamic scenario which is ambitious albeit theoretically compelling, and in our view a necessary goal for Europe. In this scenario, our calculations show that Demand Response alone achieves 25-50% of the EU’s 2020 targets concerning energy savings and CO2 emission reductions, as well as pre-empting the need for the equivalent of 150 medium size thermal plants in EU-15.