Demand Response in the EU: Market Perspectives & Business Opportunities

On November 19th, 2020, RINNO joined the DELTA Project’s community in their newest webinar on services, market activities, regulatory issues and future business opportunities in EU demand response networks. Similar to RINNO, DELTA is a Horizon 2020-funded project benefiting from the contribution of 10 partners from 8 countries. The project aims to deliver a new energy distribution structure through demand aggregators, single-point centralised asset management and virtual power plant principles. 

Demand Response in Sustainable Renovation

What is demand response and how can we use it to harness energy efficiency in EU building stock? 

DELTA defines demand response as “a change in the power consumption of an electric utility customer to better match the demand for power with the supply that is exercised following a market offer or incentive.” This is achieved using aggregators, or legal entities that aggregate various demand and/or production units in order to optimise energy supply and consumption.

If you’re new to the renovation scene, demand response simply offers consumers the opportunity to play a role in electric grid operations by adapting their electricity usage during peak times to gather financial or other incentives. This then results in a more efficient use of existing power supplies and a more collective view on energy distribution. And no matter the wording, listening to the webinar made it clear that there was immense untapped potential in this particular sector of sustainable construction and renovation. 

Challenges of the DELTA Project

A total of five talks featured in the webinar elaborated on market activities, regulatory issues and future business opportunities for demand response – needless to say, these were all elements of the renovation sector which were impacted by the COVID-19 pandemic. Speaker Apostolos Tsolakis of CERTH made clear that, while the project was already undergoing final integration and testing scenarios and preparing to kick off pilot activities, the virus has forced the team to adapt and make the necessary moves to virtual collaboration. 

But COVID-19 isn’t the only challenge DELTA has had to face. Data, the core of all centralised operations, has proven to be an ongoing issue. Specifically, access to data and data sharing have been observed as key points, along with a lack of standardisation and an overall fragmented market. 

Demand Response Solutions

In order to overcome these challenges, Antonios Marinopoulos, Technical Project Officer at the EC Joint Research Centre, called for better long-term regulatory integration of demand response, namely: 

  • Standardisation and a set minimum of interoperability;
  • Harmonization of market rules and demand response products; and
  • Cross-sectoral promotion and extended market monitoring.

Christopher Kuhl, Sales Director at Kiwi Power, shared insights into similarities between US and EU markets: “Gross penetration of wholesale renewable energy is driving innovation where possible in the US.” It seemed clear that no matter which market, finding the right customer between SMEs, service buildings, multifamily houses and private homes remained the crux of all business models – including demand response businesses. 

Our Key Takeaways

What did we learn from this webinar? That three things must be pursued in order for demand response to reach EU-wide success: 

  1. Reduced transaction costs, achievable through smart contracts or automated flexibility assessments and self-connected assets;
  2. Attractive service packages in energy supply, with dual service and sufficient equipment provision; and
  3. Appropriate target segment identification.

Missed the webinar or just curious for more? Listen in here. Our next report will be on Construction Dive’s webinar (December 9th) offering an introduction to three disruptive technologies revolutionising productivity in the construction industry – robotics / augmented workforce, extended / mixed reality and AI / automation.

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