The role of electricity demand-side flexibility (DSF) and policy implications for China

The two central challenges of decarbonizing the world’s energy systems are the integration of intermittent renewable sources of electricity and the electrification of demand including transport, buildings and industry.

This policy brief addresses the question of how these challenges can be turned into opportunities for consumers that help meet those two challenges, through electricity demand-side flexibility (DSF). DSF is the means by which consumers vary their net demand for electricity from the power system in return for financial gain or for other reasons.

Key Messages:
  • Demand-side flexibility is now essential.
  • The potential for DSF is significant for both large consumers and small ones.
  • There are, however, significant barriers to DSF, especially for small consumers.
  • Enabling DSF requires new policies and market arrangements, technologies, business models and experimentation.
  • UK and international experience are relevant for China.
  • There is a need to better understand consumer preferences.
  • DSF is a win-win-win opportunity to reduce costs, grow business opportunities and empower consumers.

This Policy Brief is based on research carried out on a project – Flexible Demand to Integrate Intermittent Renewables – funded by the UK Foreign, Commonwealth and Development Office (FCDO) under their China Prosperity Fund: Energy and Low Carbon Economy Programme (CELCEP). This Policy Brief is a deliverable of that project.