Obstacles to demand response: Why industrial companies do not adapt their power consumption to volatile power generation

Christina Leinauer, Paul Schott, Gilbert Fridgen, Robert Keller, Philipp Ollig and Martin Weibelzahl

Energy Policy, 2022, vol. 165, issue C

Abstract: Various flexibility options in power systems, such as storage, grid expansion, and demand flexibility, gain increasing importance to balance the intermittent power supply of renewables. On the demand side, especially the industrial sector represents promising potential for Demand Response, i.e., the alignment of its power demand with the current power supply of renewables. However, there exist various obstacles that currently prevent companies from investing in new or (fully) exploiting existing flexibility potentials. In this paper, we investigate how economic, regulatory, technological, organizational, behavioral, informational, and competence obstacles pose barriers for companies to adjust their power consumption flexibly. For this purpose, we combine both a structured literature analysis and a case study. For the case study, we conduct 16 interviews with energy experts from companies from different industries. Our findings reveal that due to technical risk of disrupting the production process, lacking revenues, and too low cost savings, companies do not flexibilize their power consumption. Moreover, in particular, contradictory legislative incentives and missing IT standardization and interoperability represent key obstacles. Therefore, our results constitute a basis for targeted policy making in order to foster the exploitation of (existing) flexibility potential of industrial companies on the demand side.

Keywords: Demand flexibility; Demand-side management; Demand response; Industrial sector; Obstacles for demand flexibility; Case study research (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:165:y:2022:i:c:s030142152200101x

DOI: 10.1016/j.enpol.2022.112876

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