Energy Weekly Publications #09 Demand Response

27 February 2023

The extensive use of renewable energy sources, due to their unstable electricity generation profile, must be combined with the implementation of appropriate legal instruments encouraging or sometimes forcing market flexibility on the demand side. The process of ensuring the ongoing security and stability of the domestic electricity system should therefore be connected with the so-called demand response.

The recitals of Directive 2019/944 of the European Parliament and of the Council indicate repeatedly the need for a market framework, rewarding flexibility and innovation, in order to adapt the electricity system to unstable and decentralised RES generation. The demand response is therefore one of the key market instruments leading to flexibility in the use of electricity.

According to the government’s draft law implementing the provisions of the aforementioned directive (Draft UC74), a demand response means a change in the end-user’s electricity consumption from its normal or current consumption in response to market signals, including response to time-varying electricity prices or financial incentives, or following the acceptance of an end-user’s offer, made individually or as part of an aggregation, to sell a reduction or increase in consumption at the price applicable on the organised market.

The mentioned aggregation will allow for the cumulation and more efficient use of demand response from smaller electricity final consumers.

According to the draft law, the technical requirements for acting as a demand response and for the participation of consumers themselves should be included in the instructions for the operation and use of electricity networks.

 The demand response will also play a crucial role in, among others, the effective integration of electric vehicles into the electricity grid by enabling their smart charging.

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Marek Grzywacz, Ph.D., Counsel

Paulina Harhaj, Junior Associate