Demand Response status in EU Member States Paolo Bertoldi Paolo Zancanella Benigna Boza-Kiss 2016 EUR 27998 EN This publication is a Science for Policy report by the Joint Research Centre, the European Commission’s in-house science service. It aims to provide evidence-based scientific support to the European policy-making process. The scientific output expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of this publication. Contact information Paolo Bertoldi Joint Research Centre, Via E. Fermi 2749. Ispra 21027. Italy. Email: [email protected] Tel.: +390332 78 9299 JRC Science Hub https://ec.europa.eu/jrc JRC101191 EUR 27998 EN PDF ISBN 978-92-79-59818-0 ISSN 1831-9424 doi:10.2790/962868 Print ISBN 978-92-79-59817-3 ISSN 1018-5593 doi:10.2790/354290 © European Union, 2016 Reproduction is authorised provided the source is acknowledged. How to cite: Bertoldi P, Zancanella P, Boza-Kiss B.; Demand Response Status in EU Member States; EUR 27998 EN; doi:10.2790/962868 All images © European Union 2016 except those used on the front page which were taken from the following website www.flickr.com Abstract: This report reviews the current status of European Member States’ regulation supporting Demand Response and Aggregation in the wholesale, balancing and ancillary electricity markets, as stipulated in Article 15 of the Energy Efficiency Directive. Demand Response is able to increase the system’s adequacy and to substantially reduce the need for investment in peaking generation by shifting consumption away from times of high demand. It can act as a cost effective balancing resource for variable renewable generation. Adding stability to the system, it lowers the need for coal and gas fired spinning reserves – most running power plants burn fuel continuously in order to be ready to supply power at short notice. It furthermore decreases the need for local network investments, as it shifts consumption away from peak hours in regions with tight network capacity. Demand Response delivers these benefits by providing consumers – residential, commercial or industrial – with control signals and/or financial incentives to adjust their consumption at strategic times. New insights on key success criteria for Demand Response which are in line with and benefit from, Europe’s competitive market design are discussed in the report. A unique European Model begins to emerge. Positive developments in Member States have been evaluated and those who have looked to enable Demand Response are succeeding, despite continued barriers and remaining issues. Demand Response status in EU Member States: Paolo Bertoldi Paolo Zancanella Benigna Boza-Kiss 2016 Table of Contents Acknowledgements ................................................................................................ ii Executive summary .............................................................................................. iii Chapter 1. Introduction to Demand Response ........................................................ 1 Chapter 2. Methodology ...................................................................................... 6 Chapter 3. The status of Demand Response in 2014: a summary of the JRC report ... 11 Chapter 4. EED Art. 15 and MS implementation according to NEEAPs ...................... 23 Chapter 5. Analysis of the JRC 2015 DR survey and updated MS fiches ................... 31 Austria ............................................................................................................ 31 Belgium .......................................................................................................... 34 The Nordic countries: Denmark, Finland, Sweden ................................................. 37 France ............................................................................................................ 44 Germany ......................................................................................................... 50 United Kingdom ............................................................................................... 54 Greece ............................................................................................................ 59 Ireland ............................................................................................................ 63 Italy ............................................................................................................... 67 Luxembourg .................................................................................................... 70 The Netherlands ............................................................................................... 72 Poland ............................................................................................................ 76 Portugal .......................................................................................................... 79 Spain .............................................................................................................. 81 Bulgaria .......................................................................................................... 83 Croatia ............................................................................................................ 87 Czech Republic ................................................................................................. 89 Hungary .......................................................................................................... 92 Romania .......................................................................................................... 96 Slovakia ........................................................................................................ 101 Slovenia ........................................................................................................ 105 Malta ............................................................................................................ 108 Cyprus .......................................................................................................... 110 The Baltic countries: Estonia, Latvia, Lithuania ................................................... 112 Chapter 6. Conclusion and recommendations for improving DR in MSs .................. 125 References ....................................................................................................... 135 List of Acronyms ............................................................................................... 138 Acknowledgements The authors wish to thank the national experts who have responded to our online survey, the interviewees we have contacted either via email or over the phone who provided valuable input, as well as the experts who have provided comments on the first draft of the report, in particular on the Member States country fiches. ii Executive summary The European Commission, Joint Research Centre (JRC) reviewed the progress of Member States toward opening markets for Demand Response as of the beginning of 2016, as part of its support to DG ENER in the frame of the Energy Efficiency Directive, to assess the transposition and implementation of specific Articles of the Energy Efficiency Directive (2012/27/EU) 1. The Energy Efficiency Directive constitutes a significant step towards the development of Demand Response in Europe. Art. 15. 4 requires Member States to: - “Ensure the removal of those incentives in transmission and distribution tariffs that are detrimental to the overall efficiency (including energy efficiency) of the generation, transmission, distribution and supply of electricity or those that might hamper participation of Demand Response, in balancing markets and ancillary services procurement”. - “Ensure that network operators are incentivised to improve efficiency in infrastructure design and operation, and, within the framework of Directive 2009/72/EC, that tariffs allow retailers to improve consumer participation in system efficiency, including Demand Response, depending on national circumstances”. Art. 15.8 of the Directive establishes consumer access to energy markets, either individually or through aggregation. In detail the Article states: - “Member States shall ensure that national regulatory authorities encourage demand side resources, such as Demand Response, to participate alongside supply in wholesale and retail markets.” - “Subject to technical constraints inherent in managing networks, Member States shall ensure that transmission system operators and distribution system operators, in meeting requirements for balancing and ancillary services, treat Demand Response providers, including aggregators, in a non-discriminatory manner, on the basis of their technical capabilities.” - “Member States shall promote access to and participation of Demand Response in balancing, reserves and other system services markets, inter alia by requiring national regulatory authorities […] in close cooperation with demand service providers and consumers, to define technical modalities for participation in these markets on the basis of the technical requirements of these markets and the capabilities of Demand Response. Such specifications shall include the participation of aggregators.” The 5th of June 2014 marked the end of the transposition period of the EED. Article 15.8 therefore requires that regulators, TSOs and DSOs, adjust the technical modalities and