Analysing the social benefits of Demand Response

A report by the RISØ National Laboratory, Denmark

The cost of producing electricity varies considerably over relatively short time intervals, yet most electricity consumers do not experience corresponding variations in the price they pay for consuming electricity. But are consumers willing and able to respond to short-term variations in electricity prices and, if so, what is the benefit to society of such a Demand Response by consumers?

The Danish Risø National Laboratory tried to answer that second question in their study report 'Analyses of Demand Response in Denmark'. The report tackles the possibility of short-term consumer flexibility in Denmark and the Scandinavian market. It focuses on market efficiency, efficient allocation of resources, and security of supply. It describes the issue from a micro-economic perspective and provides empirical observations as well as case studies.