Demand-Side Flexibility for Energy Transitions: Policy Recommendations for Developing Demand Response

As a follow-up to IRGC's report on demand-side flexibility for energy transitions, this Policy Brief highlights that increasing flexibility in power systems is needed to accommodate higher shares of non-controllable and intermittent renewable generation, and that this requires changes to the market design and regulatory framework, to facilitate the development and deployment of appropriate technologies and market-based instruments (e.g. taxes and subsidies). The Policy Brief focuses on demand response (DR), since it is emerging as a powerful demand-side energy management option to deliver flexibility. Specifically, DR can contribute to reducing overall electricity consumption or shifting demand in such a way that consumption better follows generation, particularly intermittent wind and solar.