IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v84y2023ics0957178723001571.html
   My bibliography  Save this article

Institutional and contextual drivers of and barriers to incentive-based demand response: A comparative case study in the Pacific Northwest

Author

Listed:
  • Devenish, Anna

Abstract

Despite demand response (DR) having great potential for improving the functioning of the electrical grid, it remains underutilized as a peak-load management strategy in the U.S. electricity sector. This research employs a comparative case study to examine institutional and contextual drivers of and barriers to incentive-based DR development by investor-owned utilities. The results show that state utility regulator rulings facilitated DR within the rate-of-return regulatory framework, which tends to incentivize investment in supply-side resources. This approach represents a case of institutional layering, in which new rules supplement the existing ones rather than replace them. The findings suggest that DR remains a highly technical policy area with limited public awareness. The results show that winter DR programs are a novel challenge, which has important implications as heating becomes increasingly electrified and the need for integrating renewables increases. The study discusses the importance of Information and Communication Technologies and automation in advanced forms of DR but draws attention to the risk of uneven distribution of benefits brought by these technologies. Finally, the study describes the synergistic effects of combining the benefits of energy efficiency and DR programs.

Suggested Citation

  • Devenish, Anna, 2023. "Institutional and contextual drivers of and barriers to incentive-based demand response: A comparative case study in the Pacific Northwest," Utilities Policy, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:juipol:v:84:y:2023:i:c:s0957178723001571
    DOI: 10.1016/j.jup.2023.101645
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178723001571
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2023.101645?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Brown, Marilyn A. & Chapman, Oliver, 2021. "The size, causes, and equity implications of the demand-response gap," Energy Policy, Elsevier, vol. 158(C).
    2. Cappers, Peter & MacDonald, Jason & Goldman, Charles & Ma, Ookie, 2013. "An assessment of market and policy barriers for demand response providing ancillary services in U.S. electricity markets," Energy Policy, Elsevier, vol. 62(C), pages 1031-1039.
    3. Gailing, Ludger & Röhring, Andreas, 2016. "Is it all about collaborative governance? Alternative ways of understanding the success of energy regions," Utilities Policy, Elsevier, vol. 41(C), pages 237-245.
    4. Paterakis, Nikolaos G. & Erdinç, Ozan & Catalão, João P.S., 2017. "An overview of Demand Response: Key-elements and international experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 871-891.
    5. Rollert, Katarzyna Ewa, 2018. "The underlying factors in the uptake of electricity demand response: The case of Poland," Utilities Policy, Elsevier, vol. 54(C), pages 11-21.
    6. Sautter, John A. & Twaite, Kari, 2009. "A Fractured Climate? The Political Economy of Public Utility Commissions in an Age of Climate Change," The Electricity Journal, Elsevier, vol. 22(6), pages 68-76, July.
    7. Cappers, Peter & Goldman, Charles & Kathan, David, 2010. "Demand response in U.S. electricity markets: Empirical evidence," Energy, Elsevier, vol. 35(4), pages 1526-1535.
    8. O׳Connell, Niamh & Pinson, Pierre & Madsen, Henrik & O׳Malley, Mark, 2014. "Benefits and challenges of electrical demand response: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 686-699.
    9. Barton, John & Huang, Sikai & Infield, David & Leach, Matthew & Ogunkunle, Damiete & Torriti, Jacopo & Thomson, Murray, 2013. "The evolution of electricity demand and the role for demand side participation, in buildings and transport," Energy Policy, Elsevier, vol. 52(C), pages 85-102.
    10. Jones, Douglas N., 2006. "Agency transformation and state public utility commissions," Utilities Policy, Elsevier, vol. 14(1), pages 8-13, March.
    11. Parrish, Bryony & Heptonstall, Phil & Gross, Rob & Sovacool, Benjamin K., 2020. "A systematic review of motivations, enablers and barriers for consumer engagement with residential demand response," Energy Policy, Elsevier, vol. 138(C).
    12. Ajaz, Warda & Bernell, David, 2021. "Microgrids and the transition toward decentralized energy systems in the United States: A Multi-Level Perspective," Energy Policy, Elsevier, vol. 149(C).
    13. Sousa, José Luís & Martins, António Gomes & Jorge, Humberto, 2013. "Dealing with the paradox of energy efficiency promotion by electric utilities," Energy, Elsevier, vol. 57(C), pages 251-258.
    14. Good, Nicholas & Ellis, Keith A. & Mancarella, Pierluigi, 2017. "Review and classification of barriers and enablers of demand response in the smart grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 57-72.
    15. Kim, Jin-Ho & Shcherbakova, Anastasia, 2011. "Common failures of demand response," Energy, Elsevier, vol. 36(2), pages 873-880.
    16. Kern, Florian, 2012. "Using the multi-level perspective on socio-technical transitions to assess innovation policy," Technological Forecasting and Social Change, Elsevier, vol. 79(2), pages 298-310.
    17. Greening, Lorna A., 2010. "Demand response resources: Who is responsible for implementation in a deregulated market?," Energy, Elsevier, vol. 35(4), pages 1518-1525.
    18. Strbac, Goran, 2008. "Demand side management: Benefits and challenges," Energy Policy, Elsevier, vol. 36(12), pages 4419-4426, December.
    19. Lockwood, Matthew & Mitchell, Catherine & Hoggett, Richard, 2020. "Incumbent lobbying as a barrier to forward-looking regulation: The case of demand-side response in the GB capacity market for electricity," Energy Policy, Elsevier, vol. 140(C).
    20. Nolan, Sheila & O’Malley, Mark, 2015. "Challenges and barriers to demand response deployment and evaluation," Applied Energy, Elsevier, vol. 152(C), pages 1-10.
    21. Stokes, Leah C. & Breetz, Hanna L., 2018. "Politics in the U.S. energy transition: Case studies of solar, wind, biofuels and electric vehicles policy," Energy Policy, Elsevier, vol. 113(C), pages 76-86.
    22. Giordano, Vincenzo & Fulli, Gianluca, 2012. "A business case for Smart Grid technologies: A systemic perspective," Energy Policy, Elsevier, vol. 40(C), pages 252-259.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leinauer, Christina & Schott, Paul & Fridgen, Gilbert & Keller, Robert & Ollig, Philipp & Weibelzahl, Martin, 2022. "Obstacles to demand response: Why industrial companies do not adapt their power consumption to volatile power generation," Energy Policy, Elsevier, vol. 165(C).
    2. Stede, Jan & Arnold, Karin & Dufter, Christa & Holtz, Georg & von Roon, Serafin & Richstein, Jörn C., 2020. "The role of aggregators in facilitating industrial demand response: Evidence from Germany," Energy Policy, Elsevier, vol. 147(C).
    3. Nilsson, Anders & Lazarevic, David & Brandt, Nils & Kordas, Olga, 2018. "Household responsiveness to residential demand response strategies: Results and policy implications from a Swedish field study," Energy Policy, Elsevier, vol. 122(C), pages 273-286.
    4. Good, Nicholas & Ellis, Keith A. & Mancarella, Pierluigi, 2017. "Review and classification of barriers and enablers of demand response in the smart grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 57-72.
    5. Olga Bogdanova & Karīna Viskuba & Laila Zemīte, 2023. "A Review of Barriers and Enables in Demand Response Performance Chain," Energies, MDPI, vol. 16(18), pages 1-33, September.
    6. Sousa, Joana & Soares, Isabel, 2023. "Benefits and barriers concerning demand response stakeholder value chain: A systematic literature review," Energy, Elsevier, vol. 280(C).
    7. Alcázar-Ortega, Manuel & Calpe, Carmen & Theisen, Thomas & Carbonell-Carretero, José Francisco, 2015. "Methodology for the identification, evaluation and prioritization of market handicaps which prevent the implementation of Demand Response: Application to European electricity markets," Energy Policy, Elsevier, vol. 86(C), pages 529-543.
    8. Cai, Qiran & Xu, Qingyang & Qing, Jing & Shi, Gang & Liang, Qiao-Mei, 2022. "Promoting wind and photovoltaics renewable energy integration through demand response: Dynamic pricing mechanism design and economic analysis for smart residential communities," Energy, Elsevier, vol. 261(PB).
    9. Mohseni, Soheil & Brent, Alan C. & Kelly, Scott & Browne, Will N., 2022. "Demand response-integrated investment and operational planning of renewable and sustainable energy systems considering forecast uncertainties: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    10. Cruz, Marco R.M. & Fitiwi, Desta Z. & Santos, Sérgio F. & Catalão, João P.S., 2018. "A comprehensive survey of flexibility options for supporting the low-carbon energy future," Renewable and Sustainable Energy Reviews, Elsevier, vol. 97(C), pages 338-353.
    11. Pallonetto, Fabiano & De Rosa, Mattia & D’Ettorre, Francesco & Finn, Donal P., 2020. "On the assessment and control optimisation of demand response programs in residential buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    12. Jan Stede & Karin Arnold & Christa Dufter & Georg Holtz & Serafin von Roon & Jörn C. Richstein, 2020. "The Role of Aggregators in Facilitating Industrial Demand Response: Evidence from Germany," Discussion Papers of DIW Berlin 1840, DIW Berlin, German Institute for Economic Research.
    13. Gjorgievski, Vladimir Z. & Markovska, Natasa & Abazi, Alajdin & Duić, Neven, 2021. "The potential of power-to-heat demand response to improve the flexibility of the energy system: An empirical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    14. Nolan, Sheila & O’Malley, Mark, 2015. "Challenges and barriers to demand response deployment and evaluation," Applied Energy, Elsevier, vol. 152(C), pages 1-10.
    15. Morales-España, Germán & Martínez-Gordón, Rafael & Sijm, Jos, 2022. "Classifying and modelling demand response in power systems," Energy, Elsevier, vol. 242(C).
    16. Seungmi Lee & Jinho Kim, 2018. "Analytical Assessment for System Peak Reduction by Demand Responsive Resources Considering Their Operational Constraints in Wholesale Electricity Market," Energies, MDPI, vol. 11(12), pages 1-15, November.
    17. Lund, Peter D. & Lindgren, Juuso & Mikkola, Jani & Salpakari, Jyri, 2015. "Review of energy system flexibility measures to enable high levels of variable renewable electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 785-807.
    18. Ribó-Pérez, D. & Carrión, A. & Rodríguez García, J. & Álvarez Bel, C., 2021. "Ex-post evaluation of Interruptible Load programs with a system optimisation perspective," Applied Energy, Elsevier, vol. 303(C).
    19. Meyabadi, A. Fattahi & Deihimi, M.H., 2017. "A review of demand-side management: Reconsidering theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 367-379.
    20. Katz, Jonas, 2014. "Linking meters and markets: Roles and incentives to support a flexible demand side," Utilities Policy, Elsevier, vol. 31(C), pages 74-84.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:84:y:2023:i:c:s0957178723001571. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.