Demand Response Potential Forecasting: A Systematic Review of Methods, Challenges, and Future Directions

Demand response (DR) is increasingly recognized as a critical flexibility resource for modernizing power systems, enabling the large-scale integration of renewable energy and enhancing grid stability. While the field of general electricity load forecasting is supported by numerous systematic reviews, the specific subfield of DR potential forecasting has received comparatively less synthesized attention. This gap leaves a fragmented understanding of modeling techniques, practical implementation challenges, and future research problems for a function that is essential for market participation. To address this, this paper presents a PRISMA-2020-compliant systematic review of 172 studies to comprehensively analyze the state-of-the-art in DR potential estimation. We categorize and evaluate the evolution of forecasting methodologies, from foundational statistical models to advanced AI architectures. Furthermore, the study identifies key technological enablers and systematically maps the persistent technical, regulatory, and behavioral barriers that impede widespread DR deployment. Our analysis demonstrates a clear trend towards hybrid and ensemble models, which outperform standalone approaches by integrating the strengths of diverse techniques to capture complex, nonlinear consumer dynamics. The findings underscore that while technologies like Advanced Metering Infrastructure (AMI) and the Internet of Things (IoT) are critical enablers, the gap between theoretical potential and realized flexibility is primarily dictated by non-technical factors, including inaccurate baseline methodologies, restrictive market designs, and low consumer engagement. This synthesis brings much-needed structure to a fragmented research area, evaluating the current state of forecasting methods and identifying the critical research directions required to improve the operational effectiveness of DR programs.