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Critical Peak Rewards: Evidence from a Nationwide Demand Response Program

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  • Louise Bernard
  • Robert D. Metcalfe
  • Andrew Schein

Abstract

Demand flexibility at scale is likely to be an important part of the future energy system. This study evaluated the world’s first nationwide domestic and commercial demand flexibility program. We analyzed the policy using a natural field experiment, with a sample of 2.7 million, assigning 119,999 customers to a control group and the rest to receive randomized encouragement to sign up to the demand flexibility program. The program paid consumers to reduce their demand below a predicted baseline at peak demand across 16 events (i.e., when the system was stressed) during the Winter of 2023–24. Customers who opted into events reduced demand during events by 23.1% among compliers, at an average cost for the system operator of £2,325 per MWh. The adoption of solar panels and batteries, heat pumps, and EVs all increased demand response.

Suggested Citation

  • Louise Bernard & Robert D. Metcalfe & Andrew Schein, 2026. "Critical Peak Rewards: Evidence from a Nationwide Demand Response Program," NBER Working Papers 35485, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35485
    Note: EEE
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    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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