Wood Mackenzie Power & Renewables enables clients to make strategic decisions and forge the path toward a decarbonized and decentralized electricity market. The division delivers reports, data and advisory services on the global energy value chain, covering everything from long-term power forecasts, to new business models at the grid edge, to component pricing for solar systems, to the most recent project data and vendor activity. The objective of this project is to enhance understanding of the current state of demand response (DR) market participation in Europe, including country studies, a competitive vendor landscape, market sizing, policy analyses, and a forecast for the potential for DR growth over the next 20 years. Demand Response can be defined as the change in the power consumption of an electric utility customer in order to match fluctuations in load and supply. 

The SIPA Capstone team estimated the potential for DR markets in five European countries: France, Great Britain, Germany, Italy and Spain. This project provided Wood Mackenzie’s client with key information on the development of these markets, thereby helping them make appropriate investment decisions while contributing to the green energy transition. As part of the team’s methodology for forecasting the future DR potential in Europe, the team examined the market organization, existing vendors, current DR capacity, financial incentives, and market power for each respective country. Interestingly, the team found that DR will remain an essential flexibility option for commercial and industrial power customers across all countries through 2025.