How consumers can help to decarbonise the electricity system

The document argues that demand-side flexibility (DSF) is essential for integrating intermittent renewables and managing the electrification of transport and buildings. It identifies barriers such as inadequate economic signals and consumer passivity, while highlighting enablers like smart metering, digital aggregation platforms, and the need to align services with consumer preferences. For China, the brief suggests a transition from coal-based flexibility to decarbonised sources, proposing a hybrid approach combining market prices with administrative merit orders to manage distributed energy resources.

• Demand-side flexibility (DSF) has evolved from a "nice to have" tool for reducing peak demand to an essential requirement for integrating intermittent renewable generation and managing the electrification of transport, buildings, and industry.
• Distributed energy resources (DER), such as electric vehicle (EV) batteries, rooftop solar, and heat pumps, provide a low-incremental-cost source of flexibility that can reduce the need for expensive large-scale central-system assets.
• Significant barriers to DSF adoption include inadequate market or regulatory price signals, consumer passivity due to high transaction costs, and a gap between current power system settings and future needs.
• The UK is a leader in DSF development, utilizing tools such as the Ofgem-BEIS Smart Systems and Flexibility Plan, regulatory sandboxes, and the separation of the system operator (ESO) from the network company (National Grid) to avoid conflicts of interest.
• In China, the power system relies heavily on coal for flexibility, but this is becoming unsustainable due to carbon emission policies and inadequate pricing for ancillary services.
• China has significant untapped DSF potential; for example, EV battery capacity is expected to reach 5.7 TWh by 2030, which is over one quarter of the national network's average daily power consumption in 2020.
• Current demand response (DR) efforts in China are often mandatory and inadequately compensated, with a lack of market-based pricing to reflect the true economic value of flexibility.
• The authors propose a hybrid approach for China that uses market prices to incentivize specific assets like smart EV charging, while using an administrative merit order to ration demand for other equipment.
• To successfully implement DSF, China should establish a Consumer Panel and a "Living Lab" of real-world homes to research consumer preferences and test business models.
• DSF presents a global business opportunity for China to export products and services, such as metering and digital aggregation platforms, through the Belt and Road Initiative.

APA

Robinson, D., & Li, X. (2021). How consumers can help to decarbonise the electricity system. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2021/10/DSF-China-Policy-Brief-ENG_v2.pdf

Chicago

Robinson, David, and Xin Li. How consumers can help to decarbonise the electricity system. Climate Strategies, 2021. https://climatestrategies.org/wp-content/uploads/2021/10/DSF-China-Policy-Brief-ENG_v2.pdf.

Wikipedia

{{cite report |last1=Robinson |first1=David |last2=Li |first2=Xin |title=How consumers can help to decarbonise the electricity system |publisher=Climate Strategies |date=October 2021 |url=https://climatestrategies.org/wp-content/uploads/2021/10/DSF-China-Policy-Brief-ENG_v2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{robinson2021how, author = {Robinson, David and Li, Xin}, title = {{How consumers can help to decarbonise the electricity system}}, institution = {Climate Strategies}, year = {2021}, month = oct, url = {https://climatestrategies.org/wp-content/uploads/2021/10/DSF-China-Policy-Brief-ENG_v2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }