• Energy Research

Abstract Cost-effectively decarbonising the power sector and household energy use using variable renewable energy will require that electricity consumption becomes much more flexible and responsive to constraints in supply and the distribution network. In recent years residential demand response (DR) has received increasing attention that has sought to answer, based on current evidence, questions about how much consumers will engage with DR. This paper critically reviews the evidence base for residential consumer engagement with DR and draws out several important limitations in it. We argue for a more action-oriented focus on developing practical strategies to enable and unlock greater loadshifting and consumer engagement with DR within a changing technology and regulatory context. A number of recommendations are put forward for accelerating UK consumer engagement with DR, presented under three broad strategies: (a) promote awareness of smart tariffs, smart meters and storage and automation behind-the-meter devices as mutually-supportive components within a common ‘DR technology cluster’; (b) deliver targeted support for adoption of electric vehicles and other storage and automation technologies; (c) enable and support informed adoption of DR-enabling products and services through ‘smarter’ digital comparison tools (DCTs), data portability, and faster, simpler switching. The interdependency between components within this DR technology cluster delivers efficiency but also poses a risk that one delayed component (e.g., smart metering) will hold-up policy and industry support for other components. The urgency of decarbonisation goals makes it necessary to push forward as many of these elements as possible rather than the pace being set by the slowest.

Policymakers are seeking a transformation of the energy system driven by concerns about climate change, energy security and affordability. At the same time, emerging developments in underpinning science and engineering are opening up new possibilities across the whole technology spectrum covering renewables and other supply side technologies, energy demand and energy infrastructure. This paper reviews both the “policy pull” for energy innovation activities and the “science and technology push”. It explores the expectations of a variety of organisations in both the public and private sector regarding these pressures and possibilities by assessing various scenarios and outlook exercises that have been published since 2013. It reveals a wide range of beliefs about the future development of the energy system. The paper then moves on to analyse private sector expenditure on energy research and development (R&D) and public sector budgets for energy R&D and demonstration (RD&D). This analysis demonstrates significant divergences in patterns of innovation between the private and public sectors and leads to the hypothesis that the private sector is, broadly, taking measures to reinforce the existing energy paradigm while the public sector is focusing on new energy technologies that support wider policy objectives. This pattern is consistent with past technological transitions, with innovation efforts that would transform the energy system being counteracted by countervailing efforts that reinforce the existing fossil fuel-based paradigm.