This paper provides a systematic review of 34 large-scale projects of power-to-heat demand response. The projects have been classified in terms of location, size, technical implementation and objective. The chronological ordering of the reviewed projects enables key takeaways to be drawn considering other developments in the energy sector, such as its restructuring and the emergence of competing flexibility options. The presented approach provides renewed insight to the debate on power-to-heat demand response diffusion. Historically, power-to-heat demand response has been used because of its wide availability on the demand side. Within utility programs, it has mostly been used to deal with infrastructure capacity limitations. This is still a major driver for power-to-heat demand response today. To address the challenges that come with the integration of renewable energy sources, more recent research projects have focused on exploring its capability to provide real-time balancing and frequency response at a smaller scale. The literature review suggests that the period of energy sector restructuring introduced uncertainty to energy companies regarding power-to-heat demand response and thus influenced its use. This period is now superseded by developments focused on electricity markets that are open to the demand side. Considering the flexibility requirement of the future energy system, new opportunities arise for power-to-heat demand response. Based on a critical analysis of the technical and regulatory changes, this paper makes the claim that the economic and policy frameworks have had a much more significant effect on the varying diffusion of power-to-heat demand response than the effect of the control and information technologies. In that sense, market rules should be carefully tailored so as to unlock the flexibility not only of power-to- heat demand response, but also of other flexibility resources.