A review of demand-side management policy in the UK

Abstract

Demand-side management (DSM) refers to actions undertaken on the demand side of energy metres. A broad definition of DSM is proposed to include current policy objectives for emissions reduction, energy security and affordability, and encompasses energy efficiency, demand response, and on-site back-up generation and storage. The paper reviews the concept of DSM, outlines the historical impacts of DSM globally since the energy crises of the 1970s, analyses UK DSM policy, and examines the influence of EU Directives on UK DSM policy, as the country is currently deciding on how to include the demand-side in its Electricity Market Reform proposals and wider energy policy. Much of the focus of previous research has been on DSM technological trials and modelling studies rather than DSM policy and the paper contributes to filling this gap. Policy recommendations for the UK context are discussed, and it is clear that the success of DSM policies is determined primarily by regulatory support and utility financial incentives. It is important that policy clarity is provided and that current and new policies do not overlap. • Critique of the different definitions of DSM. • Review of global experiences with DSM policies. • Review of UK DSM policies and the influence of the EU. • Policy recommendations for the UK.