Barriers to demand response in the commercial and industrial sectors – An empirical investigation

Abstract

Demand response can be an effective mechanism to balance electricity demand and supply. While there is an increasing research interest in demand response for private households, its realistic potential in industrial and commercial sectors remains largely untapped, with limited research on the barriers hindering adoption. This study identifies and examines the barriers in industrial and commercial sectors, shedding light on their significance. We conducted 20 semi-structured interviews with experts from German industrial and commercial companies and national industry associations. The most frequently cited barriers encompass concerns about diminished product quality, disruptions to production processes, human resource management, and revenue uncertainty. Despite some recent industrial participation in demand response programs in Germany, our findings suggest that numerous barriers impede widespread participation, which can partly be explained by the heterogeneity of production processes and facilities. Overcoming these barriers entails bridging knowledge gaps and allocating sufficient resources within an organization. Moreover, adapting external incentives and policies may be necessary to encourage widespread demand response adoption. Recognizing these challenges, alongside the underlying motivations and apprehensions, can guide policy makers in devising strategies to support the adoption of demand response among industrial and commercial consumers.