In terms of physics, having DR participate in wholesale electricity markets is necessary to ensure it matches the needs of flexibility entailed by a wide use of renewables: you need GWs of DR to balance the intermittency of GWs of renewables.

In terms of competition, allowing DR to bid in the market alongside generation ensures the cheapest solution is selected by the market – hence expensive generation is avoided by reducing consumption instead, and thus expensive prices are avoided: DR ensures suppliers reduce their sourcing costs.

These are direct benefits for all suppliers: buying cheaper in the market, they save money.

On the other hand, having DR sold in the wholesale market means it is bought by electricity suppliers: DR comes at a cost.

This study quantifies the benefits and the costs of DR: it shows that benefits are 190% greater than costs: DR entails a huge net benefit to suppliers, to be ultimately transferred to all consumers.

Note: DR will benefit all suppliers, hence all consumers – not just those participating in DR.

CompassLexecon used their standard pan-European system model to quantify the impact of having 30 GW of DR in 2030.

30 GW is several times more than available today, yet far from the potential of 160 GW in 2030 according to the report published by the European Commission with the Clean energy package.

Several strictly conservative assumptions are used, thus leading to underestimate the benefits of DR – and yet the model finds benefits almost twice greater than costs.