Demand-side management and European environmental and energy goals: an optimal complementary approach

Demand side management (DSM) in electricity markets could improve energy efficiency and achieve environmental targets through controlled consumption. For the past 10 years or so DSM programmes have registered significant results. However, detailed analysis of its real impact as observed by a large number of pilot studies suggests that such programmes need to be fine-tuned to suit clearly identified conditions. This study aims to provide recommendations for the instruments to be used to prompt demand response with a view to maximizing energy and environmental efficiencies of various countries. The present study suggests that different DSM models should be deployed depending on the specific generation mix in any given country. Beside the natural benefits from cross-borders infrastructures, DSM improves the flexibility and reliability of the energy system, absorbing some shock on generation mix. We show efficiency increases with demand response but at a decreasing rate. So, according to rebound and report effects, simple DSM tools could be preferred.