Europex response to ACER public consultation on the draft Framework Guidelines on Demand Response

Europex welcomes the opportunity to provide feedback on ACER’s draft Framework Guidelines (FG) on Demand Response (DR) in preparation of a new network code. Demand response, and more generally system flexibility, play a key role in achieving the EU’s decarbonisation targets and securing future system stability as volatile electricity production from renewables will need to increase substantially in the years to come.

Against this background, we explicitly recognise the need to speed up the flexibilisation of electricity demand (as well as production and storage) and support the Commission’s initiative to look into this important issue.

Further, it is vital to keep in mind that a future network code on demand response will ultimately have an impact on the functioning of all market timeframes and will introduce an additional layer of regulatory, organisational and technical complexity. Hence, while developing the network code, the overall functioning and fundamental objectives of an integrated, transparent and efficient Internal Energy Market need to be taken into consideration. This is especially true when making fundamental system design choices, like a possible introduction of locational tag bids in intraday and balancing markets for procuring SO services or other significant market design interventions. While the proposed changes aim at ensuring wholesale market access for demand response and other relevant sources, they are challenging and would add complexity to the existing framework, e.g. in terms of price signal and technical implementation. Therefore, a careful impact assessment and an in-depth evaluation of the long-term market design requirements is of utmost importance to assess the viability and feasibility of the proposed options. This will avoid a disruptive impact on the current market design and will allow to further progress towards the full market integration of demand response.

Please find our detailed assessment attached: