As electricity grids face increasing challenges due to power intermittency and capacity constraints, DSF is seen as a key strategy for ensuring grid stability and accelerating the energy transition. However, the thesis argues that the current approach places too much responsibility on consumers, assuming they will actively respond to price variations. If price signals are poorly designed and embedded in a complex system, their effectiveness is limited. The research suggests a shift towards system-wide coordination rather than expecting individual users to optimize their energy consumption.
The study analyzed real-world cases and policy frameworks governing DSF and examined consumer response to electricity price signals. It introduces the concept of the “price signal paradigm”, which is based on the idea that users are rational, price-sensitive decision-makers who will adjust their consumption if exposed to dynamic pricing. The research challenges this assumption by highlighting the limitations of price responsiveness and the barriers consumers face in engaging with price signals.
The thesis explains the current limitations in the existing DSF framework and the main obstacles to fostering a flexible energy system. It challenges the assumption that price signals alone can drive flexibility. It highlights how consumers struggle to interpret and act on price signals within a complex energy system. This insight challenges policymakers to rethink how DSF is designed and implemented.
Practical implications and future research
Policymakers can use these findings to design alternative DSF mechanisms that rely less on consumer behavior and more on system-level automation, aggregation, and regulatory interventions. The research provides a foundation for reconsidering how flexibility is structured, moving towards coordinated approaches that reduce the burden on individual consumers.
The findings open up new avenues for research into alternative DSF frameworks, exploring policy-driven flexibility solutions that do not rely solely on price signals. Future work may investigate how automated demand response and aggregated flexibility models can improve grid stability.
The thesis was successfully defended on September 24th, 2024, with David Shipworth, Professor at UCL Energy Institute and Chair of the IEA’s User-Centered Energy Systems Programme, serving as the opponent.
Read the dissertation: El Gohary, F. (2024). Diagnosing Demand Flexibility: On the limitations of price signals. (Doctoral dissertation). Uppsala: Acta Universitatis Upsaliensis