Barriers to Demand Response in the Commercial and Industrial Sectors - an Empirical Investigation

Demand Response (DR) is seen as a promising tool to match consumers’ electricity demand with available supply, but adoption of DR in the industrial and commercial sectors is still a long way from reaching these potentials. Therefore, this study identifies and explores the barriers to engaging in DR, and takes a closer look at the importance of these barriers. To this end, we conducted 20 semi-structured interviews with experts from industrial and commercial companies as well as national industry associations in Germany. The most commonly cited barriers include fear of reduced product quality, interference with up- and downstream processes, management of human resources, and costs that are difficult to quantify ex ante. Even though some industrial companies have recently started to participate in DR programs in Germany, our results suggest that the heterogeneity of production processes and facilities may explain the reluctance to engage in DR. We discuss practical implications arising from these findings.