Demand response in the service sector - setting course for energy flexibility and efficiency

The increasing share of renewable energies in electricity generation is within the scope of the energy transition. Among other things, this will lead to a more volatile generation of electricity. A more flexible energy demand could contribute to handling the resulting challenges in electricity grid management. The service sector is one of the target groups for utilising flexible demand, also called demand response (DR). Supermarkets, hotels and office buildings can be found in regions throughout Germany. This could be an advantage regarding the compensation of grid instability in any region, compared to more locally focussed industrial enterprises. First estimations point out considerable unused DR potentials for the service sector. However, currently there is less knowledge about flexibility options in the service sector than in industry. Moreover, market barriers such as a missing adequate regulatory framework offering attractive incentives prevent that the potentials are tapped. Therefore, in this paper, we first analyse survey data from 1.000 companies of the service sector in Germany to identify subsectors that have a high share of flexible cross-sectoral technologies in electricity consumption. Data indicates that the subsectors trade, restaurants and hotels as well as office-like buildings are the most promising subsectors of the service sector regarding demand response potential, since they have a high stock in flexible cooling appliances, air conditioning and ventilation. In a second step, we conducted stakeholder interviews, to find individual barriers in each of the identified subsectors as well as possible starting points and incentives. They indicate that framework conditions promoting demand response measures seem to be improving, e.g. technical standards and latest regulatory revisions. However, still unapt or missing regulatory framework conditions, low profitability and a lack of knowledge regarding flexibility potentials and marketing mechanisms seem to be the main barriers. This indicates that in order to tap the existing demand response potentials in the service sector, the value of flexibility in demand needs to be appreciated, e.g. by facilitating market participation or by creating offers rewarding the enterprises' flexibility of demand. In addition, addressing demand response issues in already existing policy measures such as energy audits could raise awareness and knowledge.