Accelerating the development of residential demand response in liberalised markets

Thesis

Residential demand response (DR) is expected to play a critical role in enabling affordable, secure, and decarbonised electricity systems. Yet in many liberalised markets, residential DR has remained fragmented, small-scale, and inconsistently integrated into mainstream retail and system operations. Using a GB case study, this thesis investigates how policy can create the conditions for rapid and durable DR growth in liberalised markets. It analyses residential DR from three different but complementary perspectives: industry, households, and the innovation system as a whole.

From an industry perspective, the thesis investigates how GB electricity suppliers and aggregators interpret, value, and operationalise DR within commercial, regulatory, and institutional constraints. Drawing on 33 expert interviews, it shows that weak value stacks, legacy IT systems, regulatory uncertainty, and slim retail margins create strong disincentives to invest in DR capability. Innovation occurs, but it remains peripheral, fragile, and challenging to scale.

Then, it looks at households and how they engage with a national DR programme: the GB Demand Flexibility Service. Using domestication theory and 25 participant diaries, it identifies the symbolic, practical, and cognitive dimensions through which DR is integrated in everyday life. The analysis reveals uneven ‘flexibility capital’ across households and highlights how programme design, communication strategies, and automation shape longterm willingness to participate.

Finally, the thesis integrates the industry and household perspectives into a whole-system historical account of DR development in GB over the past 15 years, using a Technological Innovation Systems (TIS) approach and event history analysis. It shows that incremental reform and fragmented governance have created an environment rich in pilots but poor in stable markets, with foundational enablers developing out of sequence and DR legitimation remaining contested.

Overall, the thesis demonstrates that DR does not fail for technical or behavioural reasons but because governance, commercial incentives, and household practices are misaligned. I argue that strategic coordination, commercial viability, and DR policy and products designed for mass DR users will help scale DR at the pace required for decarbonisation. The thesis offers a policy framework for sequencing reforms, strengthening market formation, and embedding DR into everyday life.

Authors: Mihalache, A

• Alternative title: A case study of Great Britain
• DOI: 10.5287/ora-vqegaxzn0
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English
• Keywords: residential demand-response; electricity system flexibility; electricity tariffs; flexibility markets; demand-side response; consumer-led flexibility; time-of-use tariffs
• Subjects: Energy policy; Demand-side management (Electric utilities); Energy transition