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The uncertain but critical role of demand reduction in meeting long-term energy decarbonisation targets

Pye, S; Usher, W; Strachan, N; (2014) The uncertain but critical role of demand reduction in meeting long-term energy decarbonisation targets. Energy Policy , 73 pp. 575-586. 10.1016/j.enpol.2014.05.025. Green open access

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Abstract

Endogenous demand responses for energy services, resulting from changing prices, have long been characterised in energy systems models. However, the uncertainty associated with such demand responses, modelled through the use of price elasticities, has often been ignored. This is problematic for two key reasons – elasticity factors used in models are highly uncertain due to the limited evidence base, while at the same time, demand response has been observed as a critical mechanism for meeting long term climate mitigation targets. This paper makes two important contributions for improving the understanding of the role of price-induced demand response. Firstly, it attempts to address the problem of unsatisfactory elasticity input assumptions by undertaking an up-to-date review of the literature. Secondly, the role of demand response under uncertainty is assessed using a probabilistic approach, focusing on its contribution to mitigation. The paper highlights that demand response does play a critical role in mitigation, ensuring a more cost-effective transition to a low carbon energy system. Crucially, the uncertainties associated with price elasticities do not weaken this finding. The transport sector is the driver of this demand response leading to important implications for policy and the focus of demand side interventions.

Type: Article
Title: The uncertain but critical role of demand reduction in meeting long-term energy decarbonisation targets
Open access status: An open access version is available from UCL Discovery
DOI: 10.1016/j.enpol.2014.05.025
Publisher version: http://dx.doi.org/10.1016/j.enpol.2014.05.025
Language: English
Additional information: Copyright © 2014 Elsevier Ltd. All rights reserved. This manuscript version is published under a Creative Commons Attribution Non-commercial Non-derivative 4.0 International licence (CC BY-NC-ND 4.0). This licence allows you to share, copy, distribute and transmit the work for personal and non-commercial use providing author and publisher attribution is clearly stated. Further details about CC BY licences are available at http://creativecommons.org/licenses/by/4.0. Access may be initially restricted by the publisher.
Keywords: Science & Technology, Technology, Life Sciences & Biomedicine, Energy & Fuels, Environmental Sciences, Environmental Studies, Environmental Sciences & Ecology, Energy Demand Response, Climate Change Mitigation, Energy Systems Modelling, Model, Elasticities, Consumption, Markal, Income, Price
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Bartlett School Env, Energy and Resources
URI: https://discovery.ucl.ac.uk/id/eprint/1435069
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