ACER webinar: Network code on demand response
What is it about?
On 8 May 2024, ACER received the electricity system operators’ proposal for an EU-wide network code on demand response. The proposal, drafted by the EU Distribution System Operators Entity (EU DSO Entity) and the European Network of Transmission System Operators (ENTSO-E), also included amendments to the three related electricity regulations: balancing, system operation and demand connection.
ACER revised the draft and consulted on it in autumn 2024. After making final amendments to incorporate the consultation results, ACER submitted its proposal to the European Commission on 7 March 2025.
What is demand response?
Demand response is when consumers–retail and industrial–intentionally adjust their electricity consumption in response to a change in the electricity market price or a financial incentive to increase/decrease/shift the timing of their electricity consumption. This can be done for the purpose of balancing supply and demand or for solving congestion in the grid. For example, retail consumers can provide balancing services through bi-directional charging of their electric vehicles (EVs). Demand response development will enable lowering electricity supply costs (which are a key driver of electricity bills).
Demand response in electricity markets is increasingly important to support more variable renewable generation such as wind and solar (with variable output that must be balanced), being added to the power grid.
Why is this network code relevant?
This network code will ensure that demand response resources (such as consumers, storage providers, and distributed generation) can fully participate in wholesale electricity markets, providing much needed flexibility to an evolving power system driven by renewable energy and thereby contributing to energy security and the transition to clean energy.
The network code on demand response will be applicable in all EU Member States.
Event objective
In this public workshop, ACER will:
present the revised network code on demand response and the proposed amendments to the three related electricity regulations, as submitted to the European Commission;
explain key decisions made during the drafting process.
What are the next steps?
After ACER submits its proposal for the network code, the Commission will review it and initiate the process of establishing the Demand Response (DR) Regulation and amending the three related regulations. Once adopted by Member States, these will become legally binding across the EU.
What else?
The network code proposal also introduces new terms and conditions or methodologies (TCMs) related to demand response. These will be drafted by system operators over the coming years and submitted to national regulators (national TCMs) and ACER (EU-wide TCMs) for approval. Once approved, ACER will monitor their implementation to ensure consistency across Member States.
In the coming months, ACER plans to establish the Demand Response European Stakeholders Group (DRESG) to engage stakeholders on key demand response topics, including the development of new TCMs. More information will follow.