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On 7 March 2025, ACER submitted its proposal for a new EU-wide network code on demand response to the European Commission. This is the result of close collaboration with network operators and extensive consultation.
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 or shift the timing of their electricity consumption. Demand response in electricity markets is increasingly important to support more variable renewable generation being added to the power grid.
Why does this network code matter?
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.
To achieve this, the network code and the related amendments to existing regulations (balancing, system operation, and demand connection) cover four main areas:
- Market access: The new EU-wide rules will simplify market entry for smaller energy players and enable standardisation of demand response measurement.
- Service provider qualification process: New measures will streamline prequalification, product verification, and participation for all resources.
- Procurement processes: Transparent rules will regulate system operator services procurement, with justified exceptions to market-based methods.
- System operators’ coordination: Stronger collaboration between system operators will improve renewables integration, congestion management, and system stability.
What are the next steps?
The Commission will review the proposal 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.
Get involved!
ACER will hold a webinar on 27 March 2025 to present its proposal for the network code on demand response, along with amendments to the three related electricity regulations. Register for free here.
