Implementing and encouraging a more active role of consumers presents technological, market, and regulatory challenges.
Technological challenges:
- development of smart devices,
- cost-effective connectivity,
- development of smart device control and management algorithms.
Market challenges:
- development of a supply- and demand-side flexibility market,
- evolution of service providers (for instance through a new role as aggregators).
Regulatory challenges:
- removal of barriers and creation of a stimulating regulatory framework that rewards demand response. Example: a transition from the postage stamp tariff system to locational marginal pricing for distribution cost allocation.
