Homes and neighborhoods play a vital role in providing flexibility within a sustainable energy system. Photovoltaic systems, electric vehicles, and electric heating can all be integrated into a demand response (DR) system, where consumers reduce or shift their electricity usage during peak periods. This helps balance the supply and demand of electricity.
Despite Finland's advanced smart meter penetration and infrastructure readiness, the residential DR system faces several challenges, including lack of tailored DR programs and low enrollment rates in direct load control (DLC) programs. LUT University’s Junior Researcher Araavind Sridhar's dissertation uncovers key findings to address these challenges and advance the green transition of the energy system.
“Financial and environmental motivators play a significant role in driving enrollment. By understanding these motivators and using modeling tools, DR campaigns can be tailored to appeal to different consumer subgroups, increasing participation rates,” says Sridhar.
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Many residents are unfamiliar with demand response programs
Sridhar states that the main obstacles for residential consumers’ demand response enrollment are lack of awareness, low perceived financial or environmental benefits, and trust issues regarding data privacy.
“In addition to financial savings and environmental impact, residents can be motivated through ease of the enrollment and collective benefits such as supporting the national grid during crisis. Taylored campaigns also create more trust.”
One problem is the one-size-fits-all design. According to the research, generic DR campaigns often fail to engage consumers effectively because they ignore different lifestyles, home types, or values. For instance, some households prefer automated DR control while others might want manual control to maintain flexibility. Therefore, Sridhar recommends tailored demand response campaigns.
Vast adaptation would enhance energy security
If most homes and neighborhoods enrolled in demand response programs, the benefits would be substantial. A vast adaptation would enhance grid stability, lower infrastructure costs, reduce the need for backup generation, and improve renewable energy integration. For residents, it would enhance energy security and lower energy bills.
According to Araavind Sridhar, the future of residential DR will be flexible, automated, and consumer centric. He emphasizes that engaged local communities, neighborhood organizations, and peer influence could unlock widespread behavioral adoption of demand response.
“Cultural and behavioral factors, such as high trust in institutions and a sense of social responsibility, could give Finland a unique edge in implementing successful DR campaigns and adopting a sustainable change.”
More information:
Araavind Sridhar will defend his dissertation on LUT University’s Lappeenranta campus on Monday 28 April 2025.
