Levelised cost of demand response: estimating the cost-competitiveness of flexible demand
File(s)
Published version
Author(s)
Thrän, Jacob
Green, Tim C
Shorten, Robert
Type
Journal Article
Abstract
To make well-informed investment decisions, energy system stakeholders require reliable cost frameworks for demand response and storage technologies. While the levelised cost of storage permits comprehensive cost comparisons between different storage technologies, no generic cost measure for the comparison of different demand response schemes exists. This paper introduces the levelised cost of demand response, which is an analogous measure to the levelised cost of storage but crucially differs from it by considering consumer reward payments. Additionally, the value factor from cost estimations of variable renewable energy is adapted to account for the variable availability of demand response. The levelised cost of demand response is estimated for four direct load control schemes and twelve storage applications, and then contrasted against literature values for the levelised cost of the most competitive storage technologies. The direct load control schemes are vehicle-to-grid, smart charging, smart heat pumps, and heat pumps with thermal storage. The results show that only heat pumps with thermal storage consistently outcompete storage technologies, with EV-based schemes being competitive for some applications. The results and the underlying methodology offer a tool for energy system stakeholders to assess the competitiveness of demand response schemes even with limited user data.
Date Issued
2026-02-01
Date Acceptance
2025-11-21
Citation
Energy Conversion and Management, 2026, 349
ISSN
0196-8904
Publisher
Elsevier BV
Journal / Book Title
Energy Conversion and Management
Volume
349
Copyright Statement
© 2025 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/
License URL
Publication Status
Published
Article Number
120811
Date Publish Online
2025-11-29