Systematic review

Demand-side policy: Global evidence base and implementation patterns

20 Mar 2018

Demand-side management (DSM) policy refers to government policies for managing energy consumption in order to meet environmental and energy security objectives. The broader term of demand-side management encompasses energy efficiency, demand response and on-site generation and storage. A comprehensive meta-evaluation of the global evidence base for demand-side policy is lacking in the literature, and this paper contributes to filling this research gap. The paper focuses on the quality of the evidence base and policy implementation patterns and identifies 30 countries and 36 sub-national states across six continents that have implemented demand-side management policies and produced high-quality ex-post evaluations of those policies. The 690 high-quality evaluations are primarily conducted by industry rather than by governments or academia. The results show that 12 types of individual demand-side management policy and 9 demand-side management policy packages have been implemented and evaluated, and that carbon emissions reduction is the primary driver for demand-side management policies. The evidence base is greatest in the USA, the UK, California, France and China, and alternative utility business models (such as performance targets and decoupling policies), information campaigns, loans and subsidies, utility obligations and performance standards are the most commonly implemented and evaluated policies. This paper argues that demand-side policy will play an increasingly important role as a complement to low carbon activities on the supply-side in the transition to a more environmentally sustainable energy system.

Synthesis method: Qualitative

Conclusions: The findings show that the top-five most frequently implemented and evaluated DSM policies are alternative utility business models (such as decoupling policies and performance targets), information campaigns, loans and subsidies, utility obligations, and performance standards. The primary policy objective for DSM is to reduce carbon emissions, followed by ensuring energy security, increasing the uptake of energy efficient technologies, and creating new resources and markets. It is clear that individual DSM policies are more commonly implemented and evaluated than DSM policy packages, as just 45/690 evaluations focussed on policy packages. Of these, information campaigns in combination with loans and subsidies, and performance standards in combination with labelling, are the more commonly implemented and evaluated policy packages. Although temporal patterns were not the central focus of the analysis due to the potential digitisation bias for evaluations, the results show that the number of high-quality ex-post evaluations have increased over time since the energy crises of the 1970s. Overall, this paper argues that demand-side policy will play an increasingly important role as a complement to low carbon activities on the supply-side in the transition to a more environmentally sustainable energy system.

From the analysis, it is clear that the evidence base for high-quality ex-post demand-side policy evaluations is limited with most evaluations being produced by industry rather than governments or academia. Thus, there is a need to encourage evaluation practices in governments to ensure that enough resources are dedicated to post-policy evaluation in order to improve the design and implementation of future DSM policies. Such an approach should aim to establish institutional learning beyond lessons learned to use robust ex-post evaluation methods to inform future ex-ante appraisals and pre-policy impact assessments. Despite this, the potential political bias of governments not wanting to publicly evaluate and declare policies that did not perform as well as originally anticipated remains an important challenge that warrants further attention. Overall, the evaluation practices published in sources such as the International Energy Program Evaluation Conference (IEPEC), the European Council for an Energy-Efficient Economy (ECEEE), the American Council for an Energy-Efficient Economy (ACEEE), the US Department of Energy (DoE)’s Energy 18 Energy & Environment 0(0) Citations Database, The Electricity Journal and Energy Efficiency are good role models for the production of high-quality DSM evaluations.

Screening criteria: 102 documents chosen. Inclusion criteria Documents that answer the research questions Documents that discuss government-stimulated policies and programmes Documents that are written in English Documents that are ex-post policy evaluations Documents that are freely accessible and downloadable from the internet Exclusion criteria Documents that look at DSM policy but not policy mechanisms and impacts Documents that discuss utility-stimulated DSM programmes Documents that discuss trials, pilots and small-scale R&D programmes Documents that model the future potential of DSM Documents that discuss theoretical aspects of DSM policy Documents that are not written in English Documents from hand searching Documents from referrals Documents from bibliographies and ‘snow-balling’.

Search source: Energy Policy, Energy, Energy Efficiency, Energy Economics, The Electricity Journal, The Energy Journal, Electric Power Systems Research, Energy and Buildings, Resource and Energy Economics, Open Grey, Google (Literature Review), American Council for an Energy-Efficient Economy (ACEEE), European Council for an Energy-Efficient Economy (ECEEE), IEA’s Demand-Side Management Programme, Association for the Conservation of Energy (ACE), National Grid, International Energy Program Evaluation Conference (IEPEC) 21 102 International Partnership for Energy Efficiency Cooperation (IPEEC), British Association for Energy Economics (BIEE), International Association for Energy Economics (IAEE), US Department of Energy (DoE), US DoE Energy Citations Database, US Federal Energy Regulatory Commission (FERC) 0 34 US Energy Information Administration (EIA) 0 83 UK Department of Energy and Climate Change (DECC), UK Office of Gas and Electricity Markets (Ofgem), UK National Audit Office (NAO), UK Public Accounts Committee for the House of Commons (PAC), China National Development and Reform Commission (NDRC), Australia Energy Regulator (AER), Australia Department of Industry, California Public Utilities Commission (CPUC), European Commission Department of Energy, Thomas Reuters Web of Science

Search keywords: not listed in this publication

Funding source: The author(s) received no financial support for the research, authorship, and/or publication of this article.

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