International Energy Agency

Key findings

This report notes the advent of what the IEA calls The coming “Age of Electricity”, which is underpinned by rising investments in new electrified energy resources on both the supply and demand side of the energy system. The report notes that: “Demand response offers breakthrough benefits, yet its potential is largely untapped: With the share of variable renewable energy (VRE) sources in electricity supply rising rapidly in many regions and end-use sectors such as heating and transport becoming progressively more electrified, demand flexibility has become an essential component for power systems. In this evolving energy landscape, demand response (DR) programmes are becoming an increasingly important flexibility tool, enabling households and businesses to shift or shed their electricity use in response to grid or market signals. 

The potential for demand response is enormous. Yet, despite its substantial system-wide and consumer benefits, DR implementation globally largely remains untapped. Our analysis shows that, as of 2024, only around 100 GW of demand response is utilised on a global basis. For example, aluminium production accounts for around 160 GW of peak electricity demand in the world, but only a small share of this is currently leveraged for demand response. Similarly, residential air conditioning (AC) contributes around 600 GW, yet flexible demand response from AC loads remains marginal. Unlocking a larger share of the overall demand response potential would be possible by applying various technologies already available today, as well as by adjusting market frameworks and regulatory mechanisms accordingly across different sectors.” 

Source :  https://www.iea.org/reports/electricity-2026/flexibility   (2026)

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