Strengths, weaknesses, opportunities and threats of demand response in district heating and cooling systems. From passive customers to valuable assets

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Buildings can deliver short-term thermal energy storage by utilising the thermal capacity of the building construction and/or by activating the water tanks included in the heating/cooling installation. The flexibility potential of demand management using decentralized thermal energy storage has been quantified in many theoretical modelling studies, and it is considered an essential technology for an affordable energy transition. We have investigated the drivers and barriers to the adoption of demand management in buildings in district heating and cooling systems via a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis and presented 17 elements that shape the current and future application of this concept. The results indicate that the application of the DR concept has left the theoretical studies and moved towards real-life applications. Yet, there is a lack of feasible business models and regulatory frameworks supporting the large-scale application of the concept. Utilities and their customers do not fully understand the benefits of the DR concept; therefore they are reluctant to adopt it outside of the research projects where the test environment is fully controlled and with limited impact and timeline. Therefore, the regulatory framework must be adjusted to allow DHC operators to develop new business models and DR tariffs that will incentivise the customers to deliver flexibility to the system without compromising their comfort and everyday practices and increasing energy poverty.