Thesis Defence: Diagnosing Demand Flexibility - On the limitations of price signals
On September 24th, Fouad El Gohary defended his thesis, with David Shipworth, Professor of Energy and the Built Environment at the UCL Energy Institute and Chair of the User-Centered Energy System Programme at the IEA, as the opponent. He summarized Fouad’s thesis with the following sentence - "involuntarily "empowered" customers are failing to receive and understand a poorly designed signal in a badly structured energy system".
The thesis concerns the topic of demand-side flexibility (DSF), which is a policy approach that seeks to adjust electricity demand in ways that help electricity grids cope with problems like increasing power intermittency and capacity constraints, and in doing so, can help accerlate the energy transition.
The research also critiques the broader reliance on price signals as the primary policy instrument for fostering demand-side flexibility. Fouad describes this phenomenon as the “price signal paradigm”, which is characterized by a perception of users as price-responsive utility maximizers and the prioritization of free markets and minimal government involvement. He argues that this approach, rooted in free-market principles, places too much responsibility on users. The findings suggest that instead of relying on users to respond to price signals, policymakers should explore system-level solutions to better coordinate demand-side flexibility.