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Energy flexibility

How to cope with rising electricity prices: energy flexibility and Virtual Power Plant

In the face of electricity price hikes, discover how large C&I energy users respond with a sustainable and effective energy management strategy.

Korea Electric Power Company (KEPCO), South Korea's electricity company, has decided to freeze electricity prices for the second quarter of 2024. In 2023, KEPCO raised the rates three times: by 13.1 KRW per kilowatt hour (kWh) in the first quarter, 8 KRW in the second quarter and 10.6 KRW in the fourth quarter, which was confined to commercial electricity use. Industry watchers, however, anticipate that KEPCO will continue to face pressure to raise prices this year as its losses continue to mount.1


In face of the rising electricity prices challenge, large commercial and industrial energy users can respond positively by utilizing flexible demand and joining virtual power plants to help stabilize the power grid, while also obtaining new revenue opportunities.

Energy balance is closely related to energy users

Balancing the electrical system is like keeping a seesaw steady while people of different weights are on it. It's about making sure the power we use matches the power being generated. Think of the energy supply and demand like a delicate duo dance, accurate coordination is required between a step forward or back. This concept has been on the radar for insiders, but to those who generally use energy, energy is just the drive to keep equipment operating and advance production. But when energy users help keep the balance of the electrical grid could mean activating new and pleasantly surprising cash flows.
Demand Response in South Korea

Demand Response

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We are talking about the concepts of energy flexibility, Demand Response, and the search for a balance between supply and demand. This issue is now more critical than ever in guaranteeing stability for the electrical grid, and is the perfect response to multiple consumption needs. And this search involves all the players in the energy system: no longer just energy producers, but those who consume it, store it, and are able to “return it” to the grid as well. These participants can also be rewarded for doing so.

The role of Demand Response in grid investments

In the Zero Emissions scenario, given the gradual electrification of end-users and the increase in the number of renewable energy plants, we are witnessing a growing electricity demand. A demand that “weighs” on the grid and obviously has an impact on transmission and distribution infrastructure. Grids, as well as the measures aimed at strengthening them and making them stronger and smarter, are therefore increasingly critical for the transition to clean energy.


By 2030, if we want to achieve the objectives of the 2050 Agenda on climate and energy sustainability, electricity use worldwide will have to increase by 20% over the previous decade. This is according to an IEA report from October 2023, Electricity Grids and Secure Energy Transitions, on the role grids play in the paradigm shift we are now seeing. In this scenario, grid expansion and diversification is key to supporting decarbonization, guaranteeing electricity supply, and effectively integrating renewable sources. By 2040, countries around the world will have to add or renew a total of more than 80 million kilometers of grid.

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See how much revenue you can earn for reducing your energy consumption with Demand Response

Thanks to Demand Response, these investments can be contained. New York is the world’s most energy-intensive habitat, they also used Demand Response programs to optimize energy management. Among the initiatives undertaken as part of the Big Apple’s Reforming the Energy Vision (REV) plan, the energy efficiency and load reduction program called Brooklyn-Queens Demand Management (BQDM) made it possible to avoid overloading the Brownsville substation, which would have needed a 1.2-billion-dollar upgrade to handle the stress created by the expected overload. All by integrating distributed technologies into the grid and supporting everything with Enel X’s DER Optimization Software and a demand response program to optimize substation load management by combining solar energy, fuel cells, building load, and batteries.

How to adjust energy demand

Electrical grids have always been based on a one-way flow, from producer to consumer, and on the classic market logic of supply and demand (if demand grows, supply must be increased).


However, we no longer have a grid of merely one-way flow based on the logic of demand that can be adjusted and adapted to supply. We are moving toward a more sustainable and circular paradigm, where energy consumers becomes energy prosumers, consumers – individuals, public administrations, and especially businesses – become main players together. Digitalization now allows companies to adjust their energy demand according to grid requirements, temporarily reducing it, for instance, when the grid is overloaded, and putting surplus energy from their assets on the market and unlock a new revenue stream.

Enel X VPP
This is the simple and useful mechanism at the foundation of Demand Response programs worldwide. Demand Response is a pillar in Enel X’s offering for B2B globally, we are the leader in the world’s Demand Response.

A growth strategy based on sustainability

DR programs are not only a useful tool for responding to the growing demand for electricity, improving grid stability, and managing the impact of renewables. They are also an advantageous solution for businesses wanting to increase their profits using sustainability, and for grid operators, who save on the expenses required to install new capacity.



At Enel X , we’ve accumulated significant expertise in this field, becoming a go-to partner that offers businesses targeted consulting and points them toward the best solutions. Enel X Flex is a cloud platform created by Enel X that provides C&I customers with various services to optimize consumption, maximize efficiency, and empower flexibility in an even more straightforward way.


DR programs are perfect for many different kinds of businesses. The only requirement is that companies be able to adjust, that is, temporarily reduce their consumption at certain times. Any company that owns machinery that does not require continuous operation machinery are able to participate. Enel X Flex protects the continuity of operations first and foremost, while guaranteeing participation in the best demand response programs, and maximizing profit.

The energy concealed in the cold

United States Cold Storage, a leading American cold storage logistics company, was a pioneer in participating in the Demand Response programs provided by Enel X. 15 years ago, the company, which used significant quantities of energy to support its core business, understood the program’s potential, entering into a partnership and quickly expanding it to over 20 distribution sites in the continental United States.


United States Cold Storage participated the DR program through temporarily shut down the freezer to reduce energy use. Because there are so many frozen products in the freezers, there is large thermal inertia—a decrease in refrigeration for the length of an event has no significant effect on the temperature in the freezers, and no risk to the operations of the refrigeration equipment. Merely in 2022, United States Cold Storage obtained an economic return of about 4 million dollars.

Demand flexibility appears to be the ideal solution for the massive industry of commercial refrigeration. Last July, Enel X Australia received financing of 3.7 million dollars from the Australian Renewable Energy Agency (ARENA) to support demand flexibility solutions in the refrigeration sector.


There is an energy treasure that has infinite opportunity hidden in cold storage that can be used be used: in Australia alone, it is estimated that over 500 MW of potential flexible demand can be fed back into the national electricity market. Enel X Korea now serves multiple cold storage businesses, and continue to recruit businesses with cold storage facilities to participate in the Demand Response market and support the energy transition.


Small changes, huge impact

Head of Flexibility Solutions, Enel X
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Small changes in energy use can have a huge impact if aggregated at scale.

Daniele Andreoli

Head of Flexibility Solutions, Enel X

Daniele Andreoli, Head of Global Flexibility Solutions at Enel X points out that "Small changes in energy use can have a huge impact if aggregated at scale." This is also where the advantage of Enel X's virtual power plant lies, as it aggregates numerous distributed flexible demands, enabling it to harness the power of aggregation to help stabilize the power grid.


Enel X’s customers can be found in all industries, currently in Korea includes those in retail, data centers, electronics, manufacturing, government offices, transportation, hotels, universities, and more. Participating in Demand Response programs with demand flexibility causes no obvious changes for energy users or, more importantly, any impact on product quality. And this helps decarbonize the grid, avoiding costly investments in building new power plants, and earning from the energy made available. Demand Response is a direct and efficient way to cope with electricity price impact for large energy users. And also a perfect ally for achieving Zero Emission goals.

1. Yonhap News Agency - Kang Yoon-seung. 2024, March 21. KEPCO to freeze electricity rates in Q2. https://en.yna.co.kr/view/AEN20240321001800320  

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