by Brianna Crandall — April 1, 2016—New analysis from growth partnership company Frost & Sullivan, Global Demand Response Trends, analyzes the scope of voluntary “demand response” (DR) programs on the demand side and studies the components of load reduction and load shifting.
Demand response (DR) was conceived and implemented to offer emergency response and peak load management, enabling consumers to lower power demand and help prevent widespread blackouts while at the same time reducing their energy costs and carbon footprint. As the nature of grids evolves, DR has become a vital power system tool, notes Frost & Sullivan.
The new report finds that while North America continues to be the hub of DR programs, European countries are making massive changes to their fuel mix with an ever-increasing proportion of renewables. In Asia, South Korea and Japan are attractive markets, while the Australian market is still at the nascent stage.
Frost & Sullivan Energy and Environment Senior Industry Analyst Pritil Gunjan commented:
DR programs have evolved into a complete demand side management of energy and power. Extreme weather variations, declining energy reserves and the introduction of numerous distributed-generation technologies have made it vital for utilities to seek newer models supporting energy efficiency and energy management initiatives.
Utilities are also attracted to DR programs due to their dynamic pricing and tariff structures, the report found. While the United States leads in terms of DR development, Europe and Asia are emerging as hot markets for smart meters and thermostats. The United Kingdom, China, Japan and South Korea have recognized the value of DR in helping them achieve their emission targets while providing cleaner and efficient energy during peak times.
Frost & Sullivan says it is crucial to further stoke this interest in DR through regional regulations and policies that will facilitate coordination and integration efforts between utilities and consumers. With governments across the world promoting the use of renewable energy (RE) resources, DR management will play a crucial role in integrating RE sources into the grid during peak demand times.
Significantly, aggregators will play an important role across the DR value chain by managing energy system integrations, according to the report. Utilities in the distributed generation market will seek to actively resolve regulatory and market challenges so they can optimally tap the aggregator-utility model.
The sharing of costs and benefits accrued from DR models across the various stakeholders is another point of contention, notes the report. Utilities are looking to mitigate this problem and encourage the adoption of DR programs by offering greater clarity on the issues of tariff and financial incentives in their business models.
Gunjan noted:
RE investments and distributed generation, which are top trends in the global energy market, will also greatly boost the DR market beyond 2020. The higher investments in innovative technology will aid the smoother rollout of DR programs. Customer interfaces and automated technologies will enable a transparent and secure DR implementation.
Global Demand Response Trends is part of Frost & Sullivan’s Energy and Power Growth Partnership Service program. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
