Product Code: DR-10
The primary goal of Demand Response (DR) is to reduce electricity consumption
during periods of peak demand. An innovative combination of technology and
business relationships, DR holds the promise of significant economic,
environmental, and social benefits. Most notably, it helps utilities avoid the
high capital costs of constructing peaking power plants that are only used a
few days a year. Instead, the utility can implement DR networks at a fraction
of the cost.
The DR market is currently nascent and fragmented. Pike Research anticipates
that as the DR market matures, major Energy Service Companies (ESCOs) and IT
players will invest in the space, boosting revenues and making DR products and
services more sophisticated and attractive to utilities and end-users. After
this period of consolidation and evolution, Pike Research expects that DR will
become less of a discrete market and more of an application within a greater
energy efficiency suite. Pike Research forecasts that, in the midst of these
changes, DR revenues will grow at a 17% compound annual growth rate (CAGR)
from 2010 to 2020, resulting in an annual market of more than $8 billion by
2020.
This Pike Research report examines the market for demand response products and
services in the commercial, industrial, and residential sectors. The study
analyzes market issues and demand drivers, including the effects of demand
response programs, legislative and regulatory issues, customer incentives, and
dynamic pricing structures. Additionally, the report includes three different
forecast scenarios that quantify the demand response market opportunity
through 2020.
Key questions addressed:
- What are the key dynamics of the commercial demand response market?
- What are the key dynamics of the industrial demand response market?
- What are the key dynamics of the residential demand response market?
- What are best practices for a utility demand response program?
- How will the competitive landscape evolve over the next several years?
- What are the key technologies that will be utilized for demand response?
- What is the overall market opportunity for demand response under different
legislative and economic scenarios?
Table of Contents
1. Executive Summary
2. Market Overview
- 2.1 Definitions
- 2.1.1 U.S. Department of Energy
- 2.1.2 National Institute of Standards and Technology
- 2.1.3 Federal Energy Regulatory Commission
- 2.1.4 North American Electric Reliability Corporation
- 2.1.5 Pike Research
- 2.2 Demand Response Benefits
- 2.3 Demand Response Potentials
- 2.4 Demand Response Working Structure
- 2.5 FERC Demand Response Assessment
- 2.5.1 Business-as-Usual:
- 2.5.2 Expanded Business-as-Usual:
- 2.5.3 Achievable Participation
- 2.5.4 Full Participation
- 2.6 Commercial and Industrial Market Drivers
- 2.6.1 Growing Demand for Energy
- 2.6.2 Low Cost to Implement Demand Response
- 2.6.3 Need for Grid Intelligence, Stability, and Efficiency
- 2.6.4 Alternatives
- 2.6.5 Peak Demand
- 2.6.5.1 Cost Reduction for End-Users / Utilities
- 2.6.5.2 Corporate Sustainability
- 2.6.5.3 Nascent Market Dynamics
- 2.6.5.4 Renewable Distributed Energy Generation and Energy Storage
- 2.7 Commercial and Industrial Market Barriers
- 2.7.1 Additional Units of Energy
- 2.7.2 Market Maturity
- 2.7.3 Traditional IT Entrants
- 2.7.4 Construction of More Efficient Buildings
- 2.7.5 Lackluster Legislation and Funding
- 2.8 C&I Applications vs. Residential Applications
- 2.9 Residential
- 2.9.1 Drivers
- 2.9.1.1 Smart Grid Technologies
- 2.9.1.2 Decelerating Growth Rate in Commercial and Industrial
- 2.9.1.3 Difficult for Competition to Enter
- 2.9.2 Barriers
- 2.9.2.1 C&I Sector is the Low-Hanging Fruit of the Industry
- 2.9.2.2 Big Brother
- 2.10 Price-Based Demand Response
- 2.10.1 Real-Time Pricing
- 2.10.2 Time-of-Use Pricing
- 2.10.3 Critical Peak Pricing
- 2.11 Incentive Based Programs
- 2.12 Curtailment Service Providers
- 2.13 IT Players in Demand Response
3. Regulatory Landscape
- 3.1 Demand Response-Related Legislation
- 3.1.1 EISA 2007
- 3.1.2 Federal Electricity Peak Demand Reduction Standard
- 3.1.3 Carbon Cap and Trade
- 3.1.4 Federal Energy Regulatory Commission
- 3.1.5 Renewable Portfolio Standards
- 3.1.6 National Institute of Standards and Technology
- 3.2 ISO/RTO Structure
- 3.3 Decoupling
4. Technology Issues
- 4.1 Hardware
- 4.1.1 Smart Meters
- 4.1.2 Load Management Devices
- 4.1.2.1 Load Control Module
- 4.1.2.2 Energy Information Displays
- 4.1.2.3 Smart Thermostats
- 4.1.3 Automation Controls
- 4.1.4 Energy Management Systems
- 4.1.4.1 EMS Hardware
- 4.1.4.2 EMS Software
- 4.2 Automatic Demand Response
- 4.2.1 OpenADR
- 4.2.1.1 OpenADR SWOT Analysis
- 4.2.1.1.1 Strengths
- 4.2.1.1.2 Weaknesses
- 4.2.1.1.3 Opportunities
- 4.2.1.1.4 Threats
- 4.2.1.2 Utilities Offering OpenADR
- 4.2.1.2.1 Pacific Gas & Electric
- 4.2.1.2.2 Southern California Edison
- 4.2.1.2.3 San Diego Gas & Electric
- 4.2.2 OpenADR News
- 4.3 Verticals - System Management
- 4.3.1 Retail
- 4.3.2 Manufacturing
- 4.3.3 Healthcare
- 4.3.4 Grocery
- 4.3.5 Office
- 4.3.6 Hospitality
- 4.3.7 Education
- 4.3.8 Agriculture
5. Competitive Landscape
- 5.1 Bridge Energy Group
- 5.2 Constellation NewEnergy
- 5.3 CPower
- 5.4 Comverge, Inc.
- 5.5 Cooper Power Systems
- 5.6 Eisenbach Consulting
- 5.7 EnergyConnect Group, Inc.
- 5.8 Energy Curtailment Specialists, Inc.
- 5.9 EnerNOC
- 5.10 Honeywell
- 5.11 IBM
- 5.12 Infotility
- 5.13 Pacific Gas & Electric
- 5.14 Powerit Solutions
- 5.15 Southern California Edison
- 5.16 Viridity Energy
- 5.17 Verisae
- 5.18 Ziphany
6. Sample Utility Demand Response Program
- 6.1 Pacific Gas & Electric Demand Response - Large Commercial &
Industrial/Aggregator
- 6.2 Participation Levels
- 6.2.1 Peak Choice Committed
- 6.2.2 Measurement and Verification
- 6.2.3 Peak Choice Program Qualifications
- 6.2.4 Peak Choice Best Effort
- 6.2.5 Measurement & Verification
- 6.2.6 Advance Notice
- 6.2.7 Base Interruptible Program
- 6.2.7.1 Option A:
- 6.2.7.2 Option B:
- 6.2.8 Critical Peak Pricing
- 6.2.9 Demand Bidding Program
- 6.2.9.1 Day-ahead events
- 6.2.9.2 Day-of events
- 6.2.10 Aggregator Programs
- 6.2.10.1 Aggregator Managed Portfolio
- 6.2.11 Capacity Biding Program
- 6.2.11.1 Qualified aggregators
- 6.2.12 Demand Response - Small Commercial/Other Programs
- 6.2.13 Scheduled Load Reduction Program
- 6.2.14 Optional Binding Mandatory Curtailment Plan
- 6.2.15 Automated Demand Response Program (Auto DR)
- 6.2.16 Technology Incentive Program
- 6.2.17 Energy Orb
7. Market Forecasts
- 7.1 Total Demand Response Market
- 7.2 Total Megawatts Under Contract
- 7.2.1 Megawatts Under Contract Forecast
- 7.3 Total Demand Response Revenues
- 7.3.1 2010 through 2012
- 7.3.2 2013 through 2015
- 7.3.3 2016 through 2020
- 7.4 Legislative Forecasts
- 7.4.1 2010 through 2012
- 7.4.2 2013 through 2015
- 7.4.3 2016 through 2020
- 7.4.4 Aggressive Scenario Assumptions
- 7.4.4.1 2010 through 2012
- 7.4.4.2 2013 through 2015
- 7.4.4.3 2016 through 2020
- 7.5 Smart Meters
- 7.5.1 2010 through 2012
- 7.5.2 2013 through 2015
- 7.5.3 2016 through 2020
- 7.6 Fragmented DR Market Predictions
- 7.6.1 Energy Service Companies
- 7.6.2 Energy Efficiency Platform
- 7.6.3 Energy Management Systems
- 7.6.4 Energy Efficiency Market
- 7.7 Residential, Commercial, Industrial Market Analysis
8. Acronym and Abbreviation List
9. Table of Contents
10. Table of Figures
11. Scope of Study, Sources and Methodology, Notes
List of Charts and Figures
- Total DR Market Revenue Forecast, Base and Average Scenarios, United
States: 2010-2020
- Peak Demand - Winter, Summer, and Average, United States: 2003-2012
- Estimated Demand Response Captured (MW) Commercial and Industrial, United
States: 2008
- Annual Electricity Usage by Segment, United States: 2008
- Smart Meter Unit Shipments and Installed Base Penetration, United States:
2008-2015
- Residential Electricity Usage per Household by Region, United States: 2008
- Total MW Under Contract, Demand Response Market, United States: 2009
- Total MW Under Contract, Base Scenario, Demand Response Market, United
States: 2015
- Total MW Under Contract, Average Scenario, Demand Response Market, United
States: 2015
- Total MW Under Contract, Aggressive Scenario, Demand Response Market,
United States: 2015
- Total DR Market Revenue Forecast, Base and Average Scenarios, United
States.: 2010-2020
- Total Demand Response Market Revenues Forecast, All Scenarios, United
States: 2010-2020
- Demand Response Potential, Peak Load Reduction, United States: 2009-2020
- Smart Meter Unit Shipments and Installed Base Penetration, United States:
2008-2015
- Total Potential Energy Efficiency Market for Commercial Buildings by
Usage, United States: 2009
- Price-Based and Incentive-Based Demand Response: Residential, Commercial,
and Industrial Sectors
- Demand Response Working Structure
- Projected United States Peak Demand by Scenario
- TOU with Critical Peak Pricing Period
- Price-Based and Incentive-Based Demand Response: Residential, Commercial,
and Industrial Sectors
- ISO/RTO Structure, North America
- State Electricity Decoupling; United States
- Demand Response Automation Server
- Client and Logic Integrated Relay Box
- AutoDR Event
- Residential Demand Response Market Analysis, United States: 2010-2020
- Commercial Demand Response Market Analysis, United States: 2010-2020
- Industrial Demand Response Market Analysis, United States: 2010-2020
List of Tables
- Total Demand Response Market Revenue Forecast, Base and Average Scenarios,
United States: 2010-2020
- Peak Demand - Winter, Summer, and Average, United States: 2003-2012
- Estimated Demand Response Captured (MW), Commercial and Industrial; United
States, 2008
- Annual Electricity Usage by Segment, United States: 2008
- Smart Meter Unit Shipments and Installed Base Penetration, United States:
2008-2015
- Residential Electricity Usage per Household by Region, United States: 2008
- Total MW Under Contract, Demand Response Market, United States: 2015
- Total MW Under Contract, Base Scenario, Demand Response Market, United
States: 2015
- Total MW Under Contract, Average Scenario, Demand Response Market, United
States: 2015
- Total MW Under Contract, Aggressive Scenario, Demand Response Market,
United States: 2015
- Total Demand Response Market Revenue Forecast, Base and Average Scenarios,
United States: 2010-2020
- Total Demand Response Market Revenue Forecast, All Scenarios, United
States: 2010-2020
- Demand Response Potential, Peak Load Reduction, United States: 2009-2020
- Smart Meter Unit Shipments and Installed Base Penetration, United States:
2008-2015
- Total Potential Energy Efficiency Market for Commercial Buildings by
Usage,United States: 2009
