U.S. demand response market trends


Key drivers for continued growth in the commercial and industrial demand response markets in the United States are customer ROI combined with targeted utility incentives and ISO capacity markets, the Peak Load Management Alliance’s (PLMA) latest Demand Response Market Trends Survey has revealed.

However, the biggest challenges to increased C&I participation remain technology and its implementation and a payback that is not compelling, along with a lack of both internal resources and knowledge.

The biannual survey, which was released ahead of the PLMA’s Fall conference, involved 65 individuals from utilities and the broader demand response (DR) industry.

Some of the key trends identified in the survey are:

  • Outsourced service providers and sales people are considered the best techniques for DR to achieve mass market penetration
  • Targeted utility programs and education are the best ways for DR to achieve more market penetration in the commercial building space
  • Building automation and/or controls software along with energy efficiency and DR building solutions and monitoring and decision automation are the technology areas with the most growth potential for DR
  • Predictability of customer response is the biggest T&D planning challenge for utilities due to DR
  • Demand response is up there with energy storage as among the best ways to handle the impact of the variable nature of solar and wind on the grid.

The survey also revealed that over 80% of the companies participating have either adopted OpenADR2 or plan to in the near future.

“The survey indicates that technology and service provider communities have adopted standards, driven costs down and have made customer adoption of DR a more compelling and easier proposition,” said Ross Malme, PLMA Executive Committee member and partner at Skipping Stone, which conducted the survey. “To truly derive the grid and environmental benefits demand response can deliver, there is considerably more customer participation needed. To facilitate further customer adoption, the market will also need regulators and utilities to offer economically viable customer incentive programs as well.”

However, of surprise in the survey was the level of concern to cyber security, with participants equally split between ranking it as a priority 1, 2 or 3 concern or as not of a priority. For those who ranked it as a priority the top areas of concern are operational security risks, people and policy security risks, and network/platform security risks.

To view the survey click HERE

By Jonathan Spencer Jones