According to the latest 2012 report on Demand Response and Advanced Metering from the Federal Energy Regulatory Commission (FERC), based on survey data from almost 2,000 U.S. utilities, grid operators, power marketers, state and federal agencies, and other demand response (DR) providers, the DR market continues to grow at a solid pace.  Examining both potential and actual peak load reduction, the FERC finds that the reported potential peak reduction is 66.4 megawatts (MW), or about 9.2% of U.S. peak demand and an increase of 25% since the same survey was conducted in 2010.  In terms of actual peak reduction, the FERC reports a total of 20.3 MW, an increase of about 27% from the 2010 survey.

Every customer category reported an increase of peak reduction from 2010, but given the amount of load that commercial and industrial (C&I) customers are able to curtail during a DR peak event, C&I is by far the largest – it’s 3 to 4 times larger than the residential sector – and the fastest growing customer segment (31% since 2010).  For example, the Oklahoma Gas and Electric (OG&E) time-of-use (TOU) program has expanded considerably during the last 2 years, adding nearly 900 MW of DR capability from its C&I customers between 2010 and 2012.

Of the total reported potential peak reduction, 80% can be attributed to four major DR programs:

• Load as a capacity resource (mostly C&I customers) – 29%
• Interruptible load (mostly C&I customers) – 24%
• Direct load control (mostly residential customers) – 15%
• Time-of-use  (mostly residential customers) – 12%

With the exception of TOU, which has been in existence for many decades in the United States, the newer price-based DR programs, such as critical peak pricing (CPP), real-time pricing (RTP), and peak time rebate (PTR), have not yet achieved a significant penetration in the market.  According to the report, these three schemes only account for 3.8% of reported potential peak reduction.  It is also noteworthy that a very small percentage of the study respondents (about 2%) are reporting peak load reduction from the most advanced types of DR, such as ancillary (e.g. spinning reserves) and regulation services.

This report indicates that the U.S. DR market continues to be led by more conventional programs that focus on peak load reduction.  The market appears to be shifting very slowly toward more sophisticated programs, such as dynamic pricing schemes or even ancillary and regulation services, that focus primarily on load balancing when the grid is experiencing stress from either too little or too much power ‑ from intermittent renewables, for instance.