Demand Response for Commercial & Industrial Markets

Market Players and Dynamics, Key Technologies, Competitive Overview,
and Global Market Forecasts

Demand response (DR) is a concept that harkens back to the 1970s, when it was first employed in the United States. At that time, DR was implemented as a component of the energy conservation focus of demand-side management (DSM) programs to encourage consumers to use less electricity during peak hours or to shift their energy use to off-peak times. Utilities have offered interruptible rates to commercial and industrial (C&I) customers for many years.

Since 2010, C&I DR programs have matured in the electricity market and have been afforded the opportunity to bid directly against generation. However, they have also fallen under greater scrutiny. As DR has become a larger part of the resource base, regulators and other market participants are calling for tighter requirements to ensure reliable operations and efficient markets. There are general economic market factors, like low natural gas prices and coal and nuclear retirements, that affect the growth path of DR, as well. Currently, almost all of the C&I DR activity is taking place in the United States. This leadership position is expected to erode over the next 10 years, though, as all world regions continue or start the pilot phase of DR and then build out full-scale markets or programs. According to Navigant Research, global C&I DR capacity is expected to grow from 26.8 GW in 2014 to 132.3 GW in 2023.

This Navigant Research report examines the C&I DR market in five major geographic regions. The study provides an analysis of the major market drivers and barriers, as well as global market players and dynamics, associated with C&I DR. Global market forecasts for C&I DR capacity, sites, and revenue, broken out by segment and region, extend through 2023. The report also examines the key technologies related to C&I DR, as well as the competitive landscape.

Key Questions Addressed:
  • What market drivers are incentivizing commercial and industrial (C&I) demand response (DR) to expand in the United States and abroad?
  • What factors may inhibit global C&I DR expansion?
  • What new technologies are enabling C&I DR to increase its penetration in the market?
  • Who are the major competitors in the C&I DR arenas?
  • How fast will C&I DR grow in various regions around the world through 2023?
Who needs this report?
  • Demand response management system (DRMS) vendors
  • Curtailment service providers (CSPs)
  • Independent system operators/ regional transmission organizations (ISOs/RTOs)
  • Utilities
  • Large commercial and industrial (C&I) customers
  • Government agencies
  • Investor community

Table of Contents

1. Executive Summary

1.1  Introduction to Commercial and Industrial Demand Response

1.2  DR Market Drivers and Barriers

1.3  Technology Evolution in the DR Market

1.4  DR Market Size and Forecast

2. Market Issues 

2.1  History and Evolutionary Path of Demand Response in the United States

2.2  Definition of DR

2.2.1   Navigant Research Definition

2.3  Commercial Building DR

2.3.1   Types of Commercial Customers

2.4  Industrial Facility DR

2.4.1   Industrial Market Segments

2.5  DR Market Barriers

2.5.1   Market Rules and Comparability

2.5.2   Changes in DR Event Patterns

2.5.3   Natural Saturation

2.5.4   Compliance Risk

2.5.5   Environmental Compliance

2.5.6   Broader Market Trends

2.6  DR Market Drivers

2.6.1   Coal and Nuclear Plant Retirements

2.6.2   Grid Modernization

2.6.3   Ancillary Services Markets

2.6.4   Renewable Energy Integration

2.6.5   Automated DR

2.6.6   Dynamic Pricing

2.6.7   Demand Management

2.6.8   Leadership in Energy and Environmental Design (LEED)

2.6.9   EVs

3. Global DR Market Players and Dynamics  

3.1  Introduction

3.2  North America

3.2.1   FERC

   3.2.1.1  FERC Orders 745 and 755

   3.2.1.2  FERC DR Compliance Activities

3.2.2   PJM

   3.2.2.1  Capacity Market

   3.2.2.2  Ancillary Services Markets

3.2.3   NYISO

   3.2.3.1  Capacity Market

   3.2.3.2  Other Markets

   3.2.3.3  Con Edison

3.2.4   ISO-NE

   3.2.4.1  Capacity Market

   3.2.4.2  Winter Reliability Program

   3.2.4.3  Ancillary Services Markets

3.2.5   Texas

   3.2.5.1  Other DR Players in Texas

3.2.6   California

   3.2.6.1  California Title 24

3.2.7   Midcontinent Independent System Operator

3.2.8   Vertically Integrated Utilities

3.2.9   Advanced Energy Management Alliance

3.2.10   Canada

3.3  Europe

3.3.1   Regulatory Barriers

3.3.2   Climate Change Concerns

3.3.3   Intermittent Renewables

3.3.4   Capacity Markets

3.3.5   European Players

   3.3.5.1  European Commission

   3.3.5.2  TSOs and Distribution Network Operators

   3.3.5.3  Smart Energy Demand Coalition

   3.3.5.4  France

   3.3.5.5  Germany

   3.3.5.6  Ireland

   3.3.5.7  Switzerland

   3.3.5.8  United Kingdom

3.4  Asia Pacific

3.4.1   China

3.4.2   Japan

3.4.3   South Korea

   3.4.3.1  KEPCO

3.4.4   Australia and New Zealand

   3.4.4.1  TransGrid

   3.4.4.2  Ergon Energy

3.4.5   Singapore

3.5  Middle East & Africa

4. Technology Issues

4.1  Introduction

4.2  Commercial DR Technology

4.3  Industrial DR Technology

4.4  Types of Technologies

4.4.1   Constellation’s VirtuWatt Link

4.5  DRMSs

5. Key Industry Players  

5.1  Introduction

5.2  Major National and International C&I DR Providers

5.2.1   Comverge

5.2.2   Constellation Energy

5.2.3   EnerNOC

5.2.4   Honeywell International

5.2.5   Schneider Electric

5.3  Smaller and Regional C&I DR Providers

5.3.1   Demansys Energy

5.3.2   Direct Energy

5.3.3   ENBALA Power Networks

5.3.4   Energy Curtailment Specialists

5.3.5   Johnson Controls, Inc.

5.3.6   KiWi Power

5.3.7   Powerit Solutions

5.3.8   REGEN Energy

5.3.9   Siemens

5.4  Other Industry Participants

6. Market Forecasts 

6.1  Forecast Introduction

6.2  Assumptions Guiding this Forecast

6.3  A Note on Report Scope and Market Sizing

6.4  Global C&I DR Capacity

6.5  Global C&I DR Sites

6.6  Global DR Revenue

6.7  Conclusions and Recommendations

7. Company Directory
8. Acronym and Abbreviation List
9. Table of Contents
10. Table of Charts and Figures
11. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

  • C&I DR Capacity by Region, World Markets: 2014-2023
  • Share of C&I DR Capacity by Region, World Markets: 2014
  • Share of C&I DR Capacity by Region, World Markets: 2023
  • CAGR of C&I DR Capacity by Region, World Markets: 2014-2023
  • Industrial DR Capacity by Region, World Markets: 2014-2023
  • Commercial DR Capacity by Region, World Markets: 2014-2023
  • C&I DR Sites by Region, World Markets: 2014-2023
  • Industrial DR Sites by Region, World Markets: 2014-2023
  • Commercial DR Sites by Region, World Markets: 2014-2023
  • C&I DR Revenue by Region, World Markets: 2014-2023
  • Industrial DR Revenue by Region, World Markets: 2014-2023
  • Commercial DR Revenue by Region, World Markets: 2014-2023
  • DR in Europe: 2013-2014
  • C&I Automated DR Process Flow

List of Tables

  • U.S. Utilities Offering DR Programs Outside of RTO/ISO Markets
  • Comverge SWOT Analysis
  • Constellation SWOT Analysis
  • EnerNOC SWOT Analysis
  • Honeywell SWOT Analysis
  • Schneider Electric SWOT Analysis
  • Other Industry Participants
  • C&I DR Capacity by Region, World Markets: 2014-2023
  • Industrial DR Capacity by Region, World Markets: 2014-2023
  • Commercial DR Capacity by Region, World Markets: 2014-2023
  • C&I DR Sites by Region, World Markets: 2014-2023
  • Industrial DR Sites by Region, World Markets: 2014-2023
  • Commercial DR Sites by Region, World Markets: 2014-2023
  • C&I DR Revenue by Region, World Markets: 2014-2023
  • Industrial DR Revenue by Region, World Markets: 2014-2023
  • Commercial DR Revenue by Region, World Markets: 2014-2023
  • Share of C&I DR Capacity by Region, World Markets: 2014 and 2023
  • Year-to-Year Growth of C&I DR Capacity, World Markets: 2015-2023
  • CAGR of C&I DR Capacity by Region, World Markets: 2014-2023
  • Year-to-Year Growth of C&I DR Revenue, World Markets: 2015-2023

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