Demand Response for Industrial Markets

Industrial Peak Load Curtailment and Payments:
Global Market Analysis and Forecasts

Since the inception of demand response (DR) in the mid-1970s, electricity consumers in the industrial sector have represented an important target market in the United States. But, as DR is increasingly adopted in other parts of the world, industrial facilities will also become a critical customer segment in other countries. While the commercial sector presents excellent prospects for DR because of the sheer number of facilities in the world, the industrial sector offers unique opportunities because it is able to contribute unusually large amounts of load reduction – even from just one plant. As a result, large industrial or manufacturing sites have been considered the low-hanging fruit by DR providers.

Although there is no data about the DR participation rate of industrial customers in the United States or elsewhere in the world, it is reasonable to assume that their overall contribution of load curtailment is proportionately much larger than the commercial customer segment. DR participation by industrial consumers to a great extent depends on the flexibility of the production process. Navigant Research forecasts that industrial peak load reduction will grow from 26.8 gigawatts (GW) in 2013 to reach 62 GW by 2019. The North American region, mainly the United States, represents the lion’s share of industrial peak reduction throughout the forecast period.

This Navigant Research report examines the global market for industrial demand response, detailing the breakdown of peak load curtailment into two major customer segments: small/medium and large/very large industrial customers. The report provides data on how much these different industrial DR participants receive in payments by utilities, grid operators, or aggregators when they reduce their load at peak times. The market forces and competitive landscape are explored in depth, and 21 industrial DR vendors are profiled. The report also provides forecasts for industrial peak load curtailment, in terms of capacity, and reduction payments, broken down by region and by market segment.

Key Questions Addressed:
  • What are the various market forces driving and inhibiting growth with respect to the industrial DR market?
  • How will the industrial DR market evolve over the next 7 years?
  • How will industrial DR technology evolve over the next 7 years?
  • How much MW peak load curtailment is generated by industrial DR participants, by region?
  • What are peak load curtailment payment opportunities for participants in the industrial DR market?
  • Who are the key players in the industrial DR market?
Who needs this report?
  • Electric utilities and grid operators
  • Power generation companies
  • Curtailment service providers
  • Consulting firms and systems integrators
  • IT vendors
  • Smart grid hardware and software vendors
  • Industry associations
  • Standards development organizations
  • Government agencies and energy policymakers
  • Investor community

Table of Contents

1. Executive Summary

1.1   Introduction

1.1.1     Market Opportunity

1.1.2     Market Forces

1.1.3     Competitive Landscape

2. Market Issues

2.1   Introduction

2.1.1     Lucrative Incentives

2.2   Definitions

2.2.1     The Industrial Sector

2.2.1.1     Industry Market Segment

2.2.2     Demand Response

2.3   Industrial DR Participation and Load Curtailment

2.3.1     Examples of DR Participation and Load Curtailment

2.3.1.1     E. & J. Gallo Winery

2.3.2     Type of DR Program Participation by Industrial Customers

2.3.2.1     Direct Load Control and Interruptible Load Programs

2.3.2.2     Time-of-Use Pricing Programs

2.3.2.3     Dynamic Pricing Programs: Critical Peak Pricing, Real-Time Pricing, and Peak Time Rebate

2.4   Market Drivers and Inhibitors of Industrial DR Growth

2.4.1     Drivers

2.4.1.1     Incentives for DR Participation

2.4.1.2     Energy Cost Savings and Demand Charges

2.4.1.3     Rising Electricity and Peak Prices

2.4.1.4     Greenhouse Gas or Carbon Dioxide Emissions Reduction

2.4.1.5     Renewable Resources of Wind and Solar Power

2.4.1.6     Regulations

2.4.1.7     Automated DR and Other Technology Advancements

2.4.2     Inhibitors

2.4.2.1     Decline of Natural Gas Prices

2.4.2.2     Cost of Retrofitting a Manufacturing Plant for DR

2.4.2.3     Complexity of Manufacturing Operation and Lack of Flexibility

2.4.2.4     Inability to Participate in ADR

2.4.2.5     Lack of Understanding of the Benefits and Risks

2.5   Regional Industrial Demand Response Trends

2.5.1     North America

2.5.1.1     The United States

2.5.1.2     Canada

2.5.2     Europe

2.5.2.1     The United Kingdom

2.5.2.2     Ireland

2.5.2.3     France

2.5.3     Asia Pacific

2.5.3.1     Australia and New Zealand

2.5.3.2     South Korea

2.5.3.3     China and Hong Kong

2.5.3.4     Japan

2.5.3.5     India

2.5.4     Latin America

2.5.5     Middle East and Africa

2.5.5.1     South Africa

2.5.5.2     Israel

2.5.5.3     Saudi Arabia

3. Technology Issues

3.1   Introduction

3.2   Types of Technologies

3.2.1     SCADA System

3.2.2     Programmable Logic Controllers

3.2.3     Load Control Switches

3.2.3.1     Intelligent Native Controllers

3.2.4     Automated versus Manual DR

3.2.4.1     Communication Protocol for ADR – OpenADR

3.2.5     Demand Response Management System

3.2.6     Telemetry

4. Key Industry Players

4.1   Introduction

4.1.1     Hardware and Software Companies

4.1.2     Services

4.1.3     Aggregation Services

4.1.4     A Winning Value Proposition

4.2   Industrial DR Vendor Profiles

4.2.1     AutoGrid Systems

4.2.2     Calico Energy Services

4.2.3     Constellation

4.2.4     Cooper Power Systems

4.2.5     Echelon

4.2.6     ENBALA Power Networks

4.2.7     Energy Pool

4.2.8     EnerNOC

4.2.9     Honeywell

4.2.10   Itron

4.2.11   Johnson Controls Inc.

4.2.12   KiWi Power

4.2.13   Pacific Gas and Electric

4.2.14   PJM Interconnection

4.2.15   Powerit Solutions

4.2.16   REGEN Energy

4.2.17   Rodan Energy

4.2.18   Schneider Electric

4.2.19   The Smart Energy Demand Coalition

4.2.20   Siemens

4.2.21   Ventyx, an ABB Company

4.3   Other Industrial DR Participants

5. Market Forecasts

5.1   Introduction

5.1.1     Market Conditions for Industrial DR

5.1.2     Assumptions Guiding this Forecast

5.2   Worldwide Industrial DR Peak Load Curtailment

5.2.1     Regional Peak Load Curtailment

5.2.1.1     New Peak Load Curtailment

5.2.1.2     Peak Load Curtailment by Different Industrial Market Segments

5.2.2     Industrial Peak Load Curtailment Payments

5.2.3     Industrial Peak Load Curtailment Payments by Market Segment

5.3   Conclusions and Recommendations

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

List of Charts and Figures

  • Industrial ADR Process Flow
  • Reported Potential Peak Load Curtailment by Year and Customer Segment: 2006-2012
  • Industrial Peak Load Curtailment by Region, World Markets: 2012-2019
  • Industrial Peak Load Curtailment Year-on-Year Growth by Region, World Markets: 2012-2019
  • New Industrial Peak Load Curtailment by Region, World Markets: 2012-2019
  • New Industrial Peak Load Curtailment CAGR by Region, World Markets: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, World Markets: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, North America: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Europe: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Asia Pacific: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Latin America: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Middle East & Africa: 2012-2019
  • Industrial Peak Load Curtailment Payments by Region, World Markets:  2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, World Markets:  2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, North America:  2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, Europe:  2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, Asia Pacific:  2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, Latin America:  2012-2019
  • Industrial Peak Load Curtailment Payment by Market Segment, Middle East & Africa:  2012-2019
  • Industrial Peak Load Curtailment Payment Year-on-Year Growth by Region, World Markets: 2012-2019

List of Tables

  • AutoGrid Systems SWOT Analysis
  • Calico Energy Services SWOT Analysis
  • Constellation SWOT Analysis
  • Cooper Power Systems SWOT Analysis
  • Echelon SWOT Analysis
  • ENBALA SWOT Analysis
  • Energy Pool SWOT Analysis
  • EnerNOC SWOT Analysis
  • Honeywell SWOT Analysis
  • Itron SWOT Analysis
  • JCI SWOT Analysis
  • KiWi Power SWOT Analysis
  • Powerit Solutions SWOT Analysis
  • REGEN SWOT Analysis
  • Rodan Energy SWOT Analysis
  • Schneider Electric SWOT Analysis
  • Siemens SWOT Analysis
  • Ventyx SWOT Analysis
  • Other Industry Participants in Industrial DR
  • Industrial Peak Load Curtailment by Region, World Markets: 2012‑2019
  • Industrial Peak Load Curtailment Year-on-Year Growth by Region, World Markets: 2012-2019
  • New Industrial Peak Load Curtailment by Region, World Markets: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, World Markets: 2012-2019
  • Industrial Peak Load Curtailment Market Share by Market Segment, North America: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, North America: 2012-2019
  • New Peak Load Curtailment by Industrial Market Segment, North America: 2012-2019
  • Industrial Peak  Load Curtailment Market Share by Market Segment, Europe: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Europe: 2012-2019
  • New Peak Load Curtailment by Industrial Market Segment, Europe: 2012-2019
  • Industrial Peak Load Curtailment Market Share by Market Segment, Asia Pacific: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Asia Pacific: 2012-2019
  • New Peak Load Curtailment by Industrial Market Segment, Asia Pacific: 2012-2019
  • Industrial Peak Load Curtailment Market Share by Market Segment, Latin America: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Latin America: 2012-2019
  • New Peak Load Curtailment by Industrial Market Segment, Latin America: 2012-2019
  • Industrial Peak Load Curtailment Market Share by Market Segment, Middle East & Africa: 2012-2019
  • Industrial Peak Load Curtailment by Market Segment, Middle East & Africa: 2012-2019
  • New Peak Load Curtailment by Industrial Market Segment, Middle East & Africa: 2012-2019
  • Industrial Peak Load Curtailment Payments by Region, World Markets: 2012-2019
  • Industrial Peak Load Curtailment Year-on-Year Payment Growth by Region, World Markets: 2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, World Markets: 2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, North America: 2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, Europe: 2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, Asia Pacific: 2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, Latin America: 2012-2019
  • Industrial Peak Load Curtailment Payments by Market Segment, Middle East & Africa: 2012-2019

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