Market Data: Demand Response

Commercial & Industrial and Residential Demand Response:
Global Capacity, Sites, Spending, and Revenue Forecasts

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

Since 2010, DR has matured in the electricity market and has been afforded the opportunity to bid directly against generation. However, it has 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 (e.g., low natural gas prices and coal and nuclear retirements) that affect the growth path of DR, as well. While the region of greatest adoption is expected to be North America (primarily centered in the United States), other regions will eventually start to implement DR programs and markets. According to Navigant Research, global DR capacity is expected to grow from nearly 39 GW in 2016 to 144.0 GW in 2025.

This Navigant Research report examines the global DR market in five major regions, with a focus on C&I and residential DR. The study provides an analysis of the market issues, including drivers and barriers, associated with DR development. Global market forecasts for capacity, spending, and revenue, segmented by region and sector, extend through 2025. The report also examines the key global technologies and program design trends related to DR.

Key Questions Addressed:
  • What market drivers are incentivizing demand response (DR) to expand in the United States and abroad?
  • What factors may inhibit global DR development and expansion?
  • Which new technologies and program models are enabling DR to increase its penetration globally?
  • How quickly will DR grow in various regions around the world?
Who needs this report?
  • Demand response (DR) management systems vendors
  • Curtailment service providers
  • Smart thermostat vendors
  • Large commercial and industrial customers
  • Utilities
  • Independent system operators/regional transmission organizations
  • Government energy agencies
  • Investor community

Table of Contents

1. Executive Summary

1.1  Introduction to Demand Response

1.2  Market Drivers

1.3  Market Barriers

1.4  Technology Trends

1.5  Market Forecast

2. Market Issues

2.1  Market Drivers

2.1.1     FERC Order 745

2.1.2     Carbon Regulations

2.1.2.1  U.S. EPA’s Clean Power Plan

2.1.3     International Markets Opening

2.1.3.1  Ontario

2.1.3.2  Europe

2.1.3.3  South Korea

2.2  Market Barriers

2.2.1     U.S. EPA Emergency Generator Rules

2.2.2     PJM Capacity Performance

2.3  Technology and Program Design Trends

2.3.1     Bring Your Own Device DR

2.3.2     Behavioral and Analytical Demand-Side Management

2.3.3     Integrated/Targeted DSM

3. Market Forecasts

3.1  Forecast Introduction

3.2  Assumptions Guiding this Forecast

3.2.1     A Note on Report Scope and Market Sizing

3.3  Global DR Adoption

3.4  Global DR Sites

3.5  Global DR Spending

3.5.1     DR Product and Services Spending

3.6  Global DR Revenue

3.7  Conclusions and Recommendations

4. Acronym and Abbreviation List

5. Table of Contents

6. Table of Charts and Figures

7. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

  • DR Capacity by Region, World Markets: 2016-2025
  • Share of DR Capacity by Region, World Markets: 2016
  • Share of DR Capacity by Region, World Markets: 2025
  • CAGR of DR Capacity by Region, World Markets: 2016-2025
  • C&I DR Capacity by Region, World Markets: 2016-2025
  • Residential DR Capacity by Region, World Markets: 2016-2025
  • DR Sites by Region, World Markets: 2016-2025
  • C&I DR Sites by Region, World Markets: 2016-2025
  • Residential DR Sites by Region, World Markets: 2016-2025
  • DR Spending by Region, World Markets: 2016-2025
  • C&I DR Spending by Region, World Markets: 2016-2025
  • Residential DR Spending by Region, World Markets: 2016-2025
  • DR Revenue by Region, World Markets: 2016-2025
  • C&I DR Revenue by Region, World Markets: 2016-2025
  • Residential DR Revenue by Region, World Markets: 2016-2025

List of Tables

  • DR Capacity by Region, World Markets: 2016-2025
  • C&I DR Capacity by Region, World Markets: 2016-2025
  • Residential DR Capacity by Region, World Markets: 2016-2025
  • DR Sites by Region, World Markets: 2016-2025
  • C&I DR Sites by Region, World Markets: 2016-2025
  • Residential DR Sites by Region, World Markets: 2016-2025
  • DR Spending by Region, World Markets: 2016-2025
  • C&I DR Spending by Region, World Markets: 2016-2025
  • Residential DR Spending by Region, World Markets: 2016-2025
  • DR Revenue by Region, World Markets: 2016-2025
  • C&I DR Revenue by Region, World Markets: 2016-2025
  • Residential DR Revenue by Region, World Markets: 2016-2025
  • Share of DR Capacity by Region, World Markets: 2016 and 2025
  • Growth of DR Capacity, Year-over-Year, World Markets: 2017-2025
  • CAGR of DR Capacity by Region, World Markets: 2016-2025
  • Annual New Connector Stations by Phase, United States

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