Residential Demand Response

Direct Load Control and Dynamic Pricing Programs, DR Markets,
and DR Management Systems for Residential Customers: Global Market Analysis and Forecasts

Residential demand response (DR) is a relatively old 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 run residential direct load control (DLC) programs as forms of demand management for many years.

Traditional DLC programs paid customers an annual fee for agreeing to have a control device installed on their air conditioners. However, customers had no engagement with the program, and many would override the controls or quit the program if comfort was compromised. With the development of advanced metering infrastructure (AMI) and smart, two-way communicating thermostats in the last 10 years, notification, equipment, and customer limitations are being overcome. Utilities can discreetly dispatch customers according to system need and can get real-time feedback on performance and outages. Customers can control their own devices through mobile applications, making them more empowered. Navigant Research forecasts that global residential DR revenue will grow from $332.4 million in 2014 to $2.3 billion in 2023.

This Navigant Research report analyzes the global market for residential DR in five major geographic regions. The study provides an analysis of the market drivers and barriers, as well as global players and dynamics, associated with residential DR. Global market forecasts for residential DR sites, capacity, and revenue, broken out by DR program (DLC and dynamic pricing) and region, extend through 2023. The report also examines the main technologies related to residential DR and identifies the strengths and challenges of key industry players.

Key Questions Addressed:
  • What are the market drivers incentivizing residential demand response (DR) to expand in the United States and abroad?
  • What factors may inhibit the expansion of residential DR?
  • What new technologies are enabling residential DR to increase its penetration in the market?
  • Who are the major competitors in the residential DR arena?
  • How fast will residential DR grow in various regions around the world?
Who needs this report?
  • Demand response management system (DRMS) vendors
  • Curtailment service providers
  • Smart thermostat vendors
  • Smart grid analytics and communications vendors
  • Utilities
  • Regional transmission organizations/independent system operators (RTOs/ISOs)
  • Government agencies
  • Investor community

Table of Contents

1. Executive Summary

1.1  Introduction to Residential 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  Definition of Demand Response

2.1.1   Navigant Research’s Definition

2.2  Residential DR Market Drivers

2.2.1   Coal and Nuclear Plant Retirements

2.2.2   Grid Resiliency

2.2.3   Grid Modernization

2.2.4   Ancillary Services and Renewable Energy Integration

2.2.5   Dynamic Pricing

   2.2.5.1  SMUD

   2.2.5.2  BGE

   2.2.5.3  Oklahoma Gas and Electric

   2.2.5.4  Ontario, Canada

   2.2.5.5  Philadelphia Electric Company TOU Pilot Program

2.2.6   Behavioral DR

2.2.7   EVs

2.2.8   Transactive Energy and Connected Appliances

2.3  DR Market Barriers

2.3.1   Broad Market Trends

2.3.2   Winter DR

2.3.3   Solar PV Penetration

3. Global DR Market Players and Dynamics  

3.1  Introduction

3.2  North America

3.2.1   The FERC

   3.2.1.1  DR-Related FERC Orders

3.2.2   U.S. EPA

3.2.3   PJM Interconnection

   3.2.3.1  Capacity Market

   3.2.3.2  Ancillary Services Markets

   3.2.3.3  Utility Programs

3.2.4   California

3.2.5   Massachusetts

3.2.6   New York

   3.2.6.1  New York Public Service Commission

   3.2.6.2  Con Edison

3.2.7   Texas

   3.2.7.1  ERCOT DR and Dynamic Pricing Survey

   3.2.7.2  Other DR Players in Texas

3.2.8   PUCs

3.2.9   Ontario, Canada

3.3  Europe

3.3.1   Regulatory Barriers

3.3.2   Climate Change Concerns

   3.3.2.1  Intermittent Renewables

   3.3.2.2  Capacity Markets

3.3.3   European Players

   3.3.3.1  European Commission

   3.3.3.2  Smart Energy Demand Coalition

3.3.4   France

3.3.5   Germany

3.3.6   Italy

3.3.7   United Kingdom

3.4  Asia Pacific

3.4.1   Australia and New Zealand

   3.4.1.1  Ergon Energy

3.4.2   Japan

3.4.3   South Korea

4. Technology Issues

4.1  Introduction

4.2  AMI versus Broadband

4.3  OpenADR

4.3.1   OpenADR 2.0

4.4  Thermostats

4.4.1   BYOT

4.5  Window AC Units

4.6  Grid-Interactive Electric Water Heating

4.7  Demand Response Management Systems

5. Key Industry Players  

5.1  Introduction

5.2  Full-Service Residential DR Vendors

5.2.1   Established Residential DR Vendors

   5.2.1.1  Comverge

   5.2.1.2  Honeywell International

   5.2.1.3  Schneider Electric

   5.2.1.4  Siemens

5.2.2   Up-and-Coming Residential DR Players

   5.2.2.1  EcoFactor

   5.2.2.2  Energate

   5.2.2.3  EnergyHub

   5.2.2.4  Landis+Gyr

   5.2.2.5  Nest Labs

   5.2.2.6  Opower

   5.2.2.7  Silver Spring Networks

5.3  DRMS Providers

5.3.1   Leading DRMS Providers

   5.3.1.1  ABB (Ventyx)

   5.3.1.2  Alstom

   5.3.1.3  AutoGrid

5.3.2   Other DRMS Providers

   5.3.2.1  GE Energy

   5.3.2.2  Lockheed Martin

   5.3.2.3  Open Access Technology International, Inc.

5.4  Other Industry Participants

6. Market Forecasts 

6.1  Forecast Introduction

6.2  Forecast Assumptions

6.2.1   A Note on Report Scope and Market Sizing

6.3  Global Residential DR Sites

6.4  Global Residential DR Capacity

6.5  Global Residential DR Revenue

6.5.1   DR Product and Services Spending

6.6  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

  • Residential DR Sites by Region, World Markets: 2014-2023
  • Share of Residential DR Sites by Region, World Markets: 2014
  • Share of Residential DR Sites by Region, World Markets: 2023
  • CAGR of Residential DR Sites by Region, World Markets: 2014-2023
  • Residential DLC DR Sites by Region, World Markets: 2014-2023
  • Residential Dynamic Pricing DR Sites by Region, World Markets: 2014-2023
  • Residential DR Capacity by Region, World Markets: 2014-2023
  • Residential DLC DR Capacity by Region, World Markets: 2014-2023
  • Residential Dynamic Pricing DR Capacity by Region, World Markets: 2014-2023
  • Residential DR Revenue by Region, World Markets: 2014-2023
  • Residential DLC DR Revenue by Region, World Markets: 2014-2023
  • Residential Dynamic Pricing DR Revenue by Region, World Markets: 2014-2023
  • Risk/Reward Profile of Dynamic Pricing Options
  • Stages of Adoption of Transactive Operations for Industry
  • OpenADR Client/Server Model
  • OpenADR Members by Country

List of Tables

  • Residential DR Sites by Region, World Markets: 2014-2023
  • Residential DLC DR Sites by Region, World Markets: 2014-2023
  • Residential Dynamic Pricing DR Sites by Region, World Markets: 2014-2023
  • Residential DR Capacity by Region, World Markets: 2014-2023
  • Residential DLC DR Capacity by Region, World Markets: 2014-2023
  • Residential Dynamic Pricing DR Capacity by Region, World Markets: 2014-2023
  • Residential DR Revenue by Region, World Markets: 2014-2023
  • Residential DLC DR Revenue by Region, World Markets: 2014-2023
  • Residential Dynamic Pricing DR Revenue by Region, World Markets: 2014-2023
  • Share of Residential DR Sites by Region, World Markets: 2014 and 2023
  • Year-to Year Growth of Residential DR Sites, World Markets: 2015-2023
  • CAGR of Residential DR Sites by Region, World Markets: 2014-2023
  • Year-to-Year Growth of Residential DR Revenue, World Markets: 2015-2023
  • U.S. Utilities Offering DR Programs Outside of RTO/ISO Markets
  • Comverge SWOT Analysis
  • Honeywell SWOT Analysis
  • Schneider Electric SWOT Analysis
  • Siemens SWOT Analysis
  • ABB SWOT Analysis
  • Alstom SWOT Analysis
  • AutoGrid SWOT Analysis
  • Other Industry Participants

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