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Global Demand Response Trends

  • ID: 3528165
  • Report
  • December 2015
  • Region: Global
  • 50 Pages
  • Frost & Sullivan
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Expansion of Distributed Generation Intensified by the Need for Demand Management
Demand response (DR) models are enabling real-time analysis of customer demand trends and allowing the generation, transmission and distribution infrastructure to react accordingly. Growth in this market means utilities will increasingly invest in innovative technologies and predictive tools to reduce power generation costs as well as grid failures and outages. New communication technologies and supportive government regulations are imperative for its integration into the future energy system. This study provides a detailed evaluation of the growth opportunities around the world for DR solutions.

Key Findings

- Energy efficiency is the key demand driver for implementing Demand Response (DR) programs. Grid instability and power outages due to capacity overload and stand-by demand for intermittent renewable power source drive the need for a resilient smart grid infrastructure. A Demand Response program enhances the ability of the grids to meet contingencies while providing customers the ability to manage their electricity spending.

- As a result of global warming and climatic change, government agenda across the world have been stressing the need to reduce emissions. The most important methods of carbon reduction is to increase the amount of electricity produced by highly efficient distributed and renewable generation technologies and well as implementing energy sufficiency policies.

- Demand Response programs have evolved into a complete demand-side managementof energy and power. Extreme weather variations, declining energy reserves and increase in investment towards innovative distributed generation technologies have made it imperative for utilities to seek newer models supporting energy efficiency and energy management initiatives.

- Dynamic pricing and tariff structures are some of the more common tools used to implement demand response programs. Smart meters and thermostats are increasingly being implemented in Europe and Asia.

- The United Kingdom, China, Japan and South Korea are emerging markets where the benefits of demand response will help achieve the country’s emission targets while providing cleaner and efficient energy during peak times.

Key Questions Answered:

- What is the definition of Demand Response?

- Is the existing energy value chain structured correctly to meet Demand Response needs?

- Do current technologies meet Demand Response needs or is additional development needed?

- What are the key drivers and restraints affecting Demand Response?

- How can Demand Response be beneficial to a distributed energy system?

- Which are the key geographical hotspots driving Demand Response opportunities?
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1. Executive Summary
  • CEO 360 Degree Perspective
  • Three Big Predictions
  • Key Findings
  • Summary of Major Trends
  • Current Questions in the Market
  • Associated Research and Multimedia
2. Demand Response Analysis
  • Distributed Generation Technology Leads to DR Opportunities
  • Demand Response Requires Efficient Energy Management
  • Demand-side Management Needs a Flexible Value Chain
  • A Resilient Grid Infrastructure Lies at the Core of a DR Model
  • Benefits of DR Programs Include Micro and Macro Impacts
  • DR System Need to be Driven by Automation
3. Drivers and Restraints
  • Market Drivers
  • Drivers Explained
  • Market Restraints
  • Restraints Explained
4. Business Model and Enablers
  • Direct-utility Partnerships or Tie-ups with Channel Partners
  • Key Enablers Include Mechanisms, Applications and Tactics
  • Mechanism - Pricing Incentives
  • Tools and Applications - Smart Meters and Metering
5. Global Hotspots
  • North America Continues to be the Hub
  • Market Valuation of Demand Response
  • The United States
  • The United Kingdom
  • France
  • Finland
  • South Korea
  • Japan
6. Case Studies
  • Case Study (North America) - Enernoc Demand Response Program in Southern California Edison
  • Case Study (Europe) - National Grid Short-Term Operating Reserves (STOR) Program
  • Case Study (Asia) - Enernoc and Korea Power Exchange Demand Response Program
7. Conclusions
  • Regulatory Action and Smart Grid Investments are Crucial
  • Legal Disclaimer
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Summary of Major Trends

- Global Demand Response Potential will continue to be concentrated in North America:

The United States leads in terms of demand response development. A total of GW/year of capacity will be reduced with the help of efficient DR programs in the North American market. Solar, hydro, and biomass are key renewable power sources along with distributed generation technologies. Utilities are keen to transforms their business models to support variable pricing and load curtailment programs to support energy demand management.

- Residential Consumers will Drive the Application of Demand Response:

The residential sector has the largest potential for demand flexibility and variability across the globe. Almost X% of the energy required for residential consumption can be shifted to off-peak times. Attractive benefits include incentives to energy providers to meet variability in demand. It is imperative to note that the role of consumers in the value chain is set to recreate itself as an equal contributor. However, the lack of awareness that impedes pace of deployment is expected to change over time as the need for sustainable power becomes more acute.

- The Role of a Smart Grid Infrastructure will be Critical in the Implementation of Demand Response Programs:

Many governments are considering smart grids and the broader low-carbon technology industry as critical to the evolution of their manufacturing and knowledge economy. Installation of smart meters/smart appliances will enable the utilities to understand demand patterns of its consumers and help support effective load management. Data analytics and predictive analysis are important tools to understand and interpret demand- and supply-side integration. Smart grids are expected to bring about global savings of more than 1 Billion tons CO2 equivalent, by 2020.

- A Demand Response Program will Fail to sustain without Regulatory Support and Incentives:

Regional regulations and policies will have to be redefined to facilitate coordination and integration efforts between the utilities and consumers. With governments across the world encouraging the use of renewable energy (RE) resources, demand response management is likely to play a crucial role in integrating renewable sources into the grid during peak-demand situations.
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