The primary goal of Demand Response (DR) is to reduce electricity consumption during periods of peak demand. An innovative combination of technology and business relationships, DR holds the promise of significant economic, environmental, and social benefits. Most notably, it helps utilities avoid the high capital costs of constructing peaking power plants that are only used a few days a year. Instead, the utility can implement DR networks at a fraction of the cost.
The DR market is currently nascent and fragmented. Pike Research anticipates that as the DR market matures, major Energy Service Companies (ESCOs) and IT players will invest in the space, boosting revenues and making DR products and services more sophisticated and attractive to utilities and end-users. After this period of consolidation and evolution, Pike Research expects that DR will become less of a discrete market and more of an application within a greater energy efficiency suite. Pike Research forecasts that, in the midst of these changes, DR revenues will grow at a 17% compound annual growth rate (CAGR) from 2010 to 2020, resulting in an annual market of more than $8 billion by 2020.
This Pike Research report examines the market for demand response products and services in the commercial, industrial, and residential sectors. The study analyzes market issues and demand drivers, including the effects of demand response programs, legislative and regulatory issues, customer incentives, and dynamic pricing structures. Additionally, the report includes three different forecast scenarios that quantify the demand response market opportunity through 2020.