Automated Demand Response ‘Will Grow to $1.7bn by 2018’

by | Jun 20, 2012

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Total spending for automated demand response is expected to reach more than $401 million globally in 2012 and grow to more than $1.7 billion by 2018, according to a report from Pike Research

Additionally, Pike Research estimates that 27,430 facilities worldwide will be enabled with ADR technology in 2012. The clean-tech research firm forecasts the total number of ADR-enabled sites will increase to 169,847 by 2018, more than six times the current number.

ADR technology uses communications infrastructure to alert the utility or grid operator about a DR program participant’s use. The utility or grid operator can then reduce or shift the customer’s energy use, making adjustments via control systems on the participant’s premises.

Pike Research says ADR is gaining attention in the market, in part because of open standards such as the OpenADR specification. But retrofitting buildings for ADR can cost a significant amount, especially if the faciltiies are not equipped with the technology required to support ADR programs.

According to the report, North America has the most ADR sites and spending (see chart). Pike Research forecasts ADR growth in spending in this region to grow at a compound annual growth rate of almost 24 percent between 2011 and 2018.

However, Pike Research expects very strong CAGRs of well over 100 percent in Asia Pacific, Latin America, and the Middle East/Africa. The report says this is primarily because these regions will not start to implement ADR until 2012 or 2013, and will then increasingly deploy ADR until 2018.

Earlier this year, Honeywell and utility SSE announced plans to install automated demand response technology in 30 commercial and industrial buildings in the Thames Valley area west of London. The utility will work with these customers to trim peak electricity use, and reduce strain on the local networks and substations, which are nearing capacity. Honeywell expects the full-scale project will allow the utility to shave about 10 MW of energy use when necessary.

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