Demand Response Programs Progress Beyond Emergencies

by | Oct 20, 2017

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2017 Utility Demand Response Market Snapshot

Demand response programs in the United States are growing more sophisticated and customer-friendly, according to the 2017 Utility Demand Response Market Snapshot from the Smart Electric Power Alliance (SEPA) and Navigant Research.

The report, which was published this week, analyzes 2016 annual data for demand response programs that was submitted by more than 100 utilities, SEPA says. DR isn’t just about load shedding or shifting any more, SEPA research analyst Brenda Chew, who co-authored the report and led the survey, said in a press release. “It’s being used to help manage the real-time impacts of the increasingly large amounts of renewable energy on the grid.”

Although demand response programs for air conditioning and water heaters have been around for decades, technology changes are propelling DR into a period of transition, the report says. One trend is the growing popularity of smart thermostats for direct install, self-install, and bring-your-own thermostat programs. “These programs increase customer choice, allow greater visibility into customer devices, and provide energy savings to both customers and utilities,” according to the report.

Traditionally, DR was used to turn a customer’s electric appliances on and off for emergency purposes, Brett Feldman, principal research analyst with Navigant Research, points out in a press release about the market snapshot.

“But technology has progressed, customers expect more choice and control, and DR programs have become more precise and customer-friendly,” he says. “This focus on customer-grid solutions — and the cross-industry partnerships we see in many DR programs — will make demand response a particularly strong and flexible vehicle for ongoing distributed energy resource integration and innovation.”

Utilities are beginning to shift from one-way to two-way communications technologies for customers that are enrolled in AC switch programs and water heater programs, the market snapshot says.

This report comes on the heels of Feldman’s analysis earlier this month that small to mid-sized businesses are significantly underrepresented in demand-side management program participation, even though they tend to make up a large percentage of a utility’s customer base. As DR programs across the country evolve to offer more customer choice and control, perhaps more businesses will participate.

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