Demand Response Providers Expect Boon from Increased Renewables Use

The need for demand response, the management of consumers' electric consumption in response to critical supply constraints, is expected to become increasingly important as the nation’s electricity grid is supplied by increasing amounts of intermittent renewable power.

Green technology firm Cleantech Group predicts that the demand response sector could grow from $1.3 billion to $8 billion over the next five years. At least three demand response aggregators—EnerNOC, CPower Inc. and Energy Curtailment Specialists Inc.—have entered the energy management market. Together the three companies boast a portfolio of 7.7 gigawatts, according to Greenwire.

Companies like EnerNOC can increase grid capacity by reducing the power use of its clients. For agreeing to reduce their power consumption when asked, clients receive a monthly capacity fee as well as a payment for the actual energy they save when called upon.

PJM Interconnection, the nation’s largest regional transmission entity, has increased its spending on demand response nine-fold in recent years: from $5 million in 2002 to more than $45 million in 2007.

Emissions reduction regulations are expected to put more pressure on utilities to pursue efficiency and find new ways to accommodate peak demand, and demand response will likely benefit from that push.

CPower’s clients include commercial, institutional and industrial properties as well as thousands of residential units. Becoming familiarized with clients’ energy networks also positions demand response experts to become an advisor to client companies, improving their efficiency.

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