According to a new market report published by Transparency Market Research "Smart Demand Response Market By End User - Residential, Commercial, and Industrial) - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014 - 2025", the value of the Global Smart Demand Response Market will increase from US$5,041.4 million in 2013 to US$51,478.9 million by 2025, an average annual growth of 21.6%.
Drivers of smart demand response market growth
A growing demand for power is driving the need for demand response programs. The roll-out of smart grid technologies, including smart meters and communication systems, as well as the growing demand in power (supplemented by capacity constraints) are likely to boost growth in the global smart demand response market. As technological advancements and developments by leading market players come to light, the market will develop and grow further.
Furthermore, policies that encourage demand response programs are expected to accelerate the market's growth. Attractive financial incentives for the commercial and industrial consumer segment will also encourage growth in the market.
Unfortunately, as with most markets, there are challenges that will dampen growth. These include a limited customer awareness of demand response programs and their benefits, as well as the high cost of technology and equipment for implementing demand response programs.
The global demand response market
The US is predicted to dominate the global smart demand response capacity market in the near future, taking over 80% of the global market share. Utilities in the US take demand response very seriously since the regulator holds them accountable if demand response targets are not met. Penalties vary from state to state for utilities who fail to meet their set targets. Some may face a financial penalty if they fail to achieve at least 70% of the target. [Engerati-Demand Response-A More Operational Resource for Utilities.]
The European and Asia Pacific markets are also seeing significant growth.
Ongoing development in the utility industry is estimated to drive growth in the US smart demand response market and significant smart demand response expenditure is estimated to accelerate growth in Europe's smart demand response market. In Asia Pacific, it will be high energy consumption and developments in the manufacturing sector that will drive their market growth.
Industrial end user segment is estimated to dominate the global smart demand response market over the coming years as the sector looks for a cost-effective and environmentally sensible way to meet the needs of the electricity system.
The residential end user segment is anticipated to grow at the highest rate in the future as utilities control residential loads with smart grid technologies.
The benefits of demand response programmes recognised
Electricity markets are recognizing the need for demand response programs to manage scheduled or emergency downtime for power plants. Furthermore, demand response in the US and Asia Pacific is also recognized as a mechanism to mitigate higher wholesale prices and lower overall grid costs. This will drive growth in the smart demand response capacity market. [Engerati-Understanding the True Value of Demand Response] and Engerati-Demand Response and its Potential Value.]
Key players in the market include Honeywell International, EnerNOC, Eaton Corporation, Landis+Gyr, Itron, Schneider Electric, General Electric, and Siemens AG.Other major market players analyzed in this report includes: Johnson Controls, ABB, Comverge, Inc., and Opower.