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Demand response sites to hit one million by 2023: Navigant

Iain Morris
November 4, 2014

The number of commercial and industrial demand response sites in use is expected to exceed one million by 2023, according to a new study from Navigant Research.

Although just 92,000 demand response sites are expected to be in use this year, the number will grow dramatically as the market matures and with the changing resource mix in electric grids globally, according to Navigant.

In some electricity markets, demand response is now treated as a resource equivalent to generation, says the market-research company, and demand response will play an even more important role in balancing loads and ensuring there is a reliable supply of electricity in future – particularly during peak demand periods.

“Although the uncertainty surrounding the pending federal court case regarding the Federal Energy Regulatory Commission’s rules on demand response compensation has cast a cloud over the sector, there are plenty of other drivers that can lead to continued expansion in the future,” says Brett Feldman, senior research analyst with Navigant Research.

“Currently, almost all of the commercial and industrial demand response activity is taking place in the United States, but this leadership position is expected to erode over the next ten years, as all world regions move from pilot programs to building out full-scale markets,” he added.

With demand response acquiring a more prominent role, regulators and other market players are calling for tighter requirements to ensure that operations are reliable.

Changes that try to standardize rules between demand response and generation could place more requirements on demand response, according to Navigant, and as the technology is relied on more heavily it will probably fall under greater regulatory scrutiny.
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