The research study covers the present scenario and growth prospects of the global DR market for 2017-2021. The market is segmented based on the product (hardware and software and services), end-user (industrial, residential, and commercial), and geography (the Americas, EMEA, and APAC).
The global DR market is likely to experience a high growth from Europe and APAC during the forecast period. The rising concern of high-cost energy and the widening gap between power supply and demand will bring a huge scope for the global DR market in Europe and APAC. However, the DR market still lies in the nascent phase in the rest of the world. The lack of basic infrastructure, unclear policy, and low awareness level among people are the key inhibiting factors for the market growth in developing countries.
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Technavio industrial automation research analysts highlight the following three factors that are contributing to the growth of the global DR market:
- Increasing gap between electricity supply and demand
- Growing demand for smart devices and analytics software
- Increased cost of electricity
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Increasing gap between electricity supply and demand
The rising trend of variable generation resources, such as solar and wind, intensifies higher levels of non-dispatchable resources to the system. With more variable generation, both transmission and distributor system operators require tools and resources to maintain reliability while addressing the short, steep ramps, and moderate load requirements. Thus, transmission and distribution systems require DR to increase the overall flexibility of the system, such as magnifying balancing areas, increasing the ramping capability of the generation fleet, leveraging dispatchable demand resources, inserting power flow controllers, and raising energy storage to maintain reliability.
Bharath Kanniappan, a lead automation research analyst at Technavio, says, “The growing urbanization and population are increasing the need for electricity worldwide. This is creating a huge mismatch between electricity supply and demand for the last two decades. Similarly, a variation in load demand to a greater extent throughout the year has become a major difficulty that further complicates the situation.”
Growing demand for smart devices and analytics software
The seamless communication between grid and electricity consumers is becoming the major driver for the global DR market. Traditionally, neither power system networks nor consumers had the advanced devices or systems to keep track of the live electricity consumption. However, the advent of new devices, such as smart meters, smart thermostats, and automatic control switch, has increased the ability of electricity networks to keep track of the real-time electricity utilization.
“The high-end software installed as part of the DR systems can interlink and network different systems and keep an overall tab on the performance and productivity of the networked system. This software can optimize the operation of several systems using environmental parameters like occupancy, temperature, and lighting, and can easily connect, regulate, and operate HVAC and lighting systems to optimize the electricity utilization,” adds Bharath.
Increased cost of electricity
The rising cost of the power is one of the major drivers for the global DR market, especially during peak times. By collaborating with the customers for curtailing load, utilities can reduce the purchase of expensive peak power on the spot markets. The utilities in the European countries pay a relatively larger price for buying energy due to the high amount of tax.
The energy suppliers in the European countries are presently investing in expensive projects to reduce the over reliance on fossil fuel sources. These initiatives further increase the energy price for both consumers and utilities. The end-users in these countries are gradually volunteering to adopt DR to compensate their high utility bill with financial incentives.
- Honeywell International
- Itron (Comverge)
- Schneider Electric
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