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The total worldwide capacity of demand response programs is expected to grow from 30.8 GW in 2014 to more than 196.6 GW by 2023, according to a recent report from Navigant Research.
Efforts to limit power generation by utilities and reduce peak loads on the grid, along with the changing resource mix in electric grids globally, are creating new demand for demand response (demand response) programs. While the United States is leading the way in the demand response market, utilities worldwide are finding new ways to incentivize more active customer participation in demand response programs.
“Technology advances in metering, controls, and end-use devices are making it easier for customers to participate in demand response programs and to manage their energy usage,” says Brett Feldman, senior research analyst with Navigant Research. “At the same time, the retirement of large numbers of coal and nuclear plants, and the expansion of large-scale intermittent renewable resources like wind and solar power to fill this gap, are creating more need for backup solutions when the wind is not blowing and the sun is not shining. Demand response fills that need in an efficient and cost-effective way.”
As demand response programs expand, though, the challenges are likely to grow as well. Market rule changes that attempt to standardize rules between demand response and generation may put more requirements and risk on demand response, according to the report.
Also, as demand response becomes a greater portion of the resource mix, it is likely to be relied upon more heavily. Thus, customer fatigue due to more demand response events must be guarded against in order to maintain reliability and prevent customer attrition.