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Demand Response Management System Market Trends

ID: MRFR//5231-HCR | 100 Pages | Author: Priya Nagrale| July 2024

Demand Response Management System Market Overview

The demand response management system market in the global market is expected to grow at a high CAGR of 6.86% from 2024-2032, and is expected to reach a value of USD 97.49 billion during the end of the forecasted. The global market was valued at a sum of USD 53.66 billion in 2024.

Demand Response Management System (DRMS) as a prominent aspect of the market can be understood as one of the crucial peak load management tools with considerable benefits in reducing the imbalance between energy supply and demand. Demand Response (DR) and Energy Efficiency (EE) collectively in the global market help in Demand-Side Management (DSM) of energy that encourages consumers to modify their levels and patterns of electricity consumption, along with other advantages like improved grid reliability. DR and EE programs prevailing at the right time can defer the need to build highly cost-intensive power plants for electricity generation that are also detrimental to the environment.

Demand Response Management System Industry News

In March 2024, a pioneer in AI-enabled electricity demand management solutions, DemandQ, introduced the Real-time Demand (RTD) Hub. Suppliers, demand response aggregators, ISOs and utilities may now autonomously perform demand response and economic dispatch programs on a large scale but also maintain preset comfort levels.

Catalyst Power Holdings LLC ("Catalyst Power") has introduced demand response programs for New York companies since January 2024 that are integrated suppliers of cleaner energy solutions in the commercial and industrial sectors.

In February 2023, Tata Power launched an AI-based smart energy management system with AutoGrid in order to encourage behavioral demand response among residential as well as commercial and industrial users in Mumbai. This program aims to address high energy demands while aiding India’s shift to renewable energy and Net Zero Goals. There is also a target of including fifty-five thousand home customers along with six thousand major commercial/industrial clients.

CPower acquired the U.S. demand response division of Centrica in July 2022. Centrica is involved in integrated energy services business specializing in customer load management activities for commercial and industrial customers who are located within ISO-NE, NYISO, PJM and ERCOT territories, respectively. By purchasing this entity CPower seeks to leverage customer-powered distributed energy resources so it becomes America's topmost provider for grid flexibility and reliability.

Across the nation, during June 2022, CPower initiated four programs that were purposely meant to cater for any increase or decrease in power supply during summer. CPower already manages over 5.3 GW of distributed resource capacity across America. It connects assets from nearly 2k customers located at over twelve k places, hence forming virtual power plants that meet the real-time supply requirement needs of the grid itself.

In May 2022, Virtual Peaker, together with FortisBC, made public its inaugural pilot program on demand response, which had been implemented in Canada before then. For example, using Virtual Peaker’s distributed energy resource management system (DERMS), utilities such as FortisBC can adequately handle their distributed energy resources, which include solar on rooftops, residential battery storage systems and electric vehicles. Utilities can tailor and expand their operations by implementing demand response software to accommodate the growing prevalence of renewable energy sources.

These included TCS Clever Energy, Intelligent Power Plant and TCS Envirozone, which were unveiled by Tata Consultancy Services (TCS) in February 2022 for its sustainability offering set, enabling it to know how much of the power is wasted. Demand response, among others, is one of the key features provided by TCS Clever Energy.

Demand Response Management System Market Dynamics

  • Drivers

The increasing adoption of Internet of Things (IoT) based asset management and the various other advanced technologies available led to the tremendous growth of the demand response management system market in the global market. Not only this, the market helps in providing a cost-effective solution as it helps in declining the cost of the internet of things (IoT) components that drive the growth of the demand response management system market in the global market.

  • Opportunities

The integration of the Internet of Things (IoT) is an emerging market concept and ots integration with other prominent aspects of the market like the Information and Communications Technology (ICT) into energy has led to tremendous growth in automation along with real-time processing of data. The electricity consumption patterns of the global users are also analyzed by the service providers, which helps in increasing energy efficiency through the cumulative participation of users and service providers. Utilities, therefore, help to organize Demand Response Management System (DRMS) programs and motivate the users to change their usage patterns during peak consumption hours to balance energy supply and demand and grid reliability that adds to the benefits.

  • Restraints

Many factors lead to the growth of the demand response management system market in the global market but the traditional organizational culture is the major factor that hinders the growth of the market in the global market as people always resist change for the adoption of new technology. Also, a demand response management system is an expensive solution that also acts as a restraining factor in the overall growth of the global market.

  • Value Chain Analysis

The advanced technology used in the management of the assets is a boon for the market players as with the demand response management system solution tracking and detecting frauds can easily be observed and quick action is taken at earlier stages to prevent a huge loss. Its presence makes the life of employees simpler and more comfortable as compared to traditional operating assets.

Demand Response Management System Market Segmentation

The demand response management system market in the global market is divided based on the following to cater to the rising demands and add innovation as demanded by the target audience during the period that ends in 2030:

Market on the basis of solutions:

  • Commercial DRMS

  • Industrial DRMS

  • Residential DRMS

Market on the basis of services:

  • Curtailment Services

  • System Integration & Consulting Services

  • Managed Services

  • Support & Maintenance

Market on the basis of verticals:

  • Manufacturing

  • Office & Commercial Buildings

  • Municipal, University, School, & Hospital Systems (MUSH)

  • Energy & Power

  • Agriculture

Market on the basis of regions:

  • North America

  • Europe

  • Middle-East and Africa

  • Asia-Pacific

  • Latin America

Regional Analysis

Owing to an increase in the adoption of advanced technology and advancement in proper internet infrastructure, North America holds the largest share in the demand response management system market in the global market and hence dominates the market. It has a high presence of start-ups in countries like the U.S. and Canada that provides strong local solutions.

Competitive Landscape

The most prominent major market players in the demand response management system market in the global market are as follows:

These prominent market players use various strategies to attract potential customers to increase their customer base by providing customized services and products with the judicial use of the resources they possess.

Recent Developments

  • The concept of demand response had emerged from the traditional practice of load shedding, which was a common practice during the 1970s, where utilities and service providers were made to cut the power supply of some regions during peak demand. With the emergence of traditional rebate-based DSM programs, the analysis of the functions carried out by the load requirements in different conditions began and the determination of load reduction limits came into existence. The crisp amalgamation of innovation had led to the further evolution of DR systems embedded with features such as dynamic pricing, meter data management, analytics, and load management. With a substantial increase in the integration of Information and Communications Technology (ICT) and Internet of Things (IoT) into energy, the application of AMI meters and real-time information monitoring have led to the evolution of smart DRMS solutions.

  • Growing roll-outs of smart grids, as a prominent part of the market, has increased the application of AMI meters, enhanced customer energy management systems, automation in the transmission, and distribution (T&D) system, and integration of renewable energy.

  • AMI meters render help in providing direct load control capabilities to the utilities as DR units can communicate directly to the AMI meter which controls residential appliances and thermostats for load reduction. Therefore, the roll-out of the smart grid is emerging as the primary driver for the Demand Response Management System market. Other driving forces for the market during the period include energy price volatility and customer switching.

  • There has been a prominent emergence of automated DR has also been contributing to the growth of the Demand Response Management System market. The cost benefits offered by a Software-as-a-Service (SaaS) and cloud-based deployment of DRMS solutions provide a wholesome opportunity of growth in the market.

  • DR technology is prevailing globally and has been around for a while now but except for the U.S., the global adoption rate of DR programs is relatively slow. However, there has been an absence of a single market model and the lack of regulatory mandates in the European region has been the major factor for the slow growth of the DR market in this region. Many regional areas and participating countries in the APAC region have a strong business case for implementing DR resources and the market in this region is expected to experience significant growth opportunities.

Report Overview

This global demand response management system market research report consists of the following elements:

  • Market Overview

  • COVID 19 Analysis

  • Market Dynamics

  • Value Chain Analysis

  • Market Segmentation

  • Regional Analysis

  • Competitive Landscape

  • Recent Developments

This global demand response management system research report also contains various factors that drive the growth of the demand response management system market in the global market along with various growth opportunities available in the market and the factors that restrain the growth of the market.

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