SEPA Snapshot: Demand Response Market Expected to Soar

Customers are increasingly enrolling in—even demanding—demand flexibility programs, and their hunger for options to reduce or shift their electricity usage will only increase in the coming decade, according to SEPA’s 2019 Utility Demand Response Market Snapshot. So what can this report tell us about the market? Let’s look at what SEPA’s report on the demand response market says about the state of demand flexibility initiatives.

Load Flexibility Can Lead to Savings

The first key demand response market trend listed in the SEPA market snapshot is based on a report from The Brattle Group, which estimates that 200 GW of economically feasible load potential across the country could come from demand response by 2030. That compares to the 2018 DR-enrolled capacity of 20.8 GW, almost a 10-fold increase. With an estimated 20% of peak load levels by 2030, demand response and load flexibility could soon save the U.S. energy sector more than $15 billion each year. Dr. Ahmad Faruqui, principal at The Brattle Group and one of The Brattle Group report’s lead authors, delivered the keynote address at Virtual Peaker’s Innovation Forum in October, to share his research into the financial potential that demand flexibility can provide enterprising utilities.

The Demand Response Market & Energy Security

Another SEPA insight is that technology’s role in demand flexibility programs will continue to grow, as innovation—coupled with regulatory and market trends, plus the integration of carbon-reduction programs—is predicted to lead to increased DR adoption. Especially since the Inflation Reduction Act was passed, utilities are poised to develop their demand flexibility and distributed energy resource (DER) initiatives to save money on energy costs, while enhancing grid security. 

More Device Options is a Good Thing

SEPA also highlights how utilities are leveraging multiple technology types, integrating options like thermostats and battery storage to provide larger savings. Especially when combined with robust app communication software like our Gravity Connect API, utilities can connect with device partners faster than ever. 

Demand Response Market Conclusion

At Virtual Peaker, these market trends are nothing new.  We encourage you to watch a video of one of our clients in Glasgow, Kentucky demonstrating that The Utility of the Future is in Rural Kentucky. We encourage you to download the related case study. As the energy storage market expands, utilities are realizing the value of aggregated energy storage as grid assets. With its Resilient Home program, Virtual Peaker client Green Mountain Power (GMP) is shifting away from meters so customers can use batteries to measure energy usage. GMP currently offers the largest residential demand management program in the country.

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About The Author
Jeff Quigley blog author

Jeff is the VP of Sales for Virtual Peaker. He has spent his entire career in energy and data analytics where he has led teams working with utilities, government agencies, oil and gas companies, and financial institutions to help drive growth strategy and manage energy transition. He has worked with a team of analysts in developing an integrated resource plan (IRP) for a major U.S. vertically integrated utility, with a focus on load forecasting, locational marginal pricing (LMP) prediction, and long-term grid reliability. He has also managed the development of marketing and growth strategy for one of the four largest global oil and gas firms with a focus on the long-term viability of the Asian market-entry strategy.

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