The rising consumption of electricity and simultaneous increase in energy prices has raised the need for maintaining energy efficiency. Demand Response Management System (DRMS) is one of the crucial peak load management tools with considerable benefits in reducing the imbalance between energy supply and demand. Demand Response (DR) aims at encouraging consumer participation in maintaining energy efficiency by modifying their electricity usage pattern, especially during peak consumption hours, thereby improving grid functionality and reliability. DR combines both price-based and incentive-based options to motivate customers to reduce their energy usage during peak hours. The DRMS software generally enables utilities to offer highly customized DR programs for its customers and to review real-time and historical outcome of DR programs to assess their effectiveness.
The DRMS market is expected to grow owing to growing smart grid roll-outs, energy price volatility, and switching rates of customers. With the growth of smart grids, the application of Advanced Metering Infrastructure (AMI) smart meters has increased substantially which provides consumer data such as usage patterns to the utilities on real-time basis. This also helps the utilities provide feedback to consumers and accordingly conduct programs on energy efficiency and DR. However, due to lack of regulations, particularly in Europe, the penetration of DR solutions and services is low.
According to MarketsandMarkets analysis, commercial DRMS solution holds the largest share of the DRMS solutions market. The peak electricity demand is the highest in commercial buildings especially in summer. Utilities therefore have to manage using electric generators which causes wastage of energy supply and also causes pollution. Therefore, automated DR is applied which is connected to the internet and provides management of demand and pricing during peak requirement using control strategies. Utilities/aggregators send Internet-based electricity pricing and DR signals to initiate preprogrammed control strategies. Growing building automation and integration of Internet of Things (IoT) will drive the adoption of DR solutions in commercial buildings.
Among the services, curtailment services are expected to lead the market during the forecast period. Utilities are fairly dependent on third party aggregators or Curtailment Service Providers (CSPs) for successful deployment of DR programs wherein aggregators/CSPs are responsible for marketing the DR program, identifying curtailable load, enrolling customers, managing DR events, and calculating payments or penalties for the customers. The increasing demand for energy efficiency and economic benefits of DR is expected to drive the market growth.
The manufacturing vertical accounted for the largest market share in the DRMS market during the period 2015-2020. Many manufacturing facilities are ideal for participating in DR programs as they can have flexibility in their operations and move their processes during off-peak times. Most large manufacturing facilities also have onsite backup generation and can shift loads on these alternate generation resources during a DR event. Building Automation System (BAS) installed in large manufacturing plants can also be interfaced with DRMS to curtail certain predetermined loads. The integration of IoT devices with the controllers in manufacturing facilities has increased the effectiveness and therefore is expected to fuel the market growth further.
The growing integration of connected devices across energy and the widespread concern over availability of fossil fuels are expected to shape the future of the DRMS market. The growth potential of the DRMS market is expected to remain high in the future and the market is expected to provide huge growth opportunities to the solutions and services providers. The integration of Information and Communications Technology (ICT) in energy and environment protection has also opened the door for Information Technology (IT) giants to diversify and provide IT-based energy efficiency solutions which has also increased the competition in the market. The cost saving benefits of DR solutions is also driving industrial, commercial, and residential customers to increase their investments in DRMS, owing to which the growth in the DRMS market is expected to remain high during the forecast period.
