Residential Demand Response
Direct Load Control, Time-of-Use, Critical Peak Pricing, and Peak-Time Rebate Programs for Residential Customers: Global Market Analysis and Forecasts
Demand response (DR) is increasingly becoming an important part of the resource mix for utilities and grid operators, especially in managing peak electricity demand. While both the commercial and industrial (C&I) and residential sectors contribute to peak demand, households are responsible for a significant amount of such demand. As a result, DR programs that utilities offer are essential tools for managing demand and are a key component of governmental energy policy.
Taking a clue from their U.S. counterparts, utilities in other countries are gradually realizing the potential benefits to themselves as well as their customers by introducing DR programs to their residential customers. Many have already developed such programs, especially in Europe, while others are initiating pilots to find out for themselves if they can achieve their load reduction objectives as well as a return on their investments from DR programs. In particular, they are anxious to determine the effectiveness of the two major types of programs: conventional direct load control (DLC) and price-based programs. Despite their strong value proposition, however, residential price-based DR programs are still in their infancy. Pike Research estimates that there are nearly 11 million households globally that are currently enrolled in DR programs. With a compound annual growth rate (CAGR) of 11.6%, that number of households is forecast to more than double, to over 23.5 million, by 2018.