SEPA and Navigant release 2017 Utility Demand Response Market Snapshot

DR technologies hold key to integrating more distributed energy resources on the grid

WASHINGTON, D.C. -- The evolution of demand response (DR) from traditional air conditioning cycling programs toward more sophisticated initiatives for renewables integration and demand management is one of the most dynamic aspects of the energy sector transition now underway in the United States. Examples abound -- from smart thermostat programs in Oklahoma to managed electric vehicle charging in California.

The Smart Electric Power Alliance (SEPA) has captured the breadth and scope of change in DR programs and policies across the country in its new report, the 2017 Utility Demand Response Market Snapshot, written in partnership with Navigant Research. Joining SEPA's 2017 Utility Solar and Energy Storage Market Snapshots, the report analyzes 2016 annual data on demand response programs, submitted by more than 100 utilities. It also provides updates on DR participation in wholesale markets, and outlines key and emerging market trends.
"Utilities often define and measure demand response differently, which made aggregating the data we received for this first Demand Response Market Snapshot particularly challenging," said Brenda Chew, SEPA Research Analyst, who led the survey and co-authored the report. "Demand response -- broadly defined as change in customers' normal consumption patterns, triggered by price or market signals -- isn't only about load shedding or shifting anymore. It's being used to help manage the real-time impacts of the increasingly large amounts of renewable energy on the grid."
Other report takeaways:
• The current market: Utilities reported a total enrolled DR capacity of 13,629 megawatts (MW) and a total dispatched capacity of 10,696 MW (78 percent of enrolled capacity). According to Navigant, this dispatched capacity is about the equivalent of 20 500-MW peaker plants.
• Traditional DR: While air conditioning cycling programs have the most customers, more than 2.6 million, water heater programs provide more flexibility. Utilities call demand response events an average of 36 times per year for water heaters, versus eight for air conditioning.
• The DR-DER connection: Beyond traditional programs, DR is also converging with distributed energy resources (DERs) in general. Almost 30 percent of utilities are using DR to help integrate high penetrations of DERs on their systems, and 70 percent are planning or considering such applications.
• Customer engagement: Utilities increasingly use digital communication and social media to alert customers of demand response events; 40 percent of respondents use email, 27 percent use text messages and 12 percent, other social media.
"DR was traditionally used for emergency purposes -- to turn customer's electric appliances on and off," said Brett Feldman, Principal Research Analyst with Navigant Research. "But technology has progressed, customers expect more choice and control, and DR programs have become more precise and customer-friendly, all of which benefits utility grid operators and end-use customers. This focus on customer-grid solutions - and the cross-industry partnerships we see in many DR programs -- will make demand response a particularly strong and flexible vehicle for ongoing DER integration and innovation."
The 2017 Utility Demand Response Market Snapshot is available for download here.
Media contact: K Kaufmann, kkaufmann@sepapower.org or 202.379.1637.

About SEPA
The Smart Electric Power Alliance (SEPA) is an educational nonprofit working to facilitate the utility industry's transition to a clean energy future through education, research, standards and collaboration. SEPA offers a range of research initiatives and resources, as well as conferences, educational events and professional networking opportunities. SEPA is founder and co-sponsor of Solar Power International and winner of the Keystone Policy Center's 2016 Leadership in Energy Award. For more information, visit www.sepapower.org.
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About Navigant
Navigant Consulting, Inc. (NYSE: NCI) is a specialized, global professional services firm that helps clients take control of their future. Navigant's professionals apply deep industry knowledge, substantive technical expertise, and an enterprising approach to help clients build, manage, and/or protect their business interests. With a focus on markets and clients facing transformational change and significant regulatory or legal pressures, the firm primarily serves clients in the healthcare, energy, and financial services industries. Across a range of advisory, consulting, outsourcing, and technology/analytics services, Navigant's practitioners bring sharp insight that pinpoints opportunities and delivers powerful results. More information about Navigant can be found at navigant.com.

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