Europe’s demand response capacity is currently barely enough to even power a DeLorean, but over the next four years its capacity will boom to more than 12 gigawatts (GW*) of power. The same goes for countries in the Asia-Pacific region. In fact, the Global Demand Response Market is growing at CAGR of 16.6 percent from 2013-2018, in response to the global energy crisis and a pretty pressing need to alleviate stress on power grids worldwide.
*Here’s a useful article to provide some context on exactly how much a GW is.
What is Demand Response?
Anyone who has ever paid a hydro bill knows that electricity doesn’t come cheap, especially during peak hours. Demand response (DR) is a change in the electricity use of customers in response to changes in price or incentive payments designed to encourage less electricity use during peak times. It provides a way for utilities to manage system peaks by controlling customer loads, since the utility can better manage demand and supply while consumers benefit from incentives.
Full deployment of demand response has seen its fair share of troubles, since the whole system relies on smart metering and timely communication with customers. But as smart meters take off globally, demand response is expected to follow-suit.
This approach has proven to be an effective demand control solution in the US and is currently being deployed in other parts of the world, in order to alleviate pressure on stressed out power grids.
Europe, the Middle East and Africa
The capacity in the DR market in the EMEA region is expected to grow at a CAGR of 52.8 percent from now to 2018, in response to rising electricity prices in Europe. Peak demand pricing will reach even higher levels over the next few years, which has the potential to put strain on the economy and increase the risk of power shortages and blackouts. Investing in more capacity to overcome this problem will be an expensive affair, but deployment of DR is expected to be a constructive solution to curbing peak load requirements.
APAC Region
The capacity in the DR market in the APAC region was less than 1 GW in 2013, but is expected boom to more than 10 GW by 2018, growing at a CAGR of 68.9 percent.
Carbon emission issues and huge power requirements are the primary factors triggering the growth of the DR market in this region. Pilot projects to deal with the increased power demand have been initiated in countries such as South Korea, China, Japan, India, Singapore, and Malaysia.
Japan will be a hub for DR technologies over the next few years, since the country has turned its attention to energy saving solutions to deal with the post-Fukushima disaster energy crisis. Additionally, huge demand from China and India—thanks to infrastructure modernization and a growing middle class in these countries—will also spur on significant growth in DR in these regions.
