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Barriers Exist to Demand Response in US

April 28, 2015 By Linda Hardesty

DRCurrently, the majority of the demand response activity in the world is taking place in the United States, according to a report from Navigant Research, “Demand Response Enabling Technologies.” This leadership position will erode over the next 10 years, however, as all international regions start or expand demand response programs. The largest growth will occur in Asia Pacific. There are many distinct markets in Asia Pacific, such as Australia, New Zealand, South Korea, China and Japan, all of which have distinct drivers for growth. Europe is a more unified story of moderate, methodical advancement based on a combination of opening market opportunities and renewable resource integration. Demand response in Europe will not experience the rapid expansion that will occur in Asia Pacific, but it will have a faster growth pace than in North America as new market opportunities open and DR-friendly rules are instituted.

Drivers to demand response growth include the concepts of resiliency and microgrids, which have taken strong root along the US Atlantic Seaboard following Hurricane Sandy in 2012. Demand response will be an integral part of those developments. Also, with the proliferation of advanced meters that can record usage at small intervals, more dynamic types of pricing can be applied down to the residential level. Plug-in electric vehicles (PEVs) are also being eyed as demand response assets, and almost every auto manufacturer has developed some sort of energy use optimization pilot.

Barriers to demand response development also exist. There is a major case involving the US Supreme Court regarding the Federal Energy Regulatory Commission’s (FERC’s) jurisdiction over demand response that could drastically alter the demand response landscape in the United States. Other barriers include unwillingness to cede some control over energy usage, security concerns, production concerns in the case of an industrial facility, or comfort concerns for commercial buildings or households.

For the most part, existing technology is sufficient to accomplish demand response, but the Open Automated Demand Response (OpenADR) protocol appears poised to lead the way to an international standard for demand response communications, which would streamline program development.

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