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ADR spend to climb to $185.5m by 2023

Fri, 05/02/2014 - 10:53 -- Tildy Bayar
ADR spend to climb to $185.5m by 2023

Worldwide spending on automated demand response systems will grow from $13m in 2014 to $185.5m by 2023, according to market analysis.

In a new report, Navigant Research forecasts increased automated demand response (ADR) system adoption in world regions where new market sectors such as ancillary services – for example, reserve and regulation – are opening up to demand response.  The report points to the changing resource mix in electric grids around the world – specifically the growing adoption of intermittent renewable energy sources requiring backup power – as creating increased potential for demand response to play a pivotal role.

However, barriers to ADR adoption also exist, including users’ continuing desire for control, security issues, production concerns in the case of industrial facilities and comfort concerns for commercial buildings or households.

The report also points out that, depending on the level of existing energy management systems in a facility, costs for ADR could be relatively small and involve little to no hardware installation, or they could require extensive control installations and lots of integration with existing systems, so a cost/benefit analysis is required.

Almost all current ADR activity is centred in the US, but this leadership position will erode over the next 10 years according to Navigant. Asia Pacific is predicted to overtake North America in ADR capacity and spending after 2020, while Europe’s growth will be slower than Asia Pacific’s but faster than North America’s, the report said.

“Demand response is a growing part of the resource base that electric system operators use to maintain grid reliability, and automated DR greatly extends the reach and capability of the technology,” said Brett Feldman, senior research analyst with Navigant Research. “Much of the basic technology for ADR exists today, and to a large extent, ADR adoption will depend more on market forces than on technical advances.”