While the energy industry seems focused on energy storage as a critical solution to many of the challenges of integrating renewables on the grid, a new report from the Smart Electric Power Alliance (SEPA) documents the growth of demand response (DR) as an increasingly valuable and flexible resource.

Based on data gathered directly from 155 utilities across the country, SEPA's 2018 Utility Demand Response Market Snapshot finds that, in 2017, an increasingly broad range of DR programs dispatched 10.7 gigawatts (GW) of energy savings to the grid. Total enrolled capacity -- that is, how much saved power was potentially available -- was 18.3 GW.

Produced in partnership with Navigant and the Peak Load Management Alliance (PLMA), the Snapshot is a unique industry report combining detailed data analysis and broad market insights.

"We are in a very exciting time for demand response," said Brenda Chew, SEPA Research Analyst and lead author on the report. "Technology, customer interest and new business and regulatory models are driving enormous changes as DR is integrated with other distributed energy resources, making it increasingly dispatchable and providing benefits for customers and the grid."

Key takeaways from the report include:

• The C&I edge: Commercial and industrial (C&I) customers provided more than half of enrolled DR capacity in 2017 -- about 12 GW.  On the residential side, traditional air conditioning switch programs remain the most common form of DR, with 3.7 GW of enrolled capacity,  

• Solar sponge: DR is helping utilities and grid operators absorb excess solar generation and adjust for changing seasonal loads through reverse DR and load shifting.

• Non-wire alternatives: Utilities are also looking at locational DR and pairing DR with other distributed energy resources. A number of non-wire alternatives projects leverage DR to offset the growth of peak loads and defer investments in distribution systems.

• Peak load standards: Going forward, the DR market has various opportunities for expansion, including continuing participation in wholesale power markets, and the peak load standards proposed in a handful of states, such as Arizona and Massachusetts.

• Price signals: The introduction of innovative time-of-use rates, often combined with DR programs, is widening among residential and small to medium business customers, allowing for a more dynamic approach to management of load curves.

"DR is not just an emergency resource anymore, but can be used for purposes like renewables integration, customer engagement and offsetting constraints in natural gas supply," said Brett Feldman, Associate Director at Navigant. "An increase in utility response to this year's survey provides a more robust picture of the demand response market and the trends we have seen in the industry. New technologies, program designs and use cases will expand DR for both residential and C&I customers. "

"PLMA is proud to collaborate on this year's report, which offers a concise glimpse of the evolving demand response industry. Together with SEPA and Navigant, we used our peer-to-peer network of practitioners to help increase the survey responses by over 50 percent, to 155 utilities, and to enhance the peer review editorial process," said Michael Brown, PLMA Chair and Manager of Demand Response and Distributed Energy Resources at Berkshire Hathaway NV Energy.

SEPA | www.sepapower.org

Navigant | navigant.com

PLMA | www.peakload.org