Demand Response Management Systems (DRMS) Market Report

Demand Response Management Systems (DRMS) Market Analysis By Technology (Conventional, Automated), By Component (Hardware, Software), By Application (Residential, Industrial, Commercial), By Region & Segment Forecasts, 2014 - 2025

Published: April 2017  |  155 Pages  |  Format: PDF  |  Report ID: GVR-1-68038-789-6

Industry Insights

The global Demand Response Management Systems (DRMS) market size was estimated at USD 6.84 billion in 2015. Factors such as the integration of Distributed Energy Resources (DER), rising adoption of smart meters in the residential segment, integration of Electric Vehicles (EVs) with smart grids, and government regulations encouraging the adoption of Demand Response (DR) have boosted the technology growth.

U.S. DRMS Market By Application, 2014 - 2025 (USD Billion)

U.S. DRMS Market

The increasing adoption of Advanced Metering Infrastructure (AMI) by utilities and government agencies is the most recent trend driving the DRMS growth. AMI is an integrated network at the users’ end, such as smart meters, load control switches, and home area networks, that are connected to the meter data management software and the smart grids, allowing real-time communication between the customers and the utility for implementing DR programs.

Customers participating in DR programs are required to make initial investments for installing the DR systems. However, the high cost incurred before attaining benefits may demotivate the customers to adopt the technology. Lack of consumer awareness about DR programs and their benefits is another challenge which may pose a barrier to the adoption of DRMS.

The Federal Energy Regulatory Commission (FERC), U.S., has supported DRMS initiatives and publishes a yearly report to assess the DR programs, their rate of adoption, and the potential of DR as a reliable resource. Regulatory authorities in most countries are encouraging the adoption of DR and conducting pilot projects to estimate its benefits. The market for the technology is expected to grow at a robust rate over the forecast period.

Technology Insights

Automated Demand Response (ADR) accounted for close to 25% of the total revenue share in 2015 and is expected to witness substantial growth over the forecast period. This can chiefly be attributed to the growing consumer awareness about the DR programs and the rising number of utilities opting for ADR programs.

The market for ADR is expected to grow rapidly owing to innovations such as smart thermostats, smart meters, and data management software. However, the conventional DR is also anticipated to experience a modest growth. This may be attributed to the steady adoption of the technology across all regions.

Component Insights

The hardware solutions accounted for a larger revenue share in 2015 as compared to the software segment. With power grids focused on transitioning to the smart grid system in future, ADR, which is integrated into smart grids, is revolutionizing the way energy is conserved. More government regulations are favoring DRMS, which is anticipated to increase the sales for hardware such as smart meters, load control switches, and other devices installed at the utility and consumer’s end.

The software solution segment is anticipated to grow at a higher rate over the forecast period, which can be attributed to its growing requirement as both the hardware and software component installed together form an integrated demand response solution. However, by 2025, the hardware segment is projected to account for a revenue share of around 65%.

DRMS By Component, 2015 (USD Billion)

DRMS

Regional Insights

In 2015, the North American region accounted for the highest revenue share of the global DR market. The program is being widely adopted by state utilities and other service providers in the U.S.

In the U.S. and Canada, buildings are anticipated to possess an immense potential resource for demand response implementation, but at the same time, they also require programs that meet customer requirements. Scaling up both price-based and incentive-based programs is expected to enable the demand response to avoid costs, increase reliability, and reduce environmental impact. Technology is expected to be a key factor in the demand response participation in commercial buildings. It is expected to provide quick & automated load shed, instantaneous information & communication, and cost-effective demand response opportunities. Communication systems offer a direct link between the energy consuming equipment and the grid. Smart meters are expected to monitor and measure the energy used.

The Middle Eastern region is expected to grow the fastest over the forecast period. The Asia Pacific region is anticipated to experience a rapid adoption of DRMS with countries such as China and India being the new technology adopters.

Competitive Insights

EnerNoc Inc., Comverge, CPower, Honeywell International Inc., Schneider Electric, Siemens AG, and ABB are some of the top DR solution providers. These companies form the founding pillars of the Open Automated Demand Response (OpenADR) alliance. The alliance was established in 2010 by multiple stakeholders of demand response to support the development of the OpenADR system and participate in grid reliability and dynamic pricing system.

Other prominent energy providers participating in the DR program include Johnson Controls, Eaton Corporation Plc, Ecobee, EnergyHub, Inc., General Electric, Nest Labs, Opower, and ThinkEco Inc. Some start-ups, such as SureGrid, BuildingIQ, and EPS Corp., have established the cloud-based energy management system and are expected to play a crucial role in the growth of DRMS.

Report Scope

Attribute

Details

Base year for estimation

2015

Actual estimates/Historical data

2014 - 2015

Forecast period

2016 - 2025

Market representation

Revenue in USD Million & CAGR from 2016 to 2025

Regional scope

North America, Europe, Asia Pacific, Latin America, MEA

Country scope

U.S., Canada, UK, Germany, Japan, China, India, Brazil, Mexico

Report coverage

Revenue forecast, company share, competitive landscape, growth factors, and trends

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the Demand Response Management System (DRMS) market on the basis of technology, component, application, and region:

  • Technology Outlook (Revenue, USD Million; 2014 - 2025)

    • Conventional demand response

    • Automated demand response

  • Component Outlook (Revenue, USD Million; 2014 - 2025)

    • Hardware

    • Software

  • Application Outlook (Revenue, USD Million; 2014 - 2025)

    • Residential

    • Industrial

    • Commercial

  • Regional Outlook (Revenue, USD Million; 2014 - 2025)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • UK

    • Asia Pacific

      • China

      • Japan

      • India

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa (MEA)

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