Demand Response Management System Market Size, Share & Trends Analysis Report By Technology (Conventional, Automated), By Application (Residential, Industrial), By Region, And Segment Forecasts, 2024 - 2030

Market Size & Trends

The global demand response management system market size was valued at USD 8.74 billion in 2023 and is projected to grow at a CAGR of 16.3% from 2024 to 2030. This growth is attributed to the rising adoption of smart meters in the residential segment, enabling real-time communication between customers and utilities to implement demand response programs. In addition, integrating Electric Vehicles (EVs) with smart grids creates new opportunities for demand response management. Increasing government regulations and initiatives encouraging the adoption of demand response to improve grid reliability and reduce environmental impact, which in turn is expected to drive the market growth.

Integrating Distributed Energy Resources (DER) such as solar, wind, and energy storage systems, which require advanced grid management solutions such as DRMS, also contributes to the market's growth. The software technology platform of the demand response management system assists energy retailers, suppliers, and utilities in utilizing demand response (DR) programs with an integrated system linked to industrial, commercial, and residential sites. It is one of the important peak load management tools with numerous advantages for lowering the improper balance of power supply and demand.

Furthermore, with the increase in applications of Advanced Metering Infrastructure (AMI) meters, utilities attain the real-time usage data of clients or customers, resulting in the growth of customer participation in programs. However, the rapidly growing population has impacted the available natural resources worldwide, which has led to the need for energy efficiency because of an improper balance between energy supply and high demand. Therefore, demand response is becoming a significant advantage in the Smart Grid ecosystem. These things are critical to the capability of customers to make choices to minimize energy consumption. They are vital to the operations of various electric utilities, such as peak load management, economic control, and distribution system operations and optimization.

Technology Insights

The automated demand response dominated the market with the largest revenue share of 52.0% in 2023. This growth is attributed to automated demand response systems that are precise in reducing energy and adjusting energy usage in real-time based on data from sensors and other monitoring devices. Furthermore, automated demand response systems are easier to manage because they require minimal manual intervention and can be customized to fulfill the specific requirements of large commercial or industrial organizations.

Conventional demand response is expected to grow at a CAGR of 13.1% over the forecast period driven by different DRMS applications in many sectors, such as healthcare, automotive, consumer electronics, and industrial production. In addition, advancements in research and development led to product innovation, leading to better performance, durability, and sustainability. Furthermore, government policies are evolving to address awareness of environmental sustainability and ensure product security, which further leads to market expansion.

Application Insights

The industrial applications segment dominated the market and accounted for the largest revenue share of 45.3% in 2023. This growth is attributed to managing the considerable energy loads mainly of industrial services. It comprises strategies such as load shedding, load shifting, and utilizing on-site generation of their more significant power consumers, particularly in peak periods. Furthermore, the consumption rate of this sector is greater than that of the total load by utility. In addition, they focus on manufacturing plants, heavy industries, and large-scale energy consumers, which is expected to boost the segment’s growth further.

Commercial application is expected to grow at a CAGR of 17.0% over the forecast period. Commercial demand response management systems are intended for utilization in office buildings, retail stores, schools, or hospitals. Integration of demand response management systems with commercial buildings to enhance energy management and participate in demand response strategies, including peak times, load shifting, and real-time pricing policy. It aims to minimize energy expenditures and generate additional returns through demand response programs. It provides better controls that permit these facilities to automate energy reductions without dealing with lower operations.

Regional Insights

The North America demand response management market dominated the global market and accounted for the largest revenue share of 40.5% in 2023. This growth is driven by the broad establishment of grid set-ups in economies. In addition, the regional energy sector observed a rise in smart grid investments under the Smart Grid Investment Grant. The program focuses on improving the growth and implementation of smart grid technologies, which, in turn, is expected to drive the growth of the country's market.

U.S. Demand Response Management System Market Trends

The demand response management market in the U.S. dominated the North America market with the largest revenue share of 77.2%. This growth is attributed to the rising demand for these management systems, driven by well-established energy strategies and guidelines, technological saturation in advancement, and the expertise of significant companies continuously innovating in the smart grid space.

Asia Pacific Demand Response Management System Market Trends

Asia Pacific demand response management market is expected to grow at a CAGR of 18.3% over the forecast period owing to robust industrialization, increasing demands for energy levels and emerging government policies with initiatives and assistance further boosting energy efficiency in China, Japan, and Australia. In addition, the increasing adoption of smart grid infrastructure, government initiatives to promote renewable energy and energy efficiency, and the need to better manage the intermittency of renewable power sources are also driving the market's growth in the region.

The demand response management market in China is expected to grow significantly, owing to its massive industrial infrastructure with an estimated peak load; however, China is a large market for demand response management systems. The country has dealt with power shortages because of robust economic growth, a situation that has retreated in recent years. To manage this obstacle in electricity demand and supply, large customers were encouraged to undertake administratively rationed, uncompensated load reductions to lower the peak demand.

Europe Demand Response Management System Market Trends

The Europe demand response management marketis expected to grow significantly as various new entrants, primarily aggregators, have been observed. DRMS is becoming a lucrative alternative for demand response service providers. Furthermore, European countries are adopting large-scale smart grid technologies and parts in their power systems, driving market growth.

The demand response management market In the UK is expected to grow substantially over the forecast period. This growth is driven by the increasing adoption of smart grid infrastructure and the need for better energy efficiency. In addition, the volatility in energy prices and the push towards renewable energy sources also contribute to the market growth. Furthermore, government initiatives to reduce carbon emissions and improve grid reliability further enhance the demand for these systems in the UK.

Key Demand Response Management System Company Insights

Some of the key companies in the demand response management system market include ABB, Eaton, Enel X S.r.l., EnergyHub, General Electric Company, Honeywell International Inc., and Itron Inc. in the market are focusing on development & to gain a competitive edge in the industry.

• ABB is a tech company offering digitally linked and augmented industrial components and systems to clients in the utilities, industry, and infrastructure sectors. The company also provides electrification and automation solutions. ABB focuses on developing and marketing products, systems, solutions, and services associated with electrification products, motion, and industrial automation.

• Honeywell International Inc. provides energy-efficient products or solutions, process technologies, specialty chemicals, electronic and advanced materials, productivity, safety, security technologies, and devices or parts.

Recent Developments

• In July 2024, Siemens partnered with PANA Infrastructure to advance and upgrade Nigeria's electric power infrastructure by providing grid automation and smart infrastructure solutions.

• In June 2024, ABB and Cleanwatts Digital s.a., a software solutions provider of artificial intelligence (AI)-driven energy-sharing in connected, sustainable communities, executed a memorandum of understanding for building developed energy management and efficiency technologies for societies and buildings.

• In May 2024, Itron and Schneider Electric formed a partnership, incorporating their intelligent grid and distributed energy resource (DER) management solutions to digitalize the supply and demand of electricity.

Demand Response Management System Market Report Scope

Global Demand Response Management System Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and analyzes the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global demand response management system market report based on technology, application, and region. 

• Technology Outlook (Revenue, USD Million, 2018 - 2030)

  • Conventional Demand Response

  • Automated Demand Response

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Residential

  • Industrial

  • Commercial

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • South Korea

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • South Africa

    • Saudi Arabia

    • UAE