By
Josh Schellenberg Published: 16 February 2010 10:00 PM UTCPosted in: Demand ResponseTags: Demand Response 
Recently, I had an interesting conversation with Gregg Dixon, Senior Vice President of Marketing at EnerNOC – the leading demand response provider in North America. We talked about EnerNOC’s role in the market as well as the future of demand response. The following is a summary of the highlights of our conversation.
EnerNOC has 3,550 MW of load reduction capacity in its portfolio. All of this capacity comes from commercial and industrial (C&I) customers. Interestingly, EnerNOC has no plans for the residential market, according to Dixon. The company made a decision to stay out of the residential market and has stuck with that plan.
After talking about EnerNOC’s role in the demand response market, we discussed the Federal Energy Regulatory Commission’s National Assessment of Demand Response Potential. This study estimates the potential growth of demand response in the United States from 2009 to 2019. Four different scenarios are considered (from least to most potential) – Business-as-Usual (BAU), Expanded BAU, Achievable Participation and Full Participation. The following figure shows the projected demand response capacity in 2019 under each of these four scenarios:
Considering EnerNOC’s focus on the C&I market, Dixon had a few qualms with these results because they show more potential for growth in the residential sector. As shown in the above figure, residential demand response capacity shows the most growth from BAU to Achievable Participation and Full Participation.
According to Dixon, the BAU scenario overestimates large C&I demand response capacity because many existing programs are underutilized by utilities. “If we are the leader in this market and we have 3,550 MW of capacity, where is the rest of it coming from?” Although utilities may count all of their demand response capacity, if an event is never called for a given program, should its capacity be included in the BAU scenario? Perhaps there is potential for growth within existing large C&I programs as well as in new programs. Nonetheless, this potential for growth was not taken into account in this study.
Realistically, the United States will most likely end up somewhere between the Expanded BAU and Achievable Participation scenarios. Full Participation is unrealistic, and with all the recent support for demand response, it is unlikely that we will proceed as usual. If the United States ends up between Expanded BAU and Achievable Participation by 2019, C&I demand response capacity will grow by between 28 and 40 GW and residential demand response capacity will grow by between 15 and 59 GW.
EnerNOC will play a key role in making sure that the C&I sector maximizes its demand response potential. If the residential sector sputters and EnerNOC experiences success in the C&I sector, Dixon may end up being right that there will be more growth in the C&I sector by 2019.
After all, “EnerNOC can put a load control device on a C&I air conditioning unit and get 25 to 30 kW of load reduction, whereas the same device on a residential unit will only get 1 to 3 kW,” according to Dixon.
There may be more potential in the residential sector in terms the total amount of peak kW out there, but the extent to which that potential is realized depends on cost-effectiveness. No matter how large or small an air conditioning unit is, the utility or demand response provider still needs to buy the load control device and send someone into the field to install it. Is it worth it for 1 to 3 kW? Perhaps EnerNOC is wise to stay out of the residential sector.
