Ah, summertime! Nothing but long days complete with ice cream cones, sandy beaches and peak load management. As temperatures smolder in the 90s after hitting triple digits early in the season, electricity demand is soaring around the country, hitting near record highs in some regions.
While demand response was already a hot topic in smart grid circles (not to mention load shedding, which has been around longer than the phrase 'smart grid'), it has become absolutely necessary during these periods of critical peak demand. And this might be just the beginning. The Federal Energy Regulatory Commission estimated there was a reduction of 37 gigawatts in peak demand from demand response in 2009, and FERC projected that the figure could jump to 188 gigawatts in 2019.
Demand response is also shifting these days from just shedding that critical peak load to offering more constant management, a trend that is altering the field, creating opportunities for the current players, and carving openings for other companies looking to get in on the action.
So 'tis the season to take a look at the demand response leaders:
Might as well start with the big boys. EnerNOC has been piling on megawatts under its management in the first half of this year. At the end of 2009, the Boston-based company claimed to have 3,550 MW, and deals with TVA, the PJM Interconnection and various utilities bring its current load management closer to about 5 GW. Last year, EnerNOC also bought two other companies: Cogent Energy, a company that provides energy efficiency and building control systems, and eQuilibrium Solutions, a carbon accounting company. The acquisitions by the demand response leader will allow it to expand its long-range plan of offering more complete services to its customers to stay competitive in a field that is seeing a lot of competition.
Going almost toe-to-toe with EnerNOC is Comverge, which also manages more than 4 gigawatts of load. While Comverge has been known for its focus on the residential market, which made up 25 percent of its business in 2009, it has been shifting focusing on the commercial and industrial market in 2010. Comverge is not a one-trick pony; it also sells hardware like remote-control thermostats to customers. Comverge also scored with the PJM auction this year, adding about a gigawatt of energy to its business. Although Comverge sees no end in sight for the C+I business, it is uniquely positioned to take advantage of the residential market, which will expand as states, like Pennsylvania, legislate demand response across the board.
CPower comes in a solid third in terms of megawatts, managing 2,800 of peak load as of April 2010. But like the big two, CPower is also looking to other load management and energy services, including renewable energy credits and energy efficiency, because after all, peak critical demand is only a few dozen hours every year. It doubled its management load in 2009 and was the largest aggregator on the Texas grid, a market that is at the top of the DR list. Despite being a startup, CPower boasts some big-name clients, including Walmart, and the company is even thinking of expanding overseas.
While EnerNOC is moving from demand response into building management, one of the biggest names in that space is going in the other direction. Earlier this year Honeywell bough Akuacom, a demand response company that uses open automated demand response, or OpenADR. Demand response is going to continue to grow no matter what, but for many companies, the appeal of an automated system is going to trump a digital message telling the building manager to adjust the HVAC system. Before the building controls giant even purchased Akuacom, it was already building an OpenADR system for Southern California Edison to help automate the utility's critical peak pricing program. Voluntary critical peak programs are expanding, both in the commercial and residential side, which gives Honeywell a key advantage as its systems are already in place in many buildings.
5. Schneider Electric
The French electricity giant may not be directly managing load for utilities the way that EnerNOC or Comverge are, but it provides the equipment and systems that allow for substantial load reduction and is positioning itself to take demand response to the next level. As the big peak load management companies try to diversify for the next step in demand response, Schneider is already there with both hardware and software that allows for not only turning power off during the hottest days of the year, but also shifting and tweaking demand throughout the year. As demand response moves from being an added bonus to a mission-critical must-have for utilities across the globe, Schneider is well positioned to answer their needs. Deep pockets don't hurt, either. Schneider was also named one of Greentech Media's Top 10 Green Giants.