With more than 100 gigawatts potentially up for grabs in the next decade, the demand response market could easily accommodate a host of players. There are plenty of startups that may make their own mark, or be folded into the ranks of an established giant.
SureGrid takes automated demand response, similar to what Honeywell is doing, and takes it to the next level. The company has created a cloud computing-based building management system that attempts to curb energy by fine-tuning the HVAC system. The system examines weather data, room occupancy, traffic and use patterns and turns the chillers up or down accordingly without a building manager having to do anything. Just this week, the company also released PowerCommand 2.0, which allows utilities to see their aggregated load in real-time, 60-second intervals. Although it only has a small fraction of the megawatts that EnerNOC and Comverge control, the company's approach to automated demand response makes it ripe for acquisition.
The weather is at least partly to blame for peak load in the first place; after all, it's all of those sweltering or freezing days that make people run to their thermostats. BuildingIQ, a building management startup out of Australia, is using weather information to enhance building management systems that are already in place (it's not looking to be the next Johnson Controls). The software collects data about air conditioner settings, thermostat levels, etc., and combines it with a weather feed that provides forecasts for the next 24 to 48 hours and other data like electricity rates. A computerized simulation of the building and its thermal characteristics is also added to the mix. Servers at BuildingIQ's data center then mine all this data to devise a refined building management plan that gets updated every ten minutes. On the residential side, EcoFactor offers a weather-based service as well, and while it can provide demand response, the company is pitching itself as providing cost savings to customers rather than load management to utilities.
EPS Corp. offers a real-time energy management system that includes both software and hardware that is sold as a service. The company focuses on curbing power at industrial sites, but it recently landed an agreement with the Energias de Portugal to provide its software to the utility's customers in Portugal and Spain. Building management giants like Siemens offer similar services, but many are proprietary, while EPS' hardware and software can accommodate any industry standard.
It's no secret that HVAC systems are one of the biggest energy hogs. So it makes sense that Optimum Energy is focusing on the air conditioning system to save customers money and earn them LEED points. While an average building might require up to 1.4 kilowatts of energy to chill a ton of water for its air conditioning system, Optimum can reduce that to 0.5 kilowatts per ton. It has developed a software-as-a-service system that monitors and controls the chilling systems, which provide the water for air conditioners in large buildings. It's not the first system to control water chillers, but this software has greater complexity. It uses an algorithm that allows the water temperature to rise without the building temperature creeping up. Optimum Energy CEO Nathan Rothman estimates there are as many as 150,000 buildings in the U.S. that could benefit from such a system, saving a whopping 75 gigawatts in the process.
Lighting also eats up a lot of energy in the commercial space, and there is no shortage of companies that have solutions to manage lights. Adura Technologies and Lumenergi are both primarily focusing on dimming or switching off fluorescent bulbs, which account for 85 percent of the lighting in commercial office buildings. Redwood Systems has another approach to networking, replacing lighting wires and regular bulbs with Ethernet cables and LEDs that can then be managed. Digital Lumens offers networking technology, too, but it is dealing strictly with LEDs that are connected by a mesh network that pays for itself in just a few years. Any of these companies could get scooped up into a building management giant to offer a more complete suite of demand response services that moves beyond tweaking HVAC systems.
The World DR Exchange is just what it sounds like: an online exchange for demand response capacity. A seller figures out how much it can voluntarily curb power consumption (with the minimum requirement being at least one megawatt), and then once they put it on the market, demand response companies can bid on it and resell it to a local utility. The DR Exchange just got off the ground earlier this year and could lead to more accurate market prices from buyers and sellers. The company has been around since 1996, and the DR Exchange is just one of its markets. It also supports the Regional Greenhouse Gas Initiative's (RGGI) cap and trade program for CO2 emissions.
There's nothing here to be bought, sold or acquired, but Pennsylvania's Act 129 deserves a mention for its call to cut peak demand by 4.5 percent by 2013. The reductions coincide with an elimination of caps on utility rates, which, ideally, could drive even more conservation through the threat of high prices. Although the sweltering days of summer make the case for demand response, legislation certainly plays a key role and other states are expected to follow. Interestingly, the law also calls for 70 percent of the demand response to come from the residential sector, so there will be ample opportunity for home management companies to team up with demand response providers in order to hit that mark.