CEO: Demand Response Market Will Grow to $6 Billion in Five Years

Joule Assets describes the opportunity in negawatts.

Americans are accustomed to being told that they are running behind other countries, that other places are doing a better job of educating their young or building high-speed railroads or ensuring access to healthcare. Energy efficiency would seem to be the last area in which the U.S., with its famously well-lit and climate-controlled lifestyle, would be leading.

But in fact, demand response markets that allow customers and power providers to reap the benefits of "negawatts" (essentially un-used power they would traditionally demand or need to supply) are highly developed in the U.S., if admittedly still imperfectly understood and applied. The market for demand response, which is the activity that creates "negawatts," has grown from essentially nothing a decade ago to a $3 billion market today, Joule Assets CEO Mike Gordon told AOL Energy on the sidelines of the AGRION Energy & Sustainability Summit in New York City this month.

Joule describes itself as a service and technology provider to utilities and to commercial and industrial consumers.

The potential for growth in the U.S. market remains extraordinary, Gordon says, with improved market clarity and access to financing driving a doubling of market size to $6 billion in the next five years. The total market size could be a remarkable $65 billion in the U.S., he says. Gordon, who founded an early demand response firm that was sold to forward-thinking Constellation Energy a couple of years ago before its sale to the huge Exelon power group, says that markets abroad have even more potential, which his new company is helping to create.

Joule Assets is working with European regulators to inform the all-important market rules that dictate how demand reduction is quantified and paid for as countries and companies there work to more closely knit together their power grids. The company has built a comprehensive database that allows for the comparisons and analysis supporting market transparency, and is both licensing that database to market players while using it to identify areas it can provide financing from its own investment fund in partnership with "vendor community" companies like DR equipment suppliers.

The Joule Assets database, released only three weeks ago, has 10 million data points, Gordon says, and service providers to utilities have been clamoring for access, often seeking to integrate their own software with the database for actionable analysis of the still-opaque but lucrative market.

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Editor's note: This article is reposted in its original form from AOL Energy. Author credit goes to Peter Gardett.