Demand response is going global.
Honeywell has been selected by a subsidiary of the State Grid Corporation of China, the organization that oversees the grid in the country, to participate in a project to study demand management and advanced energy management in buildings.
Efficiency and demand response have become an export market for U.S. companies. These are also two of a small number of technologies -- along with advancedsolarideas -- from the U.S. that are in demand in China. China does not have demand response as we know it. Parts of the grid can be shut off, but the country currently doesn't have the sort of fine-grain controls that would allow a central administrator to curb power by 10 percent to air conditioners in a specific vicinity. Nonetheless, interest is high: recent regulations require Chinese utilities, which are state-owned entities, to their reduce energy sales volume by 0.3 percent a year through efficiency gains. It doesn't sound like a lot, but that much energy could power 1 million U.S. homes for a year (California public utilities are encouraged to cut power by 1.5 percent a year).
Experts began to discuss the possibility of demand response experts going to China late last year. Soon after, Johnson Controls, Honeywell's rival, obtained a license to start providing energy management services. How long will the opportunity last? It's hard to say. China has a preference for helping homegrown manufacturers. Thus, one can anticipate domestic companies figuring out demand response and taking over the market themselves. On the other hand, demand response and efficiency are tricky, and U.S. companies might as well capitalize on it when they can. (Another plus: demand response is less reliant on things like intellectual property and many in China are skeptical of patents.)
Expect to see demand response providers flock to England too thanks to an aggressive push on smart grid and efficiency; EnerNoc, for example, is already involved in a pilot there.
Honeywell is one of the world's largest demand response providers and building control. Additionally, it makes quite a bit of electrical equipment. Earlier this year, Honeywell and Haier Group, China’s largest home appliance brand, announced a memorandum of understanding on Friday to collaborate on developing high energy-efficiency solutions for everything from homes to mass transit.