Demand response is expanding its wings in many ways. About a year ago, two companies used demand response for frequency regulation in the PJM market, the grid operator that covers the Mid-Atlantic.

A similar project just played out in the United Kingdom, where Scottish demand response company Flexitricity recently dispatched sub-second demand response from a manufacturing plant for frequency services for National Grid.

The two pilots would make it seem as though the demand response markets are moving along in tandem from both sides of the pond. Nothing could be further from the truth.

Demand response is a far more mature market in the U.S., where a few large companies and endless startups bid megawatts into ever-changing markets. The bulk of the megawatts have traditionally gone to capacity resources, but increasingly, demand response is playing in additional markets, including frequency regulation and spinning reserves. Residential demand response is also increasingly becoming a reality in small doses.

In the U.K., however, there has traditionally been more generation than was needed, leaving little need for load shedding from the commercial and industrial sector. That is changing. “Everyone has known available generation is on its way down, but it’s not down yet,” said Alastair Martin, founder and chief strategy officer at Flexitricity.

The U.K. government estimates that the electricity reserve margins will be down to about 4 percent by 2015/2016, down from about 14 percent this year. The drop in reserve margins is due to retiring coal plants because of tightening environmental regulations and not enough new generation coming on-line fast enough. The reserve margins are similar to the shortfalls that Texas could be facing in coming years. 

Currently, most of the peaks in the U.K. come in winter, although there are increasing summer peaks, especially in financial centers like London. UK Power Networks, a distribution network operator, recently started a demand response pilot with Flexitricity and ExCel, an exhibition and conference center in London. Like many demand response pilots in the U.K., load is shed but facilities might switch to backup generation, rather than just reducing load completely.

In coming years, the U.K. will likely need traditional demand response load shedding during capacity shortfalls, but it will also need frequency services from new sources. The bulk of frequency services have come from power generators and also from large industrial customers, like aluminum smelters. But large industries are closing and power generators might not be able to meet all of the need. “For this form of frequency response,” said Martin, “we’re the rebirth.”

Most of the frequency response would be provided when generators trip offline unexpectedly, said Martin, although that is just the tip of the market. The U.K. has large wind power penetration and is working on solutions to harness tidal and wave power. He said his company has the types of resources -- from C&I facilities to small power producers -- that can supply the balancing reserves for increasing amounts of renewables in the future.

Flexitricity, which launched its service in 2008, said it was the demand response provider that operated a 24-hour control room in the U.K. While Martin would not give an exact figure of megawatts under contract, he suggested it was comparable to a large coal-fired power plant.

For Flexitricity, automation is key to its offerings. The company is keeping an eye on the OpenADR standard being developed in the U.S., but “we’re starting from further back,” said Martin. He noted that non-automated demand response trials in the U.K. were very challenging. For building managers, “demand response is never their day job,” said Martin. “No matter how skilled or intelligent the individual, we will never be their day job.”

Martin said that while other demand response providers might have moved into DR from other energy services, Flexitricity was squarely focused on demand response, especially because it’s a young market. For other competitors that try to be one-stop shopping, “I think it’s distracting,” said Martin. “It’s hard to do demand response well.”

One competitor that has crossed the pond from the more sophisticated U.S. market is EnerNOC. Interestingly, EnerNOC’s first foray in to the U.K. market was in energy services, and not just demand response. For the many homegrown companies, Flexitricity said that there was more value-add by working with building controls company, ESCOs and energy efficiency companies rather than competing with them. “They help us because we do the bit they don’t do,” said Martin, adding that providing the right type of load shed and the right customer experience is key to growing the market in the U.K.

“It’s easy to sign up to a demand response program,” he said, “but it takes far more work to implement it. “If it doesn’t go well for [the customer], it’s really easy to turn it off.”