Industrial Sector Is Critical Partner in Reducing Peak Load

The industrial sector offers unique opportunities for demand response (DR) because it is able to contribute unusually large amounts of load reduction, even from just one plant. As DR is increasingly adopted in many countries around the world, industrial facilities will become a critical customer segment. According to a new report from Pike Research, a part of Navigant’s Energy Practice, industrial DR, as measured by peak load reductions, will grow steadily during the remainder of the decade, expanding by 14.7 percent per year from 2012 to 2019.

“Thanks to its long history of DR and early adoption of automated DR, the U.S. has led the way with respect to the use of industrial DR,” says senior research analyst Marianne Hedin. “Today, though, other countries, including Canada, the United Kingdom, France, South Africa, Israel, China, Japan, South Korea, Australia and New Zealand are increasing the pace of adoption or conducting pilots to explore the feasibility and value of industrial DR programs.”

The set of industries that are involved in DR programs includes many discrete and process manufacturers, such as producers of cement, chemicals, steel, paper and pulp, food and beverages, information technology, construction and building materials, and many more. In addition, oil refineries and agricultural plants potentially have a big role to play in industrial DR, according to the report. Because irrigation systems, for example, require significant consumption of electricity, an agricultural facility can reduce a great deal of load.

The report, “Demand Response for Industrial Markets”, examines the global market for industrial demand response, detailing the breakdown of peak-load curtailment into two major customer segments: small/medium and large/very large industrial customers. The report provides data about how much these different industrial DR participants receive in payments by utilities, grid operators or aggregators when they reduce their load at peak times. The market forces and competitive landscape are explored in depth, and 21 industrial DR vendors are profiled. The report also provides forecasts for industrial peak load curtailment, in terms of capacity and reduction payments, broken down by region and by market segment. An Executive Summary of the report is available for free download on the Pike Research website.