Analyst Insight: Demand Response and Energy Efficiency Update

As economies around the world look to cut emissions from the power sector by installing more renewable energy capacity, that flexibility must come from additional sources. Demand response (DR) is seen as a promising tool to match consumers’ electricity demand with available supply, but its adoption is still a long way from reaching this potential. Still, the increased proliferation of distributed energy resources (DER) being installed on customer property is spurring energy efficiency (EE) installations and leading solution providers to offer more integrated, comprehensive, and bundled energy solutions to customers through innovative business models.

The Global DER Deployment Database 3Q23 covers 14 DER technologies grouped into four distinct parts of the value chain that generate, manage, and consume electricity. Despite their distinct characteristics, these technologies usually operate behind the meter at customer facilities. In some cases, the technologies are owned and operated by actors outside traditional utilities, such as the technology owner or third-party service providers and aggregators.

This Analyst Insight focuses on demand response (DR) and energy efficiency (EE) capacity and revenue forecasts for world markets. It also considers some of the updated forecasts in the Global DER Deployment Database 3Q23, different DR applications, a focus on the UK market, and key recommendations for consumers, utilities, and governments.