All Reports
3Q 2024

Distributed Energy Resource Flexibility

Flexible DER Capacity, Implementation Spending, and Revenue Forecasts in World Markets: 2024-2033

Power grid flexibility has historically come from dispatchable fossil fuel power plants, but world economies in pursuit of climate goals require alternative technologies and methods to reduce emissions from power generation. Customers in all segments are installing distributed energy resources (DER). When aggregated and enrolled in flexibility programs like virtual power plants (VPPs) or traditional demand response (DR), they can be valuable sources of energy, capacity, and other grid services leading to a more cost-effective, cleaner, and resilient power grid.

Advances in energy hardware and software are market drivers that grid operators can leverage for DER flexibility. Among the barriers to more widespread adoption are antiquated wholesale electricity market regulations and utility revenue structures, along with a lack of customer outreach and education. The regulatory landscape where a grid is located heavily influences a grid operator’s ability to use the various methods of achieving flexibility from DER, directly through the wholesale electricity markets, local flexibility markets, or distribution level programs.

This Guidehouse Insights report examines the flexible DER market including retail and wholesale VPPs and traditional DR programs. Regional level forecasts for capacity, implementation spending, and revenue are presented across five major geographic regions for the forecast period of 2024-2033. Capacity forecasts are segmented by technology type (VPP and DR) and customer segment (residential and commercial & industrial) while revenue forecasts are segmented by DER owner and the flexibility service provider.

Pages 47
Tables | Charts | Figures 45
  • What is flexibility on the power grid?
  • How can aggregated DER be used to provide flexibility on power grids?
  • What are the different methods grid operators use to procure DER flexibility?
  • Which regions, countries, or states have favorable regulations for DER flexibility?
  • Which region is forecast to have the highest amount of flexible DER capacity throughout the forecast period?
  • Which region is forecast to see the fastest growth of flexible DER capacity during the forecast period?
  • DER aggregators
  • Flexibility software providers
  • Grid operators
  • Regulators
  • Private investors
  • DER developers

1. Executive Summary

1.1   Introduction

1.2   Market Issues

1.3   Industry Value Chain

1.4   Market Forecasts

2. Market Issues

2.1   Introduction

2.2   Drivers

2.2.1   Low Cost Grid Resource Opportunities

2.2.2   Increased Customer Adoption of DER

2.2.3   Flexibility-Enabling Technology Advances

2.3   Barriers

2.3.1   Antiquated Regulations and Mismatched Incentives

2.3.2   Customer Outreach and Education

2.4   Other Business Issues

2.4.1   Upfront Costs of DER

2.4.2   Customer Incentives for Providing Flexibility

2.5   Regulatory Overview

3. Industry Value Chain

3.1   Introduction

3.2   Competitive Landscape

3.2.1   Merger and Acquisition Activities

3.3   DER Flexibility Procurement Methods

3.3.1   Wholesale Market Participation

3.3.2   Distribution Utility Programs and Bilateral Contracts

3.3.3   Local Flexibility Markets

3.4   Value of DER Flexibility

4. Market Forecasts

4.1   Forecast Introduction

4.2   Assumptions and Methodology

4.3   Forecast Definitions

4.4   Global DER Flexibility Market

4.5   Regional Forecasts

4.5.1   North America

4.5.2   Europe

4.5.3   Asia Pacific

4.5.4   Latin America

4.5.5   Middle East & Africa

5. Conclusions and Recommendations

5.1   Conclusions

5.2   Three Big Takeaways

5.3   Recommendations

5.3.1   DER Aggregators

5.3.2   Distribution Utilities and Grid Operators

5.3.3   Regulators and Market Operators

6. Acronym and Abbreviation List

7. Table of Contents

8. Table of Charts and Figures

9. Scope of Study, Sources and Methodology, Notes

  • Cumulative Flexible DER Capacity by Region, World Markets: 2024-2033
  • Cumulative Flexible DER Capacity, Implementation Spending, and Revenue, World Markets: 2024-2033
  • Cumulative Flexible DER Capacity by Technology and Implementation Spending, North America: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment and Implementation Spending, North America: 2024-2033
  • Flexible DER Revenue, North America: 2024-2033
  • Cumulative Flexible DER Capacity by Technology and Implementation Spending, Europe: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment and Implementation Spending, Europe: 2024-2033
  • Flexible DER Revenue, Europe: 2024-2033
  • Cumulative Flexible DER Capacity by Technology and Implementation Spending, Asia Pacific: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment and Implementation Spending, Asia Pacific: 2024-2033
  • Flexible DER Revenue, Asia Pacific: 2024-2033
  • Cumulative Flexible DER Capacity by Technology and Implementation Spending, Latin America: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment and Implementation Spending, Latin America: 2024-2033
  • Flexible DER Revenue, Latin America: 2024-2033
  • Cumulative Flexible DER Capacity by Technology and Implementation Spending, Middle East & Africa: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment and Implementation Spending, Middle East & Africa: 2024-2033
  • Flexible DER Revenue, Middle East and Africa: 2024-2033
  • DER Flexibility Value Chain
  • Flexible DER Capacity by Region, World Markets: 2024-2033
  • Flexible DER Revenue by Region, World Markets: 2024-2033
  • Flexible DER Implementation Spending by Region, World Markets: 2024-2033
  • Cumulative Flexible DER Capacity by Technology, North America: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment, North America: 2024-2033
  • Flexible DER Revenue, North America: 2024-2033
  • Flexible DER Implementation Spending, North America: 2024-2033
  • Cumulative Flexible DER Capacity by Technology, Europe: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment, Europe: 2024-2033
  • Flexible DER Revenue, Europe: 2024-2033
  • Flexible DER Implementation Spending, Europe: 2024-2033
  • Cumulative Flexible DER Capacity by Technology, Asia Pacific: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment, Asia Pacific: 2024-2033
  • Flexible DER Revenue, Asia Pacific: 2024-2033
  • Flexible DER Implementation Spending, Asia Pacific: 2024-2033
  • Cumulative Flexible DER Capacity by Technology, Latin America: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment, Latin America: 2024-2033
  • Flexible DER Revenue, Latin America: 2024-2033
  • Flexible DER Implementation Spending, Latin America: 2024-2033
  • Cumulative Flexible DER Capacity by Technology, Middle East & Africa: 2024-2033
  • Cumulative Flexible DER Capacity by Customer Segment, Middle East & Africa: 2024-2033
  • Flexible DER Revenue, Middle East & Africa: 2024-2033
  • Flexible DER Implementation Spending, Middle East & Africa: 2024-2033
  • DER Flexibility Regulatory Overview for Select Countries/Regions
  • Description of DER Flexibility Value Chain
  • DER Flexibility Market: Competitive Structure
  • Examples of Value of Flexibility
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