The worldwide Demand Response Management Systems (DRMS) market is anticipated to reach nearly USD 36 billion by 2025. It stood at around USD 7 billion in 2015. Government support for the adoption of smart grids & meters and Demand Response (DR) systems is the key market driver during the forecast period (2014 to 2025). Rising support from various energy regulatory agencies can further support the market expansion.
Demand Response Management Systems (DRMS) provide additional energy to electric utilities. Advent of smart grids is the key contributing factor for the rapid adoption of DRMS. These systems were created to offer cost effective electricity to the consumers at wholesale rates, especially during peak periods. Advanced Metering Infrastructure (AMI) can further support the growth. However, lack of consumer awareness may impede market potential during the forecast period.
DRM systems are a better alternative to power plants which are more expensive and used only by commercial or industrial enterprises. They have the potential to integrate greener solutions such as wind & solar energy. Consumers prefer in-home displays, Programmable Communicating Thermostats (PCTs), and other smart home technologies. Major corporations can capitalize on this trend by offering appropriate DR programs in the near future. For example, ZigBee Smart Energy Profile that is embedded within smart meters. They conserve energy on smart applications.
The global Demand Response Management Systems (DRMS) market is segmented according to technologies, components, applications, and regions. On the basis of technologies, the market is bifurcated into automated and conventional demand response. In 2015, Automated Demand Response (ADR) accounted for nearly a quarter of the global market on account of revenue. It is expected to grow at a significant CAGR over the forecast period. High preference by power-providing utilities and consumer awareness can support this demand during the forecast period. Conventional DR on the other hand, may register a stable growth in the near future despite its slow adoption rate.
According to components, the segments are hardware and software. Hardware may dominate the global market on account of demand from 2014 to 2025. It is anticipated to grow at a CAGR above 15% in the forthcoming years. Transition to smart grids by power companies can propel the growth. Software may grow at a steady CAGR due to the high requirements of software & hardware components for integrated solutions.
Major market applications are commercial, industrial, and residential. Industrial sector encompasses schools & hospitals, agriculture, universities, and energy & power. Residential may hold around 25% market share on account of revenue till 2025. It is anticipated to grow robustly during the forecast period.
Geographically, the global market is divided into Latin America, North America, Middle East & Africa (MEA), Asia Pacific (APAC), and Europe. North America held the largest market share in terms of revenue in 2015. High adoption of DRMS by utility providers from the U.S. can impel the regional growth. APAC is expected to showcase substantial CAGR during the forecast period. Rising adoption of DRMS by India and China is anticipated to support the expansion. MEA and Latin America may exhibit robust growth rate in the forthcoming years owing to favorable regulations and rising awareness.
Key players operating in the global market for Demand Response Management Systems (DRMS) comprise Eaton Corporation Plc; Nest Labs, Inc.; Siemens AG; Honeywell International Inc.; and ABB. These players have formed a coalition to establish regulations for dynamic rates & grid reliability within the market. The coalition aims to undertake assistance from Redwood Systems, which provides innovative methods for energy conservation without increasing the load capacity of utilities.