DEMAND RESPONSE, NEW ENERGY AND POWER MARKETS

Demand Response and Renewables Integration Will Drive the Growth of Short-Term Power Markets
March 8, 2012 (Pike Research)

"Due to the prohibitive cost of storing electricity on a major scale, short-term power markets are relied on to balance generation and load on a 24/7 basis. These markets typically take the form of a day-ahead market that provides a preliminary forecast of the next day’s power generation and consumption, and a real-time market, which is used to balance the actual generation to load…

"…Due to advancing technology and declining prices for renewable energy, particularly wind and solar, demand response (DR) and renewables integration are both growing into significant factors in the short-term markets. Demand response acts as a counterbalance against price volatility in the short-term power markets, while the integration of renewables means that weather fluctuations will increasingly affect the short-term price of power. According to a recent report from Pike Research, these two forces will lead to accelerating growth in short-term power markets over the next several years."

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"Trading services will grow from $283 million in 2011 to as much as $333 million in 2016 under an economic recovery scenario, the cleantech market research firm forecasts. Under a slower growth model, trading services will reach $317 million in 2016…

"Data management and forecasting can help to make more effective trades and to help limit exposure to sudden price fluctuations. Once transacted, there are complex rules associated with settlements of trades. Vendors that offer these types of services are expected to see strong growth in the coming years…[A]s the markets develop…Pike Research expects there to be new entrants in the playing field when credit becomes available and price volatility offers opportunities…"