Business Models for Energy Management Solutions

by Mindi Sue Sternblitz-Rubenstein | Oct. 16, 2012

Developing a more cost-effective approach to executing demand response is one of keys to advancing the industry. One of the key technologies that will reduce overhead associated with demand response is the automation of energy transactions. Automating energy transactions will enable an energy marketplace, permitting smart appliances and thermostats to act on their owner's behalf and participate in the demand response market.

Demand response programs at the wholesale level are already changing. ISOs are beginning to use DR to sell back excess power from renewables. In addition, ISOs are putting processes in place to comply with FERC rules to give demand response equal footing with generation in real time, day ahead, and forward capacity markets.

Given the huge variation in how the over 3,000 U.S. electric utilities are pursuing demand response as well as the FERC rulings on integrating demand response into the power markets, it is likely that the private sector will develop platforms that will enable individual homes to participate in the wholesale power market. Open markets may include integrating wholesale and retail markets, allowing residential consumers to participate in wholesale markets without going through the utility. Platforms that enable the transition to open markets will eliminate technical, financial, and physical barriers to entry and create markets for numerous energy management solutions.

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