By Brian Warshay

In late October, the Federal Energy Regulatory Commission (FERC) approved a request by the PJM Interconnection to allow for small-scale assets down to 100 kW to

These demand-side regulation projects represent the next generation of traditional demand response (DR) and automated demand response (AutoDR) services, which generally offer response times on the order of 10 seconds to 15 minutes.

Over the last decade, DR has rapidly gained traction in the power markets thanks to its low capital cost and minimally invasive involvement from customers during DR events. However, the onset of DR auctions has allowed utilities to take a direct role in offering DR services, potentially undercutting companies with higher margins. As a result, pure-play DR companies are being snatched up or phased out by larger energy management companies that can offer a wider variety of services to their customers.

The line between DR and energy-management systems will continue to blur as it evolves into a single market segment. Remaining DR-only providers will need to partner up with energy management companies, offer energy management services themselves, or provide a technological advantage over other DR providers, such as the capability to provide reliable rapidly deployable automated DR.

By nearly eliminating customer involvement in DR events and providing a rapidly available DR resource, DR service providers can gain added value by participating in not only demand response, but pay-for-performance frequency regulation, as well.