Demand Response

What is Demand Response? In an electricity grid, electricity consumption and production must balance at all times Demand response in most cases is targeted at reducing peak demand to reduce the risk of potential disturbances, avoid additional capital cost requirements for additional plant, and avoid use of more expensive and/or less efficient operating plant.

Significant Potential Results An approximately 10% reduction in peak demand (achievable depending on the elasticity of demand) would result in systems savings of between $8 to $28 billion It is estimated that a 5% lowering of demand would result in a 50% price reduction during the peak hours of the California electricity crisis in 2000/2001

Electricity Pricing In many electric systems, some or all consumers pay a fixed price per unit of electricity independent of the cost of production at the time of consumption. The consumer price may be established by the government, a regulator, or represent an average cost per unit of production over a given timeframe (for example, a year). Consumption therefore is not sensitive to the cost of production in the short term. In economic terms, consumers' consumption of electricity is inelastic in short time frames since they do not face the "real" price of production; if consumers were to face actual prices in short periods, they would (presumably) increase and decrease their use of electricity in reaction to price signals.

Industry Highlights and Risks There's also a chance that utilities will opt to develop their own energy-management technology in-house. But state regulators justify their existence at least in part by keeping electricity rates low for customers, which is why building new infrastructure can be a tough sell if there are cheaper alternatives. Meanwhile, Comverge, whose DR efforts focus more on what happens inside a building, vs. EnerNOC’s outside emphasis, just announced that its in-home display (IHD) product was just Zigbee certified. With Zigbee starting to emerge as “the” protocol for indoor energy-saving devices, and with the IHD market for controlling and reducing power consumption expected to be very lucrative, Comverge’s announcement is important.

Who is Comverge? Comverge is the only provider of outsourced pay-for-performance Demand Response programs across all customer classes, including residential, commercial and industrial

Comverge Products and Services Demand Response –ZigBee® SuperStat –SuperStat –ZigBee® DCU –Digital Control Unit –Adaptive Algorithm –Demand Manager C&I Advanced Metering Infrastructure –PowerPortal In-Home Display (IHD) –Maingate C&I –Maingate S4 Underglass –Maingate Home –Maingate Multi » Service Reconnect Device

Strengths

Weaknesses

Opportunities

Threats

Financial Analysis

Key Metrics

Historical Performance

Recommendations Buy the industry - 50/50 buy both

Notes enernoc-comverge-may-be-today-s- best-alternative-energy-pure-plays