The global demand side response (DSR) capacity market is expected to grow to 144GW by 2025.
That’s an increase from nearly 39GW this year, according to a new report.
It states new business models, technology and software use will act as key enablers of future DSR adoption.
DSR is a scheme where customers are incentivised financially for lowering or shifting their power use at peak times to help manage load on the electricity network.
North America is expected to be the region with the greatest adoption but other regions will also begin to implement demand response in the next decade.
Market structures are also said to be reformed in Canada, Europe and Asia to allow DR to compete against generators for revenue.
The report adds two of Europe’s largest electricity markets – France and the UK – plan to open capacity markets by 2017 that would allow DR participation. South Korea now allows DR to compete equally with generators in the electricity market.
The annual revenue is forecast to reach $6.7 billion (£5bn) by 2025, it states.
However specific barriers to DR development still exist due to environmental and reliability concerns.
Brett Feldman, Principal Research Analyst at Navigant Research said: “DR is proliferating but it is also falling under greater scrutiny. As DR has become a larger part of the resource base, regulators and other market participants are calling for tighter requirements to ensure reliable operations and efficient markets.”