The Middle-East and African demand response management systems market is expected to register a CAGR greater than 9.5%. A demand response system (also known as a load response or DRS) is for end-use customers for reducing their use of electricity in response to power grid needs, economic signals from a competitive wholesale market, or special retail rates. Most of the demand response action today is in the commercial and industrial sectors. Moreover, technology giants of the region are leading the market space, with smaller companies supporting them with constant innovations and smarter software products. This scenario acts as a driver for the adoption of demand response management systems for utilities and customers. However, privacy concerns regarding the threat to consumers’ data through hacking are expected to hinder the growth of the market studied.

  • The automated demand response management systems are expected to grow at the fastest rate over the forecast period, owing to the increasing deployment of smart grids across the world, with advancements in the demand response system and software technology.
  • The integration of smart technologies in the existing grid structure is expected to create an ample amount of opportunities for the market players in the coming years.
  • The United Arab Emirates is expected to be the largest market in the region, owing to many upcoming renewable and smart grid projects to decrease the share of fossil fuel in power generation. Furthermore, the uncertainty in power generation through renewables may propel the demand for DRMS in the country.

Key Market Trends

Automated Demand Response System to Grow at the Fastest Rate

  • Industrial demand response is a dynamic energy infrastructure management program designed to support the stability of the electricity grid, as well as meet the globally growing demand for energy with the assistance of large and very large energy users in both the industrial and commercial sectors who agree to switch off certain production processes or turn down certain electrical loads during periods of peak demand.
  • Demand-side management is the need of the hour for any grid. With a rise in smart grid technologies and automated demand response system, DRMS is a key demand-side management strategy that is expected to provide a cost-effective alternative to traditional supply-side solutions, to address the growing electricity demand during times of peak load or when prices are high.
  • Therefore, the Middle-East and African demand response management systems market is expected to grow due to the ability of the automated demand response system to control the electricity consumption, allowing customers to automatically manage energy consumption at times of peak demand.

United Arab Emirates to Dominate the Market

  • The market for demand response management systems in the Middle-East and African region is expected to witness significant growth, majorly in the United Arab Emirates, during the forecast period.
  • The United Arab Emirates has 7% of the global proven oil reserves, i.e., about 105 billion barrel, and 73 trillion cubic feet of conventional gas.
  • The country is majorly powered by natural gas-fired power plants. In 2018, about 98% of electricity was generated by natural gas-fired plants. Moreover, in the same year, the share of oil and natural gas in primary energy consumption was staggering at 98.87%. However, the country has committed to producing at least 7% of its total power generation from renewable sources by 2020 and 25% by 2030.
  • The peak electricity demand has been increasing on account of high disposable incomes, hot summers, and widespread use of electrical appliances in the country. The country has experienced shortages in power availability due to the rapid economic growth, a situation that has ebbed in recent years. To manage this mismatch in electricity demand and supply, large customers were instructed to undertake administratively rationed, uncompensated load reductions to reduce peak demand.
  • In addition, the country has focused on developing world-class power infrastructure to become a power exporter to other GCC nations. DRMS has a potential to aid the United Arab Emirates in optimizing its consumption and improving the efficiency of allocating the unused energy to export.
  • The country has focused on massive capacity addition in the power sector, by developing nuclear and solar power plants. It is likely to become the first MENA country to produce solar power on such a large scale. Supported by an increase in the capacity and the integration of renewable in the energy mix, the market outlook for DRMS is estimated to be positive over the coming years.
  • Additionally, in October 2019, DEWA renewed its collaboration with Honeywell to install 250,000 additional smart meters across Dubai, bringing the total number of Honeywell smart meters installed as part of ’Smart Applications via Smart Grid and Meters’ initiative to approximately 1 million. The goverment introduced regulating policies to lower down the demand and increase efficiency of the power grid through DRMS.
  • Therefore, factors, such as increasing efforts to modernize the power sector across the country, investments, and government policies, are expected to drive the market studied, during the forecast period.

Competitive Landscape

The Middle-East and African demand response management systems market is moderately fragmented due to many companies operating in the industry. The key players in this market include Schneider Electric Inc., Siemens, Hitachi Ltd, Mitsubishi Electric Corporation, GE Energy, and ABB (Ventyx).

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