Wednesday, December 11, 2013

Demand Response Comes to Japan

On December 10, a JV was announced between EnerNOC, a U.S. listed company, and Marubeni, a major Japanese trading house.  The JV will provide demand response services to commercial and industrial users in Japan.  EnerNOC already has done a pilot program with Kansai Electric in 2012, and will start a new program with TEPCO via the new JV in 2013.

Some English language reports can be found here and here.

At a Massachusetts-Tokyo trade mission event in Tokyo timed to coincide with the announcement, EnerNOC CEO David Brewster indicated that commercial/industrial demand response systems have the potential to shave 10% off of Japan's peak electric energy demand.  He noted that further regulatory reform will be needed to change electricity contracts -- and provide for "dispatchable" power -- in order to reap the full benefits.

This kind of demand response technology -- that can shut down demand for literally gigawatts in seconds or minutes -- is "low hanging fruit" for Japan.   It can avoid the need for a lot of new centralized generation -- nuclear, coal or otherwise -- and can dramatically ease the implementation of renewables into the electricity grid.

Marubeni seems like an obvious partner for EnerNOC -- they have a long history of involvement with overseas power investments, they have energy trading businesses, and they are familiar with the transition to competitive electricity markets.

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