Despite the fact that the demand response sector has been facing increased consolidation and potential disruption by new technologies, market leaders are still making money, at least in the near term. This afternoon demand response grandaddy EnerNOC reported a solid third quarter, generating revenues of $162.80 million (up from $103.12 million the year earlier) and bringing in a net income of $43.87 million, almost double the net income from the same period the year before.
When it comes to the demand response market — where middle men essentially turn down buildings’ energy use to help utilities shave peak power demands — size rules and EnerNOC is one of the biggest. The company now has 5 gigawatts under management, according to this latest earnings release, up from 3.5 gigawatts in March.
However, EnerNOC did lower its full-year profit view, and now estimates that it will hit an annual profit of 91 cents to $1.01 a share. Previous estimates were 94 cents to $1.04 cents per share. Shares closed at $30.56 on Monday on the NASDAQ.
At the same time that EnerNOC is making money off of its traditional demand response business right now, it still sees the writing on the wall of the changing smart grid landscape, and has been aggressively looking to expand its business. Comverge is doing the same thing.
For example EnerNOC has acquired a series of businesses including building energy efficiency software and wireless controls as of late, markets that could be potentially much bigger than demand response. See it’s entire list of acquisitions here. While EnerNOC mainly turns off factory lines and other industrial processes today, it can also shift air conditioner loads, turn down store lights, and perform other energy efficiency-style functions — all while offering DR premiums beyond simple power bill reduction (See Demand Response As the Back Door to the Smart Grid, GigaOM Pro subscription required).
Jeff recently reported that EnerNOC has a partnership with Cisco around building management, with Cisco’s own plans to network every other part of the grid. EnerNOC also has a technology called PowerTalk that sends signals to automatically control building power loads.
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