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demand response

5 Energy Trends that will Change the Balance of Power

We no longer fret over taxes on tea, but there’s another American Revolution forming in our great nation today. Like the colonist uprising 241 years ago, it’s fueled by a need to stand up against an outdated system that threatens our way of life.

It’s a battle over the future of American energy and our antiquated electric grid. And it centers around the way consumers, utilities, and investors interact with this vast network of powerlines, substations, and plants.

As Cheryl Roberto, who leads Environmental Defense Fund’s Clean Energy program, notes, “The U.S. is poised to spend around $2 trillion over the next two decades replacing our outdated electric infrastructure.”

That’s a lot of coin and a tremendous opportunity.

We’ve detected five emerging trends that may forever change how we produce and consume electricity. It will be an American approach to energy that wastes less, pollutes less, and, as Cheryl likes to say, “puts customers in the driver’s seat.”

It’s made by, and for, you and me.

Trend #1: Utilities think quality, not quantity

Power companies, like people, respond to incentives. The current regulatory framework in the United States incentivizes utilities to invest more in power stations and infrastructure than in building value for consumers and the environment.

If they are to survive the Revolution, utilities need to re-think the model, and the regulatory framework needs to change to support utility investments in renewable energy and energy savings. It sounds daunting, but it’s already happening in New York State.

Trend #2: Clean energy finance takes hold

While rooftop solar panels are becoming more common, securing financing for these and other energy investments and retrofits can be tough. Clean energy is more than a way for homes and businesses to lower bills and protect the environment; these upgrades also represent a serious investment opportunity.

Today, states are beginning to connect investors with programs such as on-bill repayment for large and small residential projects. Commercial properties are getting in on energy efficiency, too, thanks to the Investor Confidence Project which brings standardization and quantifiable metrics to energy efficiency projects in the commercial building sector.

The result: lower operating costs, higher market value, and a significantly lower carbon footprint.

Trend #3: Everyone gets a stake in the grid

Going back to incentives, energy-savings programs like demand response help consumers adjust their power consumption during peak times by offering a financial reward for doing so. By empowering consumers (forgive the pun) we can use resources far more effectively and efficiently.

Distributed energy is a related concept, calling on smaller-scale clean energy resources such as energy efficiency, energy storage, and local, on-site generation to complement traditional sources. California is at the forefront in this area.

Trend #4: Vastly improved batteries open new doors

Rapid advancements in battery technology are making batteries a surprisingly disruptive – for the better – force in the modern American Revolution. EDF’s Midwest Clean Energy Director Dick Munson reports that improved batteries could put renewable energy sources in the lead.

“When the wind stops blowing or the sun goes behind a cloud, batteries are able to provide back-up power until those resources are back online,” he writes.

Until recently, battery cost was prohibitive, with systems costing as much as $1,500 per kilowatt hour. Today the average is between $500 and $700, and dropping. Bonus: Someone has to build these batteries, and that means jobs. Just ask North Carolina and Illinois.

Trend #5: Coming: Federal policies to support it all

All of these trends are independently worthwhile, but the Clean Power Plan may be the glue that binds them all together. In addition to putting the first-ever limits on power plant emissions, the plan offers states impressive freedom to choose how to meet their emissions goals, and the trends above will play out as states exercise that freedom.

Freedom is the hallmark of any true American Revolution, after all. As is our quest for a stronger, better, and more innovative nation.

To take a page from the classic 1980s cartoon He-Man: Americans can be masters of our energy universe. We…have…the power!

Article by Dan Upham, Editor, Environmental Defense Fund Energy Exchange Blog.

11/05/2014 0 comment

Energy Efficiency

Utilities See Distributed Generation Coming; Energy Efficiency Working

written by Elisa Wood

Once upon a time when a big power plant retired, it was replaced by one as big or bigger. But not anymore. Energy efficiency is increasingly reducing the need for more power. And when it is needed, distributed generation may be enough.

That’s how utilities increasingly view the market, according to this year’s Strategic Directions: U.S. Electric Industry report issued August 12 by Black & Veatch.

The report is based on a survey of 576 utility leaders from May 7 to May 27.

As coal and nuclear plants retire, utilities find it less necessary to replace them with the same number of megawatts because of increased levels of energy efficiency, according to the survey. Instead, utilities can turn to solar and other smaller generators.

“Our system was built around the notion of central generation, transmission, distribution. But now with renewables and more self-generation, we are going to have to integrate those into the grid,” said Dean Osvig, president and CEO of B&V Energy. “What that means for the traditional utility is that they are going to have to make their money more on a capacity basis and less so on an energy sales basis.”

Over half the respondents said they are considering new generation, according to the results. But flat demand and a slow economy make it difficult for them to move forward.

“Many of utilities are putting off the large investments that they need to make until they can carefully analyze these scenarios with regard to demand growth and environmental regulations,” said Ann Donnelly, director at Black & Veatch. “More than ever, electric utilities need to carefully consider distributed generation and the role it may play in actually fulfilling customer electricity requirements.”

In a finding that may bode well for microgrids, reliability was the number one issue of utility concern among 10 listed. Others were environmental regulation, economic regulation, cybersecurity, natural gas prices, long-term investment, aging infrastructure, physical security, natural gas fuel supply reliability and fuel policy.

The report also found that emerging technologies, such as demand response, data analytics and advanced metering, provide more opportunity than challenges for utilities. Over 40 percent of the utilities surveyed said they have advanced data analytics programs is place, and more than 38 percent have advanced meters. More than 27 percent are using programmable thermostats for demand response programs; 26.5 percent have direct load control for home area networks; and almost 16 percent have in-home displays.

The full report is available for download here.

08/14/2014 2 comments

Renewable Energy

Central Texas Poised To Become Regional Clean Energy Leader

written by Marita Mirzatuny

With the recent release of the National Climate Assessment, the threat of climate change has never been clearer. Addressing this will require a fundamental transition away from fossil-fuel sources of energy in favor of renewable energy technologies like wind and solar power. Electric utilities vary in their progress towards delivering a future powered by clean energy. Notably, Central Texas, with its combination of energy know-how, creative thinking, and technology entrepreneurship, is home to many utilities leading the way in clean energy resources and smart grid technology.

Austin & San Antonio are leading the pack

Although Texas has a deregulated, competitive electricity market where most energy companies compete for customers, the San Antonio-Austin-Hill Country corridor is mainly comprised of public electric utilities, like municipals and cooperatives that are community-owned. For years, Austin and San Antonio’s municipal utilities have benefited from an engaged customer base that cares about the transition to a clean energy economy.

The City of Austin passed its landmark Austin Climate Protection Plan in 2007, well ahead of most other utilities. The plan calls for 35 percent of Austin Energy’s electricity generation to come from renewable sources by 2020. Austin Energy’s forward-looking policies have made them a leader in clean energy. Recently, Austin Energy unveiled its largest downtown solar array ever, and made national news by purchasing 150 megawatts of utility-scale solar power at an unprecedentedly low price.

The City of San Antonio’s CPS Energy is another Central Texas clean energy leader. The utility already has nearly 90 megawatts of solar generation online – enough to power over 14,700 homes – and is constructing another 400 MW of solar power, which will catapult Texas into the top five solar-producing states.

Furthermore, CPS is a long-time investor in the smart grid technologies needed to maximize renewable energy. Ten years ago, CPS worked with Honeywell to implement a residential demand response program for its customers. Demand response is an invaluable component of the smart grid that relies on people, not power plants, to meet electricity demand. Through this innovative tool, utilities reward people or businesses who use less electricity during times of high energy demand. This prevents utilities from having to turn on ‘peaker power plants,’ which only operate for a few hours each year and emit tons of harmful air pollution. Since 2004, 81,000 homeowners have signed up for CPS’s residential demand response program. Recently, CPS announced it would work with Honeywell to expand its demand response program to commercial and industrial customers. Already, their demand response program averts up to 130 megawatts of electricity. By 2020, CPS hopes to grow that number to 771 megawatts—nearly the capacity of an entire coal power plant.

Rural electric co-ops are as advanced as ever

While San Antonio and Austin lead the way on the municipal utility front, rural electric cooperatives, Pedernales and Bluebonnet are keeping pace. Central Texas electric cooperatives (co-ops) have benefited from a strong community of customer-owners. These electric utilities are serving as models for the nation by transitioning to renewable energy resources and implementing technologies that improve customer service and reduce electricity bills.

Despite having limited resources and rural obstacles, co-ops still take on leadership roles and, in fact, co-ops lead the nation in smart meters and demand response. Co-ops are deploying infrastructure for their customers/owners so they can be integrated with smart appliances, thermostats, rooftop solar, and other technologies that allow rural communities to be self-reliant and resilient. This is a good hedge when you’re miles away from nowhere, but cooperatives still need to be further enabled by better policy and more investment.

Bluebonnet was one of the first electric utilities to provide comprehensive electricity use data to their customers by installing thousands of smart electric meters. Bluebonnet’s innovative web portal uses smart meter data to show customers exactly when they use the most energy and how much it costs them—empowering customers to reduce both their energy use and their electricity bill. Similarly, Pedernales Electric Cooperative’s uses smart meters to provide daily energy reports to customers through its MyUse Energy Analyzer.

With clean energy, comes tremendous growth

Not only do Austin and San Antonio have rich culture, nightlife, and charm, but their economies are booming. Austin is ranked at the top of many desirable lists, including the number one economy in the U.S., and has “enjoyed double-digit growth in GDP, jobs, population and birthrate since 2007.” San Antonio, not to be outdone, ranks as the number two city in Texas for economic momentum. CPS Energy, under CEO Doyle Beneby, has used its buying power to lure corporate relocations and investments from renewable energy companies, including KACO and OCI Solar, the developer of San Antonio’s massive solar project that pledged to create 800 jobs.

To further enable Texas’ clean energy ecosystem is CleanTX, a non-profit organization focusing on Central Texas’ clean energy innovators. Through its efforts, CleanTX is able to foster a community of entrepreneurship that will catalyze innovation for utilities and municipalities.

As you drive between these two cities through the rolling Hill Country covered in prickly pears and centuries-old oak trees, it is comforting to know that city leaders are making the right decisions to advance energy resources that preserve this vast landscape (home to one endangered songbird EDF works to protect, the golden-cheeked warbler). As the price of renewable energy steadily decreases and smart grid technologies develop, Texas needs to remain steadfast in removing the barriers that inhibit this growth, lest we fail to transition away from climate-disturbing fossil-fuel energy.

Article by M arita Mirzatuny, Project Manager – EDF, appearing courtesy EDF.

05/16/2014 0 comment

Renewable Energy

Demand Response: People, not New Power Plants, are Driving the Clean Energy Future

written by Cheryl Roberto

Clean energy resources, like wind, solar, and energy efficiency, have certain key advantages over traditional, fossil fuel-based resources: they don’t require expensive, polluting fuels or large capital investment, consume little to no water, generate negligible carbon emissions, and are easily scalable. To take full advantage of low-carbon, renewable energy sources, we need a power grid with enough flexibility to harness clean energy when it is available and abundant. That’s where demand response, a people-driven solution, comes in.

On a hot summer day, for example, electricity use rapidly increases as people turn on air conditioners to avoid the heat of the late afternoon. A decade ago, the grid operator’s only option is to turn on another fossil fuel power plant to meet the increased need for electricity. But, at any given time, there are thousands of light switches left on, idle water heaters, cycling swimming pool pumps, and forgotten thermostats that people could temporarily turn off or down, if only they were offered the right incentive. If asked, people can adjust their power usage in exchange for a financial reward. We call this “demand response,” and it is increasingly helping to balance the flow of electricity with our energy needs at a given moment.

Demand response diverts money that would generally go to a fossil fuel power plant to homeowners and businesses instead. In this scenario, a utility or demand response provider sends a message for participants to reduce electricity use at key times in exchange for a credit or rebate on their utility bill, in addition to the cost savings they will earn through conservation. Of course, participants always have the option to opt-out with the tap of a button on their smart phone or thermostat.

While demand response might sound unconventional, it is actually a traditional, common-sense economic idea that has not been adequately applied within the electricity sector. In any market, customers are often encouraged to tweak their behaviors in return for a potential reward. When was the last time you were asked to give up your seat on a flight after the airline overbooked the plane? The airlines either offer money or a free plane ticket if you take a later flight.

Demand response can do the same thing for electricity, incentivizing more energy use when inexpensive, carbon-free renewable energy is abundant, and discouraging non-essential energy use when an additional, fossil-fueled power plant may need to be turned on.

Best of all, demand response is more affordable than constructing new power plants. As utilities invest around two trillion dollars over the next two decades to modernize our century-old electric grid, technology and people will play a larger role in deciding how power is produced and used.

Demand response adds a people-driven dynamic to the power grid, transforming our electricity system from a one-way, centralized power network in which customers passively receive electricity, to a more localized, two-way flow of power and information where both parties gain. Plus, we will all benefit from enhanced reliability on the power grid, as well as curbing energy use during the hottest and coldest months, offsetting the need for expensive, inefficient, and dirty ‘peaker’ plants generally only used to generate power several dozen hours per year during these periods of extreme weather.

If we are going to meet the challenge of climate change, we will have to accelerate the shift to a clean energy economy with innovative, user-friendly technology that puts people in the driver’s seat. Demand response is good for people, businesses, and the environment, and will unlock a future that relies on the intelligent, resilient, and clean energy solutions. Let’s put it to work for us.

04/24/2014 0 comment

Renewable Energy

Where’s the Real Utility Leadership?

written by Walter Wang

Yesterday, the utility trade association EEI and NRDC released a Joint Statement to State Utility Regulators that has created some attention for being a purported “kumbaya” moment in the debate around rates and net metering in our increasingly solar powered electricity landscape. While we appreciate efforts to move the debate forward, it’s

02/17/2014 0 comment

Renewable Energy

Demand Response Programs Saved Crucial Electricity During Heat Wave

written by Yale Environment 360

As electricity producers struggled to supply power during last week’s heat wave along the U.S. East Coast, so-called “demand response” programs — which enable power companies to remotely reduce power usage in participating businesses and homes — were vital in avoiding blackouts, utility officials said.

07/23/2013 0 comment

Energy Efficiency Renewable Energy

Solar Scoreboard – Halftime Update

written by Walter Wang

With the year nearly half done, here’s the solar scoreboard–updates from things we’ve been working on, and a selection of other notable solar victories.

New state solar programs

New York is our biggest market-building campaign in the East. Last month the Senate unanimously

05/14/2013 0 comment

Renewable Energy

Ron Wyden – Making Smart Grid a Reality in the U.S.

written by Walter Wang

Here’s some good news: U.S. Senate Energy and Natural Resources Chairman Ron Wyden is a huge supporter of smart grid. In fact, he recently promised to do everything he can to move the government’s “clumsy … machinery” to make the U.S. electric grid a smart grid.

03/26/2013 0 comment

Renewable Energy

Using Renewables to Serve Local Capacity Requirements

written by Walter Wang

On January 24, the California Public Utitlies Commission will vote on an important precedent for using renewables to enhance grid reliability.

Grid reliability requires that there be a certain amount of local generation–known in wonkspeak as ‘local capacity requirements’, or LCR.

01/21/2013 0 comment

Energy Efficiency

Energy Efficiency: Big Deals and New Ideas

written by Walter Wang

The economic premise behind energy efficiency – that it’s cheaper to save a unit of energy than to make one – has caught on in the US. Energy efficiency spending is up, and our energy use is declining, measured both per capita and per dollar of gross domestic product, according to government figures.

So it is not surprising to see the year begin with

01/10/2013 0 comment

Renewable Energy

Gauging the Real Integration Costs of Renewables

written by Walter Wang

The success record of smart grid renewables integration is a mixed bag, with European countries boldly plowing forward while many utilities in the United States exhibit what a former California state regulator called “electrotrophobia” – the fear of change linked to greater reliance upon intermittent renewable energy resources.

04/06/2012 0 comment

Energy Efficiency

Will Cyber-Sensitivities Reveal the Future of Energy Efficiency

written by Walter Wang

The US economy is three times larger than China’s, yet when it comes to developing a clean energy industry, China keeps besting us. The US came in second – again – to China this quarter in Ernst & Young’s much-watched renewable energy ranking released February 28.

03/01/2012 0 comment

Energy Efficiency Green Building

In Smart Buildings, Co-opetition is on the Rise

written by Walter Wang

The building equipment and services industries have always been highly fragmented. While leaders such as Honeywell and Johnson Controls have large, multinational presences, most of the market is divvied up among thousands of smaller companies with a relatively narrow regional or technological focus. Even CB Richard Ellis, the real estate firm with

02/07/2012 0 comment

Energy Efficiency Green Building

Less Energy, More Efficiency

written by Walter Wang

Are we entering a new era of energy efficiency?

That’s what economists Ahmad Faruqui and Doug Mitarotonda of The Brattle Group have told Smart Grid News as a preview of their new white paper. They predict that electricity demand in the United States will fall between 5 to 15 per cent by 2020.

09/20/2011 0 comment

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