This commentary originally appeared on EDF's Energy Exchange blog.
If you have been following our Texas Energy Crunch campaign over the last year, you know that demand response (DR) can play a pivotal role in meeting Texas’ energy needs without relying on dirty, inefficient fossil fuels that pollute our air and consume much-needed water. Simply put, demand response rewards those who reduce electricity use during peak (high energy demand) times, resulting in more money in peoples’ pockets, a more stable and reliable electric grid and less harmful pollution from fossil fuel-fired power plants.
That said, fully harnessing DR in Texas homes has been a bit of a challenge, despite the high electricity prices that result from the scorching summer temperatures. To understand the issue, it’s important to look at the obstacles emerging technologies often face. I highlight some of these obstacles in a recent EDF Voices blog and will be diving deeper in future posts. Namely, the infrastructure to fully enable residential DR adoption isn’t in place, yet.
More smart meters have been deployed in Texas than any other state, but the other half of the equation – the customer-facing devices – has not been adopted with as much zest. As it stands, utilities mainly benefit from smart meters, while customers wait for home energy management (HEM) devices. These devices will empower customers by enabling them to control their use energy and reduce electricity costs. HEM devices will also account for customer’s energy conservation efforts and reward them accordingly. There are still many unanswered questions about how HEM systems can really take off, but some Texas electric utilities are leading the charge with pilot projects.
Earlier this year, Austin Energy (AE) launched Power Partners, using Nest learning thermostats and other brands, such as Ecobee, Filtrete, etc. These smart thermostats allow AE to cycle off air conditioning units, with the owner’s permission, when the power grid is particularly strained during peak times. AE hopes the project will “help the community lower summer power demands, prevent power outages and delay the need to build new power plants.” To top it all off, customers received an $85 rebate per thermostat for participating.
Nest refers to its AE partnership as “Rush Hour Rewards,” which introduces an interesting analogy to help explain demand response: “Rush Hours will occur sometime between 2-7 pm, usually from 4-6 pm, and only on weekdays. You'll only get one rush hour a day, and rush hours won't happen more than three days in a row.” Of course, the home owner always has the chance to override the Rush Hour request. Furthermore, the Nest community forum and blog allows customers to ask questions, share stories and offer advice, allowing for Nest to listen and improve its product.
So far the program has been a success. On June 27th temperatures in Austin soared to a blazing 103°F, pushing the power grid to its limits. Nest thermostats lowered AC runtime during the hottest part of the day by 56%, on average. Before the Rush Hour event, Nest pre-cooled many of the homes and let temperatures rise slowly by less than 1.6°F on average. This not only prevented the onset of a potential blackout, but prevented a lot of dirty coal from being burned to meet the rising energy demand.
Was AE successful?
Yes! Only one out of every ten participants adjusted the thermostat highlighting the ultimate control that the consumer maintains at all times. The following day, when temperatures reached 106°F, AE signaled another event. Rush Hour Rewards lowered AC use by 49%, on average, and only 12% of participants adjusted their thermostats settings. These results show that when customers have the right tools at hand and are given the option to capture energy savings, they are all for it. As HEM systems become more readily available, utilities will see an empowered customer base eager to earn money through energy conservation.
According to Fred Yebra, Austin Energy Director of Energy Efficiency Services, “as the rapid pace of new technology continues to advance using smart phones and other smart devices, Austin Energy will provide new programs and incentives to increase convenience, comfort and savings for our customers.”
As the smart grid, or the “energy internet” advances, it will become increasingly important for electric utilities to keep pace with innovation. We applaud Austin Energy, Nest, and the other companies for sparking the momentum in Texas. Their leadership helps raise the bar for other electric utilities seeking to modernize their outdated, analog energy systems.
Innovative approaches, such as AE and Nest’s ‘Rush Hour Rewards, allow consumers and utilities to become partners – producing and reducing power together. This will help advance the technological investments needed to promote energy conservation and accelerate the transition to a clean energy economy.