It's not overly dramatic to say that if we don't take the necessary steps now to reduce, or even eliminate, our dependence on carbon, future generations will live on an earth that looks dramatically different than the one we inhabit today. The United Nation's Intergovernmental Panel on Climate Change (IPCC) report in August made it clear that as a global society we are not doing enough to curb greenhouse gas pollution. Look no further than the record flooding, wildfires, and droughts over the past year as evidence of the climate change fallout.
The utility industry, which has been pinned as part of the problem, is working hard to become a large part of the solution. Energy providers across the country have set forth bold plans to eliminate carbon from their energy production in the next 25-30 years. In fact, 78% of US consumers are now served by utilities with carbon or emissions reduction/elimination goals.
So how do these utilities eliminate what was once the foundation of energy production – carbon? Without question, it will take large, capital-intensive projects around generation and grid modernization. But while these initiatives are critical to carbon reduction and elimination, they represent the long game in this fight. So, while we need to start executing on these initiatives, our climate urgency demands we act to reduce emissions today, not just years from now. Could utility customers be the answer?
Consumer action essential to GHG reductions
A new report by The Brattle Group and Oracle Utilities found that by 2040, actions by utility customers can reduce nearly two times more greenhouse gas (GHG) emissions than would result from current policies to promote investments in clean energy supply alone. By adopting new technologies and energy efficiency to reduce energy consumption, residential utility customers can account for 534 metric tons of avoided carbon dioxide by 2040, the equivalent of retiring more than half (135) of the United States' coal plants. Think about that. More than half of coal plants gone all because of our collective actions.
Dr. Ahmad Faruqui, a principal at The Brattle Group, was recently quoted as saying, "the prevailing belief is that clean energy supply investments need to be the primary focus of decarbonization efforts. And while those investments are essential, this research clearly shows that utilities can’t overlook the power of their customers in delivering needed change. The aggregate impact of individual utility customer actions on decarbonization is not only profound – but also one of the fastest and cost-effective ways for utilities to make progress toward their climate change goals."
Conducted in early 2021, the study looked to quantify the GHG reduction impact customers can have by adopting new technologies and behaviors over the next 10-20 years. Brattle's analytical models estimated the load impact of multiple customer actions, including participating in gas and electricity efficiency programs, buying an electric vehicle, installing behind-the-meter solar, or electrifying their water and space heating. Results were calculated using regional hourly grid emissions factors, and they quantify the aggregate impact of ambitious and achievable adoption of new GHG-reducing technologies and behaviors.
Utilities leading the charge
As the above graph shows, by 2030, significant near-term emission reductions will be led by consumer gas and electric energy efficiency and the installation of rooftop solar. Utilities like Arizona Public Service are already actively engaging customers on this front.
Kerri Carnes, manager of customer technology at Arizona Public Service Co. (APS) noted, "APS recognizes the unlimited potential in partnering with customers. Our nationally recognized voluntary energy conservation programs, like APS Cool Rewards, are designed with our customers in mind and are one of the many tools we use to create a cleaner, more reliable smart grid for Arizona. By increasing access to the latest energy-saving technology and designing unique incentives that benefit participating customers, we’re building on our already 50% clean energy mix, accelerating our progress towards our bold commitment to power our state with 100% clean, carbon-free energy by 2050 and doing our part in the global effort to protect the environment."
Clearly, APS understands the power of DSM and it starts with getting customers to realize that when they use energy is just as important as conserving it. They saw the benefits of this approach play out over the summer of 2020. Despite a record heat wave (145 days at or above 100 degrees in Phoenix) and a lot more people home because of COVID-19, APS didn't have to call any rolling blackouts. Innovative rate designs and demand response programs were critical to shifting usage, but those programs likely would have struggled to gain traction had APS not previously engaged customers with personalized insights on ways to save energy.
By 2040, the report adds that electric vehicle adoption and the move to more efficient electric space and water heating will play more heavily in the mix. For electric vehicles, the increased contribution to carbon reduction will come in large part due to the industry expecting a 4X increase in the total number of electric vehicles on the road from 2030 to 2040, as well as anticipated declines in grid emissions. Utilities such as National Grid are already factoring in these developments.
As National Grid US president Badar Khan notes, "The cheapest kilowatt hour is the one that you don't consume, and the lowest emitting kilowatt hour is the one that you don't emit." The utility has long worked together with customers to lower their energy use and bills while also reducing demand on the grid. Like APS, National Grid is actively working to provide customers with the information and tools necessary to flex their energy use to off-peak hours. Recognizing the role of electrification, they are also making it easier for customers to electrify things like transportation and heating.
But these things won't happen without providing a pathway for customers. National Grid is working to make it easier for customers to participate in energy efficiency programs, access EV charging, and respond to a set of price signals or incentives that capture and create value from distributed resources. To drive these behavior changes, they are educating, experimenting, and ensuring all customers can participate.
For all the discussion around carbon-abatement policies and efforts, as we head into the United Nations Climate Change Conference (or COP26), no doubt "where do we go next" will be at the top of the agenda. The agency's Climate office recently reported that despite formal commitments made by countries signed up to the Paris accord, emissions in 2030 could be 16% higher than in 2010. This statistic is a stark reminder that more must be done to turn the tides on this carbon emission trajectory and fast.
When engaged proactively – consumers are willing and even eager to do their part. There is no denying the impact of customer action on achieving decarbonization targets, which should elevate the role of demand side management innovation to the top of every utility’s agenda. We simply don’t have time to wait and must use all the resources at our disposal to deliver needed progress in the climate change fight. We need clean infrastructure and customer action, and we need them at scale, right now.
