The Electric Utility Paradox: The Most Effective Way to Create New Power Sources is to Consume Less Power

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// A statistic reported in July, 2013, in The Economist was mind-boggling: “America uses more energy for air conditioning than Africa uses for everything.” Africa has more than three times the population of the US and more than three times the land mass with the equator running right through the middle. Forgive the geography lesson but perhaps that statistic gives some sense of how much power is used just to keep people comfortable when it’s hot, and it suggests how much can be saved with more rational use. In some urban areas in the sunbelt, electric power to run air conditioning can approach 50% of total output during peak times.

Residential consumers can be careless with the thermostat. When it’s 98º outside with corresponding humidity, does a house really need to be 72º when nobody is home? Given that most home owners don’t understand that it costs more to generate power during times of peak demand, or how much energy their home is using while they are away, it is no surprise they don’t make an effort to curtail consumption or at least make it more sensible. Until recently, there was little reason to try and engage customers on that level, but the situation has changed. Utilities have to change that relationship simply as a matter of survival.

Some of the answer is technical. Air conditioning technologies have become more efficient. For commercial units, something as simple as running a chiller with a variable frequency drive can reduce overall demand and start-up surges. Sophisticated residential users may have moved to smaller multiple-unit schemes that can reduce the overall cost of cooling for a large residence. These improvements are important and should continue, but they need to be supplemented with behavioral changes.

Residential users need to understand how they can take steps to use less electricity by making more intelligent choices that are rewarded with direct cash incentives on the bill. Don’t air condition bedrooms during the day. Don’t air condition the living room at night. Raise the temperature or shut off some or all the AC for a period of time when nobody is at home. Making that sort of thing practical requires very simple technical implementations possible with a demand response or energy efficiency program. Having customers that live each day using energy sensibly is the dream of every utility, and that kind of relationship can be developed through engaging devices, such as the Wiser North America program, combined with education, attractive rate incentives, and leveraging the utility’s position of trusted energy advisor.

Sometimes utilities have to take a more direct approach when the situation is particularly severe. Customers self-managing their consumption might not be enough and more immediate intervention may be necessary. An energy management program combined with a demand response platform allows a utility to curtail energy use even further when the situation demands. The individual customer never loses control, the peak energy reductions are based on the consumers’ agreement with the utility. Some with special needs may opt out entirely. This kind of intervention is usually limited to the most severe situations and any individual customer should see minimal disruption.

Utilities that have undertaken this sort of program have developed more positive connections with customers and improved their ability to drive greater grid performance. The software provides precise control of management efforts down to selected residences. Specific areas of grid stress, even individual pole transformers, can be touched and relieved through the system. The greatest effect can be achieved with disruption to the fewest possible number of customers. That builds better relationships all around.