New report shows "flexiwatts" are the next big opportunity for a cleaner grid and customer savings
We hear it over and over again from naysayers of renewable energy from sources like wind and solar who claim that we will experience electricity grid failure if we rely too much on solar, wind and other variable renewable energy resources when, for instance the sun goes down and the wind stops blowing. They typically go on to say that until battery storage comes down in price, we're not going to be able to go beyond a certain threshold of having more renewable energy without breaking the bank.
It's a false choice that ignores the wide and diverse assortment of measures at our disposal to make the grid cleaner, more efficient and cost less.
We are lucky here in the U.S. to have an abundance of sun and wind resources. Numerous studies over the years have shown that we can power our entire economy requiring ust a small fraction of what's available. And as solar and wind energy continue to rapidly drop in price, new policies like the EPA's Clean Power Plan take hold, and states and local governments push for more aggressive climate and clean energy goals, we now face new questions and opportunities in transitioning to a clean economy. Preparing the electricity grid for significantly more wind and solar provides a fresh opportunity to make our grid cleaner, more efficient and reliable at less cost to operate. Several strategies that my colleagues have blogged about in this manner include the importance of regional grid coordination, smart and holistic transmission planning, and smart from the start siting of renewable energy projects.
And yet there's more. In a new report released today by the Rocky Mountain Institute, The Economics of Demand Flexibility shows us how simple, Internet-connected technologies like smart thermostats, timers on clothes dryers, smart water heaters and intelligent electric vehicle charging, give consumers more choice, control and flexibility in how they use energy; can help families save money on their electric utility bills; save billions of dollars on anticipated grid investments; and help us achieve a carbon-free grid faster. In all, these new functionalities and grid services from what report authors call "flexiwatts," create quantifiable value for consumers, our electricity grid and our environment. Flexiwatts add yet another form of clean energy currency among the suite of options available to consumers and utilities:
Customers have an increasing range of choices to meet their demand for electricity beyond simply purchasing it from the grid at the time of consumption. They also now have the opportunity to generate their own electricity through distributed generation, avoid the need for electricity through energy efficiency (i.e., negawatts), or shift the timing of consumption through demand flexibility (i.e., flexiwatts). All four of these options need to be evaluated holistically in order to minimize costs for customers and the grid.
The authors say that the most effective policy tool available to fully value and incentivize these flexiwatt resources is to update decades-old rate designs that are used to assess electricity usage that customers pay via monthly electric utility bills. While we are largely aligned with these measures of evolving the rate design to more closely match electricity market and grid conditions in principle, we would add that additional policy tools should be considered as well. These include customer education, expanding the role of efficiency and demand response in delivering reliable electric utility service, and enhancing appliance efficiency standards and building codes to promote scaling up the manufacture of highly energy efficient, grid-connected appliances and buildings.
We look forward to working alongside the Rocky Mountain Institute and other allies in making sure utilities, consumers and the environment obtain the highest levels of benefit from the emergence of flexiwatt resources.