Beneficial Electrification: Plug In for the Greener Grid!

“Beneficial electrification,” a new catchphrase in the energy world, refers to the growing recognition that using clean electricity to keep our homes and businesses running is cheaper, greener, and a smarter way to meet our energy needs.

However, the phrase can be somewhat mystifying even to those who know it. Equally enigmatic are its alter-egos, “strategic electrification” and “efficient electrification.” But shadowy characters they are not! Let’s unveil.

To combat climate change worldwide, we must limit the increase in the average warming of the planet to well below 2 degrees Celsius above pre-industrial levels. The United States—as one of the largest emitters of greenhouse gases both historically and today—must do its part by striving to reduce emissions at least 80 percent below 1990 levels by 2050, according to the Intergovernmental Panel on Climate Change. Over the past few years we have flattened our emissions trajectory and they are in line with 1990 levels, but more is needed.

As NRDC’s recent report shows, the United States can largely achieve such reductions with bold action to increase energy efficiency, renewable energy, electrification of vehicles and buildings using clean power, and electric grid enhancements. This is where beneficial electrification comes in.

In part, beneficial electrification describes the use of electricity generated from emissions-free power generation resources (like wind and solar) to power our vehicles, buildings, equipment, and devices. It implies a transition away from dirtier resources, such as eliminating the use of gasoline in our cars or natural gas in our heaters. But there’s more to it.

A definition that resonates with me is achieving one or more of three outcomes, without adversely affecting any of them:

  1. Saving customers money over the long term from lower energy and fuel bills
  2. Reducing environmental impacts and improving public health, from reduced climate and air pollution
  3. Enhancing power grid operations and reducing associated costs via better load management, while enabling smarter integration of solar and wind power

Having common definitions and understanding of beneficial electrification is important, and such efforts are being advanced by stakeholder groups such as the Beneficial Electrification League

Jessica Russo, NRDC

Let’s look at a couple of examples.

Experts believe the installation of adequate and well-located electric charging stations at homes, highways, and workplaces will encourage greater adoption of electric vehicles (EVs). EVs have lower ownership costs over their lifecycle than gasoline-powered vehicles (soon even without subsidies), especially as gas prices tick up. Greenhouse gas emissions savings from driving EVs depends on location. Such reductions are substantial in California, as the state’s electricity is much cleaner than average due to the prevalence of renewable energy. But even where electricity is still largely produced from fossil fuels, EVs still reduce emissions, and importantly, these reductions increase over the life of the EV as the electric grid gets cleaner.

Additionally, charging EVs in environmentally and financially beneficial ways can be encouraged using well-designed electric rates, and by equipping charging stations with advanced meters that can communicate with the utility. Signals can be sent to EVs to encourage charging around midday when abundant and inexpensive solar power is available, or similarly in the middle of the night when wind power is plentiful. Cost savings are boosted for drivers, more renewable energy is put to use cost-effectively, and power grid reliability is enhanced.

This is beneficial electrification.

Another example is the installation of highly efficient electric heat pumps to heat water and occupied spaces. While gas and oil heaters have been used for decades in the U.S., heat pumps are being installed in greater numbers, particularly as the technology has improved enough to perform well in colder climates like the Northeast. Heat pumps are extremely energy-efficient because they harness the heat from the ambient air to provide warmth where required, sort of like a refrigerator or air conditioner running in reverse. This capability when powered by clean electricity makes these devices exceptional at slashing greenhouse gas emissions. Avoiding burning fossil fuels onsite also eliminates combustion exhaust from buildings, improving both indoor and urban air quality.

While there may be a higher initial cost to install them presently, depending on the location and price of the alternative heating fuel, heat pumps can be significant cost-savers over time. Recognizing this, some states are providing rebates to encourage the switch to heat pumps.  

Heat pumps also can be fitted with thermal storage and communications capabilities so that they can be responsive to grid needs, much like EVs. For instance, they can pre-heat when clean power is plentiful and use stored heat to serve customer needs while minimizing draw from the electric grid during periods of peak demand, all within parameters set by the customer.

In fact, switching to heat pumps in California is now among the highest-impact options for emissions reductions in the state. Burning natural gas in older water heaters and furnaces accounts for roughly half of all its carbon emissions from buildings. Likewise, New York can slash emissions with heat pumps (we recommend coordinated policy action). Other Northeast states are good candidates too. The Netherlands is arguably one of the most ambitious leaders on heat pumps.

Nuances

Meanwhile, not every aspect must be satisfied for an approach to qualify as beneficial electrification. Heat pumps that do not communicate with the grid still offer important benefits of cost savings and reduced emissions. Electric resistance water heaters (conceptually similar to heating coils in electric stoves) have smaller emissions-reduction benefits, but with grid-connectivity they can be transformed into a “thermal battery,” which can help with grid management.

Conversely, not all electrification is beneficial. If electric resistance water heaters are plugged into a grid dominated by coal-fired electricity, without using load management, they may increase emissions compared to gas heaters. Even an electric vehicle that consistently charges in the early evening when the grid is under strain raises costs and possibly emissions.

Aggregation

While the examples above are at the customer level, similar benefits exist or may even be amplified at the community or regional level when several devices are aggregated—operated together in a coordinated fashion. In particular, aggregation can transform grid-connected devices into largescale “flexible demand”, which can proactively or reactively help incorporate greater quantities of renewables onto the grid at lower cost by accommodating natural weather-dependent variations.

Paradigm shift

The concept of electrifying space- and water-heating in homes and offices represents something of a paradigm shift. Efficient natural gas-burning heaters were touted as the cleaner and cheaper option just a few years ago, but rapid technology advances and booming renewable energy production have made low-carbon electricity for heating and cooling the more economic, low-emissions, and advanced option. Raising awareness about the change is, unsurprisingly, both a challenge and an active area of focus for the clean energy industry.

But it’s worth it for our health, environment and pocketbook!

About the Authors

Vignesh Gowrishankar

Associate Director, Climate & Clean Energy Program

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