Sustainability advocate Rocky Mountain Institute contends that “flexiwatts” may be the affordable middle ground needed for customers who want lower bills and utilities that need to balance power generation costs against falling demand.
In its latest report, “The Economics of Demand Flexibility,” RMI argues that electric loads which can be shifted in time—the aforementioned flexiwatts—also can help both consumers and producers deal with this perplexing challenge of needed grid infrastructure investment and yet slowing electricity sales growth due to efficiency innovations.
The technology already is here. The RMI report’s authors estimated that some 65 million U.S. customers have access to voluntary opt-in rate structures while residential customers alone could cut their bills from 10 to 40 percent using current rates and technologies.
“It’s very economical,” RMI author Jamie Mandel said in an interview with ELP.com. The report, he noted, looked at four “fairly simple” technologies: Smart thermostats, water heater control and command switches, dryer timers and, for electric plug-in vehicles, timers on the EV charger.
“We modeled this on (the average customer) only using two or three of these things, at a cost of $400 to $500, that there could be a 10 percent to 40 percent cost reduction in electricity bills,” Mandel said.
Demand flexibility uses communication and control technology to shift electricity shift across hours of the day. These automatic controls can reshape a customer’s demand profile in “ways that either are invisible to or minimally affect the customer, and by leveraging more granular rate that monetize demand flexibility’s capability to reduce costs for both customers and the grid,” according to the RMI report’s executive summary.
Electric utilities in the U.S. may spend about $1 trillion on generation, transmission and distribution components of the grid over the next 15 years, according to the report. However, some projections show electricity sales growth at less than 1 percent per year.
Using available control technologies could eliminate the need for about $13 billion per year in grid expenditures, according to the study. It also opens up growth potential for third-party producers that make smart meters and control systems.
Utilities can benefit from shifting flexibility options from the traditional supply side to the demand side, the report’s authors predicted. And end users can gain their own sense of control.
“Imagine if you as a customer opt into one of these special rates,” RMI author Jesse Morris said. “You could have total control over when or when not to use” the home appliances.
Boulder, Colorado-based Rocky Mountain Institute was founded in 1982. The non-profit is focused on finding market-based solutions to efficiency and renewable energy challenges.
Go to www.rmi.org for more on the report.