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Energy

How Utilities are Tackling Rising Costs and Demand at the Grid Edge

Rising energy costs, natural disasters, and more extreme weather have prompted consumers to seek ways to optimize their energy consumption. Providers, faced with rising demand and an aging grid, are seeking ways to better monitor energy consumption and reduce peak usage.

The percentage of households considering electricity costs as too high increased from 54% to 62% in 2022, according to Parks Associates’ ongoing quarterly consumer survey work of 8,000 US internet households.

Energy management technology can optimize usage to reduce costs and energy waste, but integration remains a challenge. Different brands and generations of products make data aggregation difficult, limiting unified control.

Devices on the market today can measure, monitor, and control energy consumption at the device, circuit, or whole-home levels but only if they can work together. Improved coordination and integration are needed, and all parties involved stand to benefit:

Consumers seek a simple, seamless, unified experience with technology in their homes, but they will not shift from buying individual smart home devices to integrated systems overnight:

  • Retailers are working to drive device adoption (and sales)

  • Energy companies want more information on how homeowners use energy, and they need consumers to participate in energy programs with the help of home energy technology

Manufacturers have recognized this reality, and the quest for interoperability is now a more crucial factor for smart home players. Smart home companies have come together to develop standards and protocols to help their energy devices work together. This white paper examines the progress toward interoperability and highlights the ways companies across this space are working to overcome barriers to a connected and interoperable home energy experience. It highlights barriers and opportunities for connected home technologies to make optimized whole-home energy management a reality. It also discusses the benefits to energy providers, device-makers, and retailers.

Consumers, especially in middle-income households, are feeling the pinch of a rising electric bill. However, they are uncertain about what they can do to lower costs. Utilities traditionally have two types of programs to offer their customers that can shift load and reduce bills:

  • Demand Response (DR) programs are energy programs where, in exchange for incentives, the customer allows the energy provider to adjust or turn off the home’s thermostat, water heater, or pool pump when too much energy consumption is straining the electricity grid. Program names include Rush Hour, On Call, Flex Hours, Power Manager, Connected Savings, and Power Partner. These programs are typically automated and shift load away on the most constrained days.

  • Time-of-use (TOU) rates are electricity rates that vary based on the time of day that the home uses electricity. Utilities institute TOU rates to induce a behavioral shift in energy consumption, driving consumers to adjust their energy usage away from peak periods when possible.

 

 

 

 

 

 

 

 

 

 

 

 

The earliest incarnations of these programs relied on whole-home meter data to understand energy consumption patterns, with limited ability to engage customers and learn more about energy usage in the home. The advent of the smart thermostat greatly enhanced these programs and gave utilities their first step “behind the meter.” Now, with more home energy technology in the customer’s home, electricity providers have a major opportunity to manage costs and resilience with precision through programs that actively engage their consumers. The recent acquisition of Vivint by NRG is evidence that electricity providers are looking for new and better ways to understand and control energy consumption behind the meter.

This article was published first at POWERGRID International on January 8, 2024

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