Extreme weather. Drought. Massive fires in California. The effects of climate change are on the rise and California is front and center. But in light of the U.S. National Climate Assessment Report that came out at the end of 2018, everyone is asking – what can we do as individuals?
Climate change has been a remarkably difficult challenge for people because the psychology is so different from what we've evolved to cope with as threats. We respond to immediate threats and to threats with a face. Climate change is just too diffuse, too slow and too large – it covers the whole world. It’s like fighting with air.
Since governments haven’t done a great deal - global carbon emissions are still increasing - perhaps private industry can facilitate people stepping in themselves.
There are many companies that are trying to figure out how to do just that. Some are well-known and established, like Lockheed and Tesla, or brand new ones, like Beyond Meat that had a recent IPO filing or Impossible Foods, both as a way to decrease the large emissions from America’s obsession with eating meat. Airbus designed its A380 passenger aircraft to be the most ecofriendly in the industry.
For the energy sector, there are two end members to addressing climate change:
– replace fossil fuels with non-fossil fuels
– become more efficient and conserve energy as much as possible
The first strategy seems to be undermined by the fact that we have more fossil fuels than ever before and it’s gotten even cheaper to get them out of the ground. Our carbon emissions began climbing again after a 25-year low in 2015.This Administration has also decided they don’t care about climate change, so are no help there.
The second strategy is where companies like OhmConnect come in – increasing efficiency, emplacing a smart grid, and balancing the grid overall to make the most out of the growing chunk of renewables. It was founded in 2014 in California to take advantage of their huge build-out of solar energy and the necessity for smart usage strategies.
But it’s now spreading to markets like Texas and Toronto.
This is possible because California’s state energy authority prefers to pay people to save energy instead of paying power plants to produce more. The huge amount of solar that the state has installed is causing some major issues with their grid and with reliability. The state’s commitment to achieving 100% clean energy use in the coming decades will not be possible without some clever strategies and without everyone being on board.
So incentivizing people to act locally is essential. OhmConnect does this by enabling hundreds of thousands of energy customers to earn weekly payments for timely, smarter, home energy use when it’s cleanest (non-fossil) and reward them for not using energy when it’s dirty (fossil).
Anyone who uses any of the three major California energy suppliers -- Pacific Gas and Electric (PG&E), Southern California Edison and San Diego Gas & Electric -- can sign up for free.
Coordinated through smart meter data, the service encourages households and small businesses – owners and renters – to take specifically targeted OhmHours without energy use, enabling individual users to move as a coordinated group to balance the grid in real time. This removes the need for inefficient or dirty fossil power plants to fire up intermittently.
OhmConnect contacts the user when power from fossil plants are dominating the grid. The user can manually or automatically reduce their energy use, e.g., not charge their electric vehicle, don’t wash their clothes, turn off their water heater for a few hours. Many users have connected their smart home devices to OhmConnect, including wifi thermostats, electric vehicles, and smart plugs, in order to automate their participation.
The users are paid with cash for saving energy during those peak times, and the reductions are sold into the grid.
That’s a strong driver.
The grid generates just enough power to meet the demand of all its users. Every user on the grid has a forecasted consumption profile, which is calculated by averaging their energy consumption during the previous 10 similar days on an hourly basis. For instance, a user’s forecast for 5 to 6 PM on a Tuesday would be calculated by averaging their energy use from 5 to 6 PM on Monday, Friday, Thursday, Wednesday, etc.
For the weekends, the previous 4 weekend days are used to forecast use.
Occasionally, the sum total of these baselines doesn’t give a complete picture of expected demand and additional power plants need to fire up. Turning these marginal power plants on is expensive and can increase the wholesale cost of energy from four cents to a dollar per kWh. These power plants are called peaker plants and typically emit two to three times the CO2 emissions as other power plants using the same fuel.
The social cost, both economic and environmental, is lower to pay users to reduce their usage instead of paying a dirty power plant to fire up to meet unforecasted demand.
That’s how Ohmconnect works. The energy savings are purchased in the California ISO, just as a power plant’s electricity generation would be purchased.
When a user signs up for OhmConnect, they connect their utility account, so we can have access to their smart meter data. Users are then paid for the participation, depending upon how much energy they individually save.
During the company’s recent summer challenge campaign, for example, when temperatures in the state were at their highest, OhmConnect paid customers $2.5 million for their energy saving tactics, with users saving a total of 500,000 kWhs of power in the three month period.
The U.S. Market certainly justifies this strategy - 140 million homes, 80 million smart meters, 28 million Connected Energy Devices (smart thermostats, smart plus, etc.) – totaling about $500 billion. Worldwide it could total over $2 trillion.
But it’s this magnitude of effort that’s needed to address such a global issue.
