There’s a Revolution Coming in Electricity. Besides Solar, I Mean…

August 28, 2015

A revolution within a revolution – the internet of things meets household appliances.

Washington Post:

..on Wednesday the Rocky Mountain Institute, a noted energy think tank, released a new report suggesting that there’s a less noticed change under way in how we use energy at home — and pay for it — that could have similarly dramatic potential.

The institute calls it “demand flexibility” or the potentially catchier “flexiwatts.” Both terms refer to the growing ability, through the use of a variety of timers and controls, for homeowners to determine precisely when during the day (or night) their home’s energy hogs – like, say, the hot water heater or the electric car charger – draw their power.

Why does the timing matter? Because it allows you to take advantage of increasingly prevalent time-based electricity pricing schemes, in which your power company charges you more for using electricity at peak hours and less at times when there’s less demand, like the middle of the night. The Chicago-based utility ComEd, for instance, offers a program in which prices change hourly, based on demand, and customers receive alerts about what they’ll be.

So if you match up when you’re using the most power with when power costs the least…well, the result is obvious. Moreover, this trend also helps out utilities and the grid itself. If there is less electricity demand at peak times, then that obviates the need for a number of investments and costs, including as many so-called peaker plants, which kick on when demand escalates.

Rocky Mountain Institute:

Electric utilities typically focus on supply-side solutions to meet peak demand, balance electric loads, and meet customer needs. Demand profiles are assumed to be static, and the grid must be built to meet that load profile. This approach to building a grid is expensive. The grid will need an estimated $1.5 trillion in investment between now and 2030, largely to meet forecasts for ongoing generation, transmission, and distribution needs. That translates to $50–80 billion dollars every year.

But a much cheaper approach is to make not just supply but also demand highly flexible and responsive to price signals. In a new report released today, The Economics of Demand Flexibility, we show how simple, Internet-connected technologies like smart thermostats to control AC, dryer timers, grid-interactive water heaters, and smart EV charging can drive out 10–20% of those anticipated grid investments, while simultaneously saving customers 10–40% on their electricity bills.

This approach, termed demand flexibility (DF), relies on more-granular electricity rates such as time-varying pricing and residential demand charges that exist today as opt-in choices for 65 million customers, and simple technologies—costing only a few hundred dollars—that can help customers automatically respond to these price signals.

The enormous potential of “flexiwatts”

Just as a “negawatt” refers to power not used, “flexiwatts” can be thought of as power demand that is shifted in time across the hours of a day and night to reduce costs. And just as demand-side negawatts are much cheaper than supply-side watts of generation to meet electricity, we show that flexiwatts are a much cheaper way to meet capacity needs than supply-side solutions.

In our recently released report, we quantify the value of flexiwatts for both the grid and for individual customers, by examining its potential to 1) reduce peak demand, 2) shift load to lower-price times, and 3) help integrate renewable energy (e.g., customer-sited solar PV) onto the grid.

Key findings

Deployed at scale, DF in the residential sector alone can reduce grid costs by $13 billion per year.

By controlling the timing of just two common residential appliances (air conditioners and electric water heaters), U.S. peak demand can be reduced by 8 percent, reducing required infrastructure investment costs by 10–15 percent through 2030.

One Response to “There’s a Revolution Coming in Electricity. Besides Solar, I Mean…”


  1. My wife’s been making such energy-saving time shifts for years. The dish washer containing the days washing-up is always put on last thing at night with the timer set to delay the start for 3 hours. The washing machine goes on when the sun shines, to take advantage of our solar panels. And often she delays baking until the sun is shining, too.

    Also, we do not own a tumble (clothes) dryer: what a ludicrous energy-wasting bit of kit when the wind is blowing and the sun is shining and there’s a perfectly good clothes line out side.


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