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Why Energy Efficiency is a Crucial Component of Grid Management

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Appreciating the full value of Energy Efficiency

Non-energy benefits

For years, building performance contractors have made the case that the benefits of energy efficiency measures go far beyond merely saving energy for the homeowner. Typically, the additional benefits they mention are related to comfort, health, indoor air quality, and durability. But people fail to recognize that the most important energy efficiency benefit is its role in managing loads on the distribution grid.

California's Energy Efficiency History

The modern energy efficiency movement began in the 1970s when California and other states ushered in multiple new regulations to address looming energy shortages. In 1978, California adopted its first energy efficiency standards into the building code (Title 24, parts 6, and 11). The changes included higher performance heating and cooling standards, improved building insulation requirements, high-efficacy lighting, and minimum fenestration (window) standards. California updates its building codes on a three-year cycle; this includes changes to the energy efficiency requirements.

Over the past forty years, the population in California has seen steady growth. Interestingly, the number of people in the state has grown steadily, yet our energy use per capita has remained flat. How is it possible for the population to grow, yet its energy needs remain flat? The answer is simple. For years California has responded with incremental increases in energy efficiency across multiple sectors of the economy.

Over the years, worry about supply stocks has shifted to concern about the impact burning fossil fuels has on the environment—particularly global climate change. Studies indicate that California's energy efficiency regulations have curtailed the construction of 20-25 electrical generation plants. Imagine how much carbon would be released into the atmosphere if we had 25 more fossil fuel power plants operating in the state.

While climate concerns and the push to fully decarbonize the economy remain front and center in conversations about energy efficiency, saving energy now has another goal: helping stabilize the electrical grid.

Imagine what would happen if we limited grid capacity 

The current total capacity of the electrical grid in California is roughly 50,000 megawatts (MW). Imagine a scenario where regulators placed a limit on the total grid capacity. How could we grow and still meet the energy demands? Currently, as the demand for electricity approaches full capacity, energy providers must curtail or shut off parts of the grid to prevent overloading. These events are known as brownouts. We witnessed this firsthand this summer as an unusual weather pattern pushed warm moist air over most of the state. On August 19th, 2020, record high temperatures were recorded statewide, including 130 degrees Fahrenheit in Death Valley. CAISO, the independent system operator responsible for the electrical distribution grid, was forced to shut down sections of the grid to prevent overloading. The brownouts were the first curtailment of electricity since 2001. The exact cause is debatable, but most agree it was not due to renewable generation.

Seeing the same situation developing a few days later, CAISO adopted a new strategy. The solution was simple. CAISO asked customers to implement a few simple efficiency measures, such as setting their air conditioners to 78 degrees or higher and turning off lights in unoccupied rooms. The simple act of encouraging conservation averted further disruption of service. These recent events are a real-time demonstration of the grid benefits of energy efficiency. Using the available supply of electricity more efficiently allowed us to avoid further brownouts.

The main driver of peak loads in the summer is air conditioning. When it gets hot outside, people move indoors to the comfort of air-conditioned buildings, which puts a massive strain on the electrical grid. Imagine how much different our electrical demands would be if we reduced air conditioning loads in buildings.

Even if we only reduced the loads by a small percentage, it would have significant benefits. Fortunately, it's not that hard to improve the performance of our buildings and homes. Most buildings function like the gas-guzzling cars of yesteryear. If buildings were more efficient, they would need less air conditioning. If the air conditioning loads were less, we could use smaller equipment and still be comfortable. If the equipment installed was smaller and more efficient, it would use less electricity. Smaller equipment, working more efficiently, can provide comfort while reducing the load on the grid. This multiplication of benefits is what makes energy efficiency improvements so valuable.

Electrification and population growth will add load to the grid

To slow global warming, we must transition to carbon-free energy sources. The most readily available carbon-free energy source today is electricity. At the same time, California will likely see more population growth over the next few years. That means we'll need to build new buildings for people to work and live, even as we continue to reduce greenhouse gas emissions to combat climate change.

Put together; it's easy to see how all of this will put a lot of extra stress on the electric grid. We will need more electricity to support the increased population and subsequent increase in demand. The added demand will increase as we continue to electrify transportation and buildings. If we limit the grid's total capacity, how are we going to meet this new demand? The answer is that we will have no choice but to use the existing supply more efficiently--the cheapest energy available is the energy you don't use. As the history of efficiency in California shows, it's entirely possible to meet new demands for quite some time by merely encouraging energy efficiency across multiple sectors of the economy.

There are other ways to limit loads

New technologies will only increase the value of energy efficiency. Smart homes are here; more and more devices in homes and buildings are connected to the internet every day. Imagine the potential benefits of these smart devices for the grid.

Demand response (DR) is a technique is to reduce the energy load of specific devices actively. For example, during high electrical demand periods, a third party, typically a utility, can lessen a connected device's output. DR can be used with high consumption devices, such as air conditioners, to minimize the grid load.

It turns out that most electric devices do not use their total capacity during regular operation. For example, a hairdryer commonly uses 1800 watts power. One thousand eight hundred watts is the amount of electricity it uses on high.  It can still dry your hair on low; it just takes longer. The difference between low and high could be as much as 1000 watts. That is significant when you have thousands of them operating at the same time.

Let's apply the same logic to other household appliances. Clothes dryers could be connected to the internet and use a lower temperature setting during periods of peak demand for electricity. A connected dishwasher might delay the start of its wash cycle for an hour or two to reduce its impact on the grid. Your electric water heater might be set to high during the middle of the day to take advantage of the abundance of clean energy generated by solar panels. The water will stay hot for hours, allowing you to take a hot shower in the morning from water that was heated the previous afternoon. This type of operation relies on thermal storage, which, in effect, makes your water heater a battery. Pretty cool.

And let's not forget the major source of the brownouts, air conditioning. Higher efficiency air conditioners provide comfort with less energy. Many use multiple stages to match their output to the actual load. More advanced units can infinitely adjust their capacity to the demand, creating what is known as variable capacity. It makes a ton of sense. Why operate at full capacity when you can meet the request with a fraction of the energy?

Upgrades to the building itself enhance the benefits of demand response. If a building has an effective envelope or shell, it retains heating or cooling longer. Improved insulation, tightly sealed air ducts, air sealing, and improved windows are examples of shell improvements. A tight envelope allows you to provide comfort with much less energy. Efficient buildings maintain comfort with less power.

Some DR strategies shut off your air conditioning periodically during peak load events.  A typical cycle is ten minutes off per hour of operation during periods of high demand. If the building is efficient, it can "glide" through these reductions with little to no change in comfort to the occupants. The more efficient the building, the more potential there is for DR.

Promoting the grid benefits of efficiency

We need to inform the public and promote the grid management benefits of energy efficiency. Managing the loads on the grid is a real problem. It is a problem now, and it will only increase in the future. New strategies and technologies will help manage loads, but good old-fashioned energy efficiency might be the most effective tool available. Let's start by creating super-efficient buildings. The next step is to add on-site generation and smart controls to compliment them. In the end, the grid management benefits of energy efficiency upgrades might prove to be the most crucial benefit of all.

Charley Cormany

Executive Director