Last year, Massachusetts was recognised as the nation’s most energy efficient state. The American Council for an Energy Efficiency Economy (ACEEE) says that Massachusetts' approach to efficiency "has resulted in one of the most ambitious fully-funded state savings targets, incremental electric savings targets ramping up from 2.5% to 2.6% from 2013-2015."
The state gives utilities shareholder incentives of up to 5% of programme costs for meeting certain goals. So there are certainly incentives for National Grid, the state's largest utility, to successfully carry out its energy efficiency strategy: the utility aims to save customers $3.6 billion. As part of the 2016-2017 plan, National Grid intends to invest nearly $850 million in electric energy efficiency and over $382 million in natural gas efficiency.
Efficiency plan based on innovation
To help meet efficiency goals—as well as improving its distribution network and service to the customer—National Grid has created a group called the NES Customer Solutions Group
The focus of the team is on innovation and technologies that will drive cleaner energy and improved efficiency, affordability and customer choice. According to James Bell, an associate engineer in the group, NES reflects National Grid's larger Connect21 goals, which centres around the utility's strategy for transforming its infrastructure and developing new energy solutions that align with state initiatives and customer benefits.
Part of the benefit to having the NES group is its focus on implementing new technologies and programmes instead of managing that which exists. Bells explains: “We think it’s easier for us to do our jobs than if we’re getting caught up in the day-to-day operations," he said. “We have to validate if the technology works, and if it can demonstrate savings. Then we roll that into our efficiency programmes.”
Creating new revenue streams
On the residential side, the utility offers a free home energy audit, through which the utility can market other programmes. Typical improvements might include new LED lighting, a programmable thermostat, low-flow shower heads, and discounts on air and ceiling duct work and insulation. It's paid for by the MassSave programme, funded through a charge on customer bills.
On the commercial side, National Grid offers discounts on energy efficient products and technical assistance.
The utility has also installed 15,000 smart meters in its Worcester, Massachusetts service area, which is also opening up a vast number of opportunities including demand response. The Smart Energy Solutions programme draws on smart meter benefits but it involves an in-home display helping customers to manage their consumption efficiently and in turn enabling the utility to ramp down demand.
Bell explained that by having AMI meters, they were able to have dynamic rate structures thereby giving customers more control over their bill. In addition to in-home technology and dynamic rate structures the smart meters and infrastructure upgrades increase system reliability and the utility can now locate and fix outages quicker.
So far, their average customer is enjoying a 5% savings thanks to the meters and those with in-home displays are saving an additional 20%, in part because the in-home setup also included smart plugs allowing the customer to control large devices like hot water heaters and pool pumps.
The in-home display is "an important piece that keeps customers engaged," Bell said. The constant flow of information means "there is always a call to action."
Customers have the ability to pull out of a demand response event if they so choose.
The utility has also launched a demand response focused project called ConnectedSolutions, which aims to leverage a growing emphasis on the Internet of Things. The concept is a smart, connected home and a programme that can alter a behaviour change to maximize the comfort in the customer’s home and help them achieve higher energy savings.
National Grid partnered with Weatherbug Home to construct a platform where customers can connect their devices and participate in demand response and efficiency programmes. From the utility perspective, the programme uses WeatherBug Home’s ability to integrate proprietary weather data with energy consumption modelling from connected devices to better predict and manage demand.
So far a couple of thermostats can be integrated, including Ecobee and Honeywell, but large appliances like washers, dryers, window AC units and hot water heaters are still going to be integrated.
Understanding weather and consumption
The utility is aiming to help their customers better understand the relationship between weather patterns and energy use, thereby giving them even more power over consumption.
According to Earth Networks, which created the WeatherBug app, about half of a home's energy use is determined by the weather. The company has more than 7,500 weather observation points in the United States, and believes linking residential power use with weather analysis can help utilities manage demand.
Earlier this year, Leslie Ferry, chief marketing officer for the Maryland-based company, told Utility Dive it is the company's "neighborhood-level data" that allows it to be successful. "We have very precise insights into weather's impact on homes. We've integrated smart meter data from the utility with a home's profile to build out a thermodynamic model," Ferry said. "Now with the integration of connected devices, the connected thermostat, we can better better predict energy usage and costs.”
On National Grid's system, according to Ecobee, customers using their device on the Connected Solutions platform will save about 7% on their cooling bills.
As the saying goes, the cheapest kilowatt is the one you never use. “That’s the approach we’re trying to use,” Bell said. “If we can decrease the overall load on our system then we don’t have to go out and upgrade our pipes and wires and our substations. So it’s a win-win.”
State support-a big factor
In Massachusetts, National Grid estimates there is about a 3-1 benefit for every dollar spent on efficiency. At the end of the day, Bell said he credits the state's long history with deregulation for Massachusetts' leadership on efficiency.
“I think what helps Massachusetts is the deregulation that happened in 1997," he said. "We don’t control the supply of energy, we’re completely decoupled from supply, which gives us a big advantage where we don’t make a profit off of the energy. It’s a straight pass-thru. That, coupled with unwavering support from the state.”
“In the bigger scheme of things, energy efficiency isn’t new to us,” said Bell. “We’ve been investing in efficiency for decades.”
National Grid is also looking to smaller-scale solar installations. The Green Communities Act allows utilities to own up to 50MW of solar generation. In 2009 NG constructed 5MW and is currently working to develop another 20MW.The aim of the solar demonstration projects is to gain a better understanding of how distributed energy resources affects the grid.
To gain a better understanding of how to make demand response work for both the utility and the consumer, join our upcoming webinar Demand Response for Industrial & Commercial Energy Consumers on 6 September. Another webinar, The Demand Response Masters - EU vs USA Perspectives which is to take place on 12 October will draw up a comparison between the regions. Both webinars form part of our 'Demand Response' In Focus track on engerati. Follow this link for more insight