So what does this mean for the Smart Grid?  Electric utilities in California contribute 28% of CO₂ emissions, and began planning their emission reductions in 2006.  As previously blogged, California uses less electricity per capita than any other state in the US, largely due to enforced policies and regulations that increase energy efficiency of appliances and electronics as well as buildings.  However, the peak demand continued to grow as more people moved to the hot interior of the state where air conditioning is needed.  That prompted the California Energy Commission, which sets energy policy for the state, to create a loading order that governs how the investor owned utilities (IOUs) should plan to add to electricity production.  That loading order puts energy efficiency and demand response measures on top – so negawatts became part of the energy equation.  Integration of renewable energy and distributed generation comprise the second set of energy sources, and then integration of clean fossil fuels and improvement of infrastructure. 

Smart Grid-related solutions significantly factor into this loading order.  Energy efficiency and DR programs can use smart meters, Home Energy Management Systems (HEMS), and energy service providers to produce negawatts.  As California homes and businesses continue to ratchet down electricity use, we’ll continue to enjoy the savings that accrue to intelligent energy consumption.  Look for increased adoption of solutions and programs that drive down electricity usage within the state now that the voters have spoken.   

Beyond negawatts, the second step in the loading order also has a strong dependency on Smart Grid technologies and initiatives.  The Smart Grid integrates renewable sources of energy into the electrical supply chain, and supplements or “firms” intermittent renewable energy sources with energy storage.  California recently enacted an energy storage bill (AB2514) to drive the market for IOU use of these technologies, and all the IOUs in the state are building out utility-scale renewable energy facilities – looking at wind, solar, geothermal and even hydro in the form of currents and waves. The recent Federal Energy Regulatory Commission (FERC) ruling about FiTs is encouraging news for distributed generation (DG), and while some of the state utilities have been reluctant to embrace this concept, achieving a 33% Renewables Portfolio Standard (RPS) may not be possible through utility scale efforts alone.  There are lots of rooftops that are suitable for distributed solar generation – and its time to put the programs in place to accelerate deployment on a mass scale. 

DG deployment has additional reliance on Smart Grid technologies, since the electrical distribution grid must be upgraded to support bi-directional flow of electrons, and aging transformers must be replaced with new models that can handle not only the daytime loads but the anticipated nighttime loads of charging electric vehicles (EVs).  Infrastructure improvements (number 3 in the loading order) must also take place at the transmission network to facilitate remote monitoring and management of transmission lines and substations for reliability of electricity supplies.   

All of these initiatives mean local jobs to conduct energy audits and building retrofits; deploy distributed generation facilities; and conduct upgrades to the transmission and distribution networks in the state.  Despite all the gloom and doom tactics that Proposition 23 advocates used, the reality is that Smart Grid solutions, as part of a clean tech economy, will deliver tangible economic benefits to California, as well as other states that embrace them.

HEMS solutions usually include some sort of In-Home Display (IHD) that communicates information that ranges from current electricity rates, home electricity consumption rates, and what I term “home operations metrics” like temperature and security status. These IHDs can be wall-mounted displays or standalone, battery-operated wireless displays, or even visual devices that simply glow a different color to indicate home consumption or real-time tariff rates.

In the current electrical grid, the utility’s relationship with a residential ratepayer ends at the meter, affixed to the outside of a home. Bills arrive after the fact – at a minimum a month after your electricity use. HEMS and IHDs completely disrupt this consumer engagement model, and offer the opportunity for utilities to extend their relationship inside the home with much richer content and real-time data. True, utilities have websites that consumers can visit, but this information is relatively static.

Smart Grid-enabled HEMS solutions can deliver information that residential users would find compelling – such as real-time billing information mentioned above, tailored suggestions about how to trim their electricity bills, offers for participation in demand response programs to reduce rates, and more. This information empowers consumers to make educated decisions in real-time about how to manage their electricity consumption. That’s the good news.

The bad news is that, operationally and culturally, utilities are not accustomed to selling to residential end users. They don’t inhabit a competitive world where they must fight for mindshare and market share. If you look at the take rate for utilities’ consumers to sign up for electronic billing as an indicator of their selling capabilities, it is abysmal. Only 17% of all residential utility customers have enrolled in electronic billing. In comparison, 40% of telecom customers have electronic billing. Clearly, there’s a problem in utility outreach and education to sell consumers on a program that has solid environmental and convenience benefits.

If utilities have low success rates in getting people to enroll in simple programs like electronic billing, then there are real challenges in communicating complex and layered messages about the benefits of HEMS solutions and associated IHDs. As I noted in last week’s blog about PG&E’s rollout of smart meters, residential end users will have the opportunity to have a very visible and very disruptive technology introduced in their homes. If it’s done well, not only do the utility rate payers benefit, but overall we all benefit from fast adoption of Smart Grid solutions. However, technology rollouts that result in confusion, opposition, and lawsuits have negative impacts on everyone.

Utilities are depending on HEMS solutions to enable widespread participation in demand response and energy reduction programs. The stakes couldn’t be higher to plan and conduct effective rollouts of these HEMS applications, starting with clear messaging about the benefits of HEMS solutions to average residential customers. Not every consumer embraces change – especially when we have all been conditioned to regard electricity as a cheap and plentiful commodity that doesn’t require much attention on our part. However, we can be educated to welcome changes such as smart meters and HEMS solutions, as some utilities have successfully demonstrated.
HEMS rollouts must clearly articulate the benefits to end users – what’s in it for them, what’s required of them, how to get more information, how to get support when things break, and examples of what the solution looks like and options for IHDs. A successful HEMS rollout requires a sophisticated sales and marketing strategy. Next week’s blog will explore some of the key tactics in a successful strategy.

Flat Panel TVs Get Energy Efficiency Standards in California
Break out the Champagne for the bold decision by the California Energy Commission (CEC) in approving new energy efficiency standards for TV sets sold in California!
Recent blogs (see archives: October 12th and 26th, November 2nd and 9th) covered the brouhaha that the CEA and some TV manufacturers created with the usual scare tactics about job loss, economic disaster to businesses, and all the other assorted ills that have been projected with every previous CEC energy efficiency standard. Fortunately, the CEC knows from actual experience that these standards improve economic conditions – for California consumers who will enjoy reduced operating costs (i.e. electricity bills). In energy efficiency matters, other states often adopt the CEC rules, so here’s hoping that this positive trend to reduce energy consumption continues across the nation.

This concept is summed up as the Negawatt – defined in the Smart Grid Dictionary as the “watts of energy saved through a reduction in energy use or increase in energy efficiency.  It is the greenest form of energy.” 

California is a leader in Negawatts.  As previously noted in my October 12 blog, the California Energy Commission (CEC) has defined energy efficiency standards for appliances sold and used in California since 1976.  The results of those actions are that per person, annual electricity consumption in California has remained steady at 7,000 kWh while electricity consumption has risen to 12,000 kWh in the rest of the USA. 

What this means is that Californians are not wasting money on electricity-guzzling appliances.  However, 35 million devices are omitted from that appliance list – California TVs.  The CEC wants to remedy this gap in the standards with regulations for TVs sold and used in California.  Docket # 09-AAER-1C Appliance Efficiency Regulations Pertaining to Television Efficiency contains the information about the regulation under consideration.

This standards proposal is facing fierce opposition from the Consumer Electronics Association (CEA).  In keeping with Halloween, they are filling editorial pages with fear and gloom – this regulation will kill retail jobs. 

Could an EnergyGuide label, which would identify annual operating  costs (electricity consumption) for a TV and also rank that TV’s overall energy efficiency on a scale of best to least efficient force Californians to drive across state borders to buy “bootleg” TVs from Nevada, Oregon, or Arizona?  According to this logic, Californians must be doing this already for all of the other appliances covered by CEC EnergyGuide standards since 1976. 

Today I counted 26 appliance stores within a 10 mile radius of my Bay Area zip code, ranging from small businesses to large national chains.  Californians are still buying appliances locally, and perhaps they appreciate that their annual operating costs for these appliances are lower as a result of the energy efficiency standards.

The CEA opposition does raise a couple of questions.  Why oppose it?  Over 1000 TV sets already qualify for the standards that would be imposed in 2011.  Some manufacturers, like Vizio, support the standards.  The CEA claims that an energy efficiency standard would “stifle innovation”.   Wouldn’t it also promote innovation in designs that reduced energy consumption, innovations that could probably be extended to other uses too?

May the most energy-efficient manufacturers win – because it’s a triple win.   It means more Negawatts out there, it means reduced need for more power plants and it means reduced TV operating costs for every consumer.

The Smart Grid takes energy efficiency to new levels of savings, as noted in an October 20 press release.  Manufacturers like GE and Whirlpool are participating in the recently launched Smart Green Grid Initiative (SGGI), a collaborative industry association that demonstrates the role of smart grid technologies and practices in the achievement of climate change goals.  One of the ways to do that is through energy efficiency and smart appliances that can communicate with the electrical grid.  I didn’t see the CEA on that list of enlightened manufacturers and industry associations.

And with Halloween in mind – like many other appliances, TVs are energy vampires.  Even when you turn them off, they are still drawing power.  The only way to cut the power completely is to unplug them, or put them on power strips that have “kill” switches for complete cessation of power draws.  You can buy dumb power strips for as little as $6 and see an ROI in as little as a month.  If you do have some devices that MUST be drawing electricity 24X7, there are intelligent power strips available that accommodate those needs too.  The bottom line is that these are simple steps for residential electricity customers to save some money, generate Negawatts, and reduce carbon footprints.

The TV industry opposition seems so drearily familiar to other industries that have complained about other regulations.  Some readers will recall the vehemence that met seat belt regulations and requirements for catalytic converters.  The auto industry made a number of wild claims about them that turned out to not be true.

Here’s a little history lesson:  In 1976 the CEC first set standards for appliances sold and used in California.  The results of those standards are that per person, annual electricity consumption in California has remained steady at 7,000 kWh.  For the rest of America, electricity consumption has risen by 40% to 12,000 kWh.  Reduced consumption of electricity means reduced energy bills.  Reduced consumption of electricity means avoidance of building power plants.

In California, TVs, DVRs, DVDs, and cable/satellite boxes consume 10% of a home’s electricity.  The standards that the CEC proposes would apply to new TVs sold after January 1, 2011, and would reduce energy consumption by 33%.  A second tier of standards proposed for 2013 would bump up the reductions in energy consumption to 49%.  That ka-ching sound you hear is money you can save in operating costs.

The Environmental Protection Agency (EPA) also announced changes for TVs seeking Energy Star compliance in September 2009 – they must be 40% more energy efficient than conventional models starting May 1, 2010.  In May 2012, the rules require that an Energy Star-labeled TV must be 65% more efficient than current models.  The Consumer Electronics Association (CEA) expressed concern about the EPA focus on energy consumption rather than energy efficiency.  Why are they concerned?  Given the propensity for consumers to purchase ever larger TV sets, it is important for us to understand the true impacts of our purchase decisions with regards to electricity use.  Did you know that a 42 inch LCD TV uses less electricity than a 42 inch plasma TV?  Did you know that an old technology like a cathode ray tube (CRT) only uses .23 watts per square inch versus the LCD’s .27 watts per square inch?  Did you know that a new flat panel TV typically consumes more electricity than your refrigerator?  Considering that TVs are operated for an average of 5 hours every day, the use of TVs that are electricity guzzlers will add up – and impact not only your wallet but the overall electricity requirements of your local utility.

Given the success of the current CEC energy efficiency standards, we really need similar standards for TVs.  However, one really important piece of information is missing for consumers mulling over purchase decisions for TVs.  There are no EnergyGuide labels on TVs.  Yes, the ubiquitous label on many other appliances does not exist for TVs.  The EnergyGuide label tells you the yearly electricity requirements for the product in question and also ranks that product’s overall energy efficiency on a scale of best to worst (most energy efficient to least energy efficient).  EnergyGuide labels help consumers calculate annual operating costs and provide invaluable information for consumers who want to buy energy efficient products for their green benefits and to save money.  Why isn’t there an EnergyGuide label for TVs?

That’s a separate battle to be fought, but in the meantime, the CEC is taking a good first step with its hearing on Tuesday, October 13 about electricity use in TVs.