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Pitch

Pay people to use less electricity at key moments when their energy is coming from the grid's most carbon-intensive power plants.


Description

Summary

Ohmconnect pays people to reduce their electricity use at specific times during the week. This proposal has already been put into motion for the territory covered by the California Independent System Operator (or CAISO).

By tracking the power plant activity and price signals in California's energy market, Ohmconnect is able to notify its users when the grid is experiencing higher than expected demand. Unlike traditional peak load shaving programs, which respond to the three hottest days of the year, Ohmconnect targets economic price spikes that happen two or three times a week, every week. When these price spikes occur,  to send signals to turn on expensive and inefficient "peaker plants." These switch on 1% of the time when the grid experiences higher demand than forecasted by the energy market.

Even though these plants are only operating 1% of the time, they represent 15% of the generation costs. This presents a new option for reducing costs that the market has never had before. Using smart meters already installed in California homes, Ohmconnect users can track their energy use and receive notifications when peaker plants switch on. If they reduce their electricity use below normal levels, their saved energy can be sold into the market as if it were newly generated energy. With just a few clicks, Ohmconnect users earn money, stabilize the grid, and keep the air clean in their community.

To sign up, individuals only need a utility account and an Internet connection. If they have smart devices, such as Wi-Fi thermostats, electric vehicles, or smart switches, Ohmconnect can automatically reduce their electricity use for them.

As a bonus, Ohmconnect maps where their energy is coming from and which elements of the home are consuming the most energy. It also provides a gamified experience with points, neighborhood competition, community interaction, and team-building.


Category of the action

Reducing emissions from electric power sector.


What actions do you propose?

Ohmconnect empowers users to take control of their energy sources. Several times a week, the energy needed is far greater than what was expected, and the electricity grid must turn on a "peaker" plant that has a much higher carbon footprint than other plants. These "peaker" plants are often single turbines that have low efficiencies, but can turn on in a short amount of time. "Peaker" plants only turn on for 50 hours a year but cost ~$50M to build.

During these times of electricity alerts, instead of turning on these peaker plants, Ohmconnect has its users reduce their electricity usage locally. Ohmconnect provides emails and text notifications to our users, asking them to reduce their electricity in any and all of the following ways:

  • Shutting off unused lights
  • Delaying the start of major appliances (like dishwashers, washers, dryers, etc.)
  • Turning off the air conditioning and any electric heating
  • Conserving power in any areas possible (turning off power strips, turning off the spa heater or pool pump, unplugging laptops, etc.)

 

Simultaneously, Ohmconnect hooks into existing Wi-Fi devices such as their Wi-Fi thermostat (i.e. Nest, EcoBee, etc.), their electric car charger (i.e. Tesla, Leaf, etc.), their home automation system (i.e. Philips Hue, Samsung or GE appliances, etc.), and their Wi-Fi switches (i.e. Quirky, Belkin Wemo, etc.). During energy alerts, Ohmconnect will automatically reduce our users energy usage so that they don't even have to think about it.

Our users are rewarded each time they participate, whether it is through behavioral change or devices. As we saturate the behavioral change aspect, our users become more amenable to connecting their homes to help them reduce their electricity during peak times.


Who will take these actions?

Everyday users are our key actors. For the vast majority of the population who do not think about energy, these users just need to hook in their smart devices and watch the money roll in. They don't have to lift a finger once we have hooked into their Wi-Fi thermostats, electric cars, and home automation system. Instead, we help them save the environment and pay them for doing so simultaneously. While the users that care about the environment are excited about the opportunity to save the environment and earn money from it, what is really exciting is seeing the positive reactions from users that don't even care about the environment.

These users are already our most staunch advocates. Even though many of our users do not care about saving the environment or reducing their carbon footprint, they do care about making money by making their home more modern and connected. We target users who are furgal, gadget-heads, and young families with little time to think about energy. Gadget heads love the idea that they can convert their well-connected home into a piece of Smart Grid 2.0. Young families and those with a frugal lifestyle love the idea that they can earn money without having to do anything. Through this, we have already seen significant organic growth through word of mouth, neighborhood message boards, and direct referrals.


Where will these actions be taken?

Our product can only currently be produced in deregulated electricity markets where energy can be bought and sold by third parties like Ohmconnect. Deregulated markets are mainly concentrated in the US, centered on California, Texas, and most of the eastern seaboard. Over 70% of homes fall into one of the deregulated markets in the US, and due to the reliance of smart devices, we see the US being our first market to see strong penetration.


How much will emissions be reduced or sequestered vs. business as usual levels?

For each user, we help them reduce their carbon footprint by about 2 lbs of CO2 per event. This is because the carbon cost of energy on average is ~1 lb CO2 / kWh, but during these peak times, the carbon cost is 3-4X that. Because we are mostly shifting the load, not displacing it, we actually are not reducing any energy used but we are reducing the carbon cost by ~2 lb CO2 during each event. We envision about 100 events per year, and already have 2000 users using our system. If our users continue to reduce for the entire year, this would save 400,000 lb CO2 per year.

Our goals are much loftier than that as we hope to expand our reach to 200,000 users, bringing our carbon reductions into the 40M lb CO2 per year range.


What are other key benefits?

As we continue to displace peaker plants from turning on, we prevent those peaker plants from needing to be built. As a result, we are helping prevent the construction of the worst and most inefficient power plants through software.

Another solution for the "peaker" plant problem is battery storage. By deploying large scale battery solutions in residences, commercial buildings or even at an industrial scale, those batteries can be used to prevent "peaker" plants from needing to be built. Ohmconnect is even more environmentally friendly than those batteries, because we tap into existing batteries of homes. Each home has its own thermal storage (which is the temperature of your house). By tapping into that resource, we create a "virtual battery" and prevent the construction of large scale batteries.


What are the proposal’s costs?

Our costs are minimal. We can create a software solution for $1M and be able to replace $50M power plants. Due to recent legislation by the CPUC, third parties have direct access to the markets, and this can be implemented immediately.

Our costs are sunk into the following:

  • 50% Marketing, education, and outreach of users: most users do not understand how energy markets work and how Ohmconnect can provide users cash for having them turn down their energy usage. We have gone about educating them through various videos (https://www.ohmconnect.com/video), events (http://youtu.be/7nx47Q13ICw), and word of mouth.
  • 50% Product development: Ohmconnect needs to build in a infrastructure to communicate to our users in real time that is scalable to 100,000+ users. Simultaneously, Ohmconnect needs to be communicating to the energy markets how much reductionable demand our users can provide at any given time. Our initial product offering would provide hourly response times, but we believe that we can provide 15 minute and even 5 minute response times in the future.


Time line

Because we are a software based solution, our timeline is accelerated. We believe that we can hit the following milestones in the short and long term:

  • Short term (1-3 years): we can generate enough reductionable demand from our users to displace 1 peaker plant.
  • Medium term (3-5 years): with expansion into other markets within the US and expansion of our footprint in users' homes, we believe that we will displace up to 10 peaker plants, or about 500MW of load.
  • Long term (5-20 years): Ohmconnect becomes the primary mechanism for residential demand response across the US, replacing over 50% of the peaker plants, or over 10GW of inefficient, expensive power generation.


Related proposals

N/A. Not aware of any other Climate CoLab proposals related to this one.


References

Mathieu, J.L., Dyson, M., and Callaway, S., 2012, Using Residential Electric Loads for Fast Demand Response: The Potential Resources and Revenues, the Costs, and Policy Recommendations, ACEEE Summer Study on Energy Efficiency in Buildings.

Kathan, D. et al., Staff Report, 2012, Assessment of Demand Response and Advanced Metering, Federal Energy Regulatory Commission.

Hildebrandt, E. et al., 2014, Annual Report on Market Issues & Performance, California ISO: Department of Market Monitoring.