• Virtual Power Plant
  • Carbon Emissions
  • Carbon Reduction
  • Utilities

Utility Customer Engagement Can Help Reduce Emissions

Dan Power
May 26, 2022

Guidehouse Insights

Although customer participation is essential to expanding the presence of virtual power plants, customer engagement can lead to significant emissions reductions regardless of the presence of distributed energy resources (DER) such as rooftop solar PV or behind-the-meter (BTM) batteries. The journey from consumer to prosumer will be required in the energy transition if the full value of BTM assets is to be realized. However, customers who do not have access to rooftop solar PV systems, residential battery energy storage systems, or other DER because of financial considerations, location constraints, or other limitations can rely on alternative engagement opportunities to become a prosumer and reduce their carbon emissions.

When energy providers actively engage with customers to inform them about the changing energy landscape, regardless of their DER status, it can benefit the customer, provider, and planet. Not all customers may be aware of the magnitude of changes required to shift from a primarily centralized fossil fuel generation model to one powered entirely by renewable sources, most of which are distributed. Historically, customers in areas where service reliability is not an issue do not interact with their provider unless there is an unexpected outage or an anomaly on their bill. With the power grid shifting, so too must the antiquated relationships energy providers have with their customers. 

Every Customer Can Make an Impact

A well-informed energy consumer is more likely to take actions that can benefit the grid. This could include performing an energy audit of their home or business to determine where efficiency improvements can be made or moving their most energy-intensive tasks to off-peak hours. Improving building insulation and replacing lights, appliances, or other equipment with more energy efficient models can result in a customer permanently lowering their demand for utility sited electricity. This can lower the likelihood the utility will need to employ fossil fuel peaker plants to meet unexpected spikes in demand above what their baseload plant capacity can handle. Peaker plants are often the most expensive, inefficient, and polluting power plants in a utility’s portfolio. 

Shifting energy-intensive processes to off-peak times allows a utility to use more renewable energy capacity to fill that demand instead of curtailing it as is often the case during high renewable generation output periods. Many utilities have programs in place already that use time-of-use rates to encourage behavior like this. While larger commercial and industrial customers may use automated programs and controls to shift certain processes to off-peak hours, residential customers can accomplish a similar result without smart grid technology. Lowering the setpoint of a home’s thermostat in the middle of a hot day beyond its usual value, then raising it over its usual setpoint in the late afternoon and evening reduces the home’s demand for electricity during peak periods. With effective insulation and properly treated windows, the thermal mass of the building keeps the cool air from earlier in the day so that the resulting temperature rise does not significantly affect the customer’s comfort level. In 2020, the California Independent System Operator curtailed 1.5 million MWh of utility-scale solar generation. By pre-cooling a building earlier in the day and not running the air conditioner in the evening, the customer is facilitating less solar curtailment while reducing stress on the grid. 

Transitioning from fossil fuels to renewable sources is one of the largest undertakings in modern history. Although the transition will take enormous effort from energy producers, utilities, and grid operators, it will also require involvement from customers across energy efficiency initiatives to truly succeed.