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The Next Big Energy Technology: Information
By TODD MYERS

Here’s a question. What is the next key electricity technology? Solar energy? Tidal power? The next generation of super-efficient natural-gas turbines?

Actually it is something more simple: information. Providing information to consumers about their energy use and prices can provide a powerful incentive to make better use of the electricity we already produce. That information can also provide an opportunity for innovators to develop new products.

That combination of incentive and innovation makes increased access to information a key step for consumers and the environment.

We already have examples of how improving access to electricity information can reduce demand. A simple experiment in Washington state found consumers with price-sensitive thermostats saved more than 10% on average. Price information allowed people to voluntarily change how they used electricity and save money.

Results like that are one reason the Federal Energy Regulatory Commission noted, “it is the residential class that represents the most untapped potential” for these kinds of demand response opportunities. In fact, there are already companies trying to deliver that promise.

A company called Opower worked with Baltimore Gas and Electric to give residential consumers incentives to cut electricity use during peak demand, when prices are high. They cut peak use by 5% in the first year, with consumers who agreed to receive text messages achieving a 15% reduction.

Another company had similar results in Australia. Working with United Energy, the Bidgely Homebeat app made use of real-time feedback and performance-based incentives to encourage homeowners to reduce electricity use during peak times. They provided large, one-time rewards and were able to reduce peak demand by about 30%. Although the rewards were larger than would be appropriate for an everyday program, it demonstrated the power of the concept and helped teach users about the need to reduce peak demand.

Information can also provide options consumers would not have otherwise considered. A company called Tendril works with utilities to analyze energy use and provide targeted energy efficiency offers to homeowners. For example, if a homeowner’s energy use is going primarily to heating, the app gives tips and offers for weatherizing.

These apps provide information that can be used by consumers. They analyze the information in increasingly sophisticated ways.

There are still barriers to giving consumers access to this information.

First, getting information directly to consumers can be difficult because the utility may not share it. Indeed, most utilities are not participating in information-sharing efforts. While privacy should be protected, consumers should have the right to learn that information and to share it.

Additionally, in the guise of “consumer protection,” many electricity rate structures shield residential users from price fluctuations. When information was difficult to obtain and respond to, that protection was more understandable. Now that consumers have the ability to receive and react to information immediately – with thermostats like Nest, which can be controlled from your phone – there is little excuse not to give consumers the opportunity to save money, along with resources and incentives to respond to peak demand.

The man who discovered electricity commented that “a penny saved is a penny earned.” America will certainly need more power in the future, but increasing consumer access to information about electricity use allows us to save electricity, save money and help the environment.

http://blogs.wsj.com/experts/2016/09/18/the-next-big-energy-technology-information/

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