Catalyzing the Market for Automated Emissions Reduction

How smart devices are opening up new opportunities to reduce emissions from the grid

Download the charrette report: Catalyzing the Market for Automated Emissions Reduction

In March, Rocky Mountain Institute and our partners convened more than 60 stakeholders from across the electricity industry for two days in Chicago to explore the potential for a new and promising technology: automated emissions reduction, or AER. At scale, this technology, deployed in residential loads such as air conditioners and water heaters across the U.S., could reduce carbon emissions each year by the equivalent of taking 2–3 million cars off the road. This does not count the potential from other flexible loads in commercial and industrial settings; at least 30 percent of the total U.S. electricity consumption has some inherent flexibility that could be leveraged for carbon reduction using AER.

Building off new research that can identify marginal grid emissions signals from a variety of public data sources, the nonprofit WattTime pioneered AER in the past two years as a customer-facing service. AER reduces pollution by seamlessly shifting the timing of end-use loads to move consumption into the cleanest possible intervals, allowing customers to significantly reduce the environmental impact of their energy use.

WattTime’s pilot project in Chicago, executed in partnership with RMI and several other organizations, produced compelling evidence that customer demand for this kind of technology may be significant. We convened the Chicago workshop in order to test the value proposition of AER for different customer segments and identify a path to scale the technology. In particular, participants identified the sources of value that AER could potentially provide, as well as barriers that must be overcome for stakeholders to successfully unlock that value.

By the end of the event, participants identified 11 priority projects that could help solidify the value proposition and test the key use cases for AER going forward. The project team, led by WattTime, will be working with participants and other stakeholders to drive these initiatives to a successful conclusion and scale the broader market for AER.

Primary Sources of Value and Barriers

Charrette participants worked in breakout groups to understand the value propositions and barriers for four distinct customer groups.

1. Institutional buyers: Focusing on AER for institutional customers, one breakout group discussed several value propositions. First, AER can provide a lower-cost mechanism to reduce emissions than other common levers used by institutions with emissions-reduction goals, allowing customers who use AER to save money by avoiding spending on other measures. Second, AER can provide both internal and external marketing benefits, by allowing companies to demonstrate that they are taking action to address emissions. Finally, AER can support simplified and improved emissions accounting.
2. Individual consumers: This breakout group identified three value propositions for individual, household-level customers using AER. First, the technology can enable customers to “go green” without relying on anyone else. Second, AER can provide a valuable marketing tool to reach those customers who do want to go green, and help device providers differentiate themselves. Finally, the technology can help customers enable indirect emissions reductions, for example by enabling higher levels of renewable energy to be integrated onto the grid.
3. Utilities: The breakout group focused on utility use cases for AER discussed ways to use AER to improve existing utility efforts in three areas. First, utilities may be able to use AER to improve customer engagement with traditional demand-side management programs and thus lower customer acquisition costs. Second, utilities could leverage AER to meet their own company-level emissions goals. And finally, utilities could pilot entirely new programs with AER, such as a utility-branded products that let customers validate their emissions savings.
4. Policy perspectives: The fourth breakout group at the event explored policy perspectives on AER, and identified three main sources of value. First, similar to a use case for institutional customers, AER can be used to meet existing emissions goals (e.g., state- or community-level targets) at lower cost. Second, the granularity provided by AER can be used to target these savings geographically, and avoid mercury and other pollutant emissions where they do the most damage. Finally, the attendees agreed that policy could have an important role to play in establishing metrics and standards to increase consumer understanding of and confidence in AER, as well as setting the stage for broader time-based emissions protocols that could enable even larger emissions savings.

Each group also discussed several barriers to realizing these values. Among them were: the relative complexity of AER compared with other emissions-reduction measures that may make it difficult to communicate its benefits to stakeholders; ongoing questions around who is in the best position to pay for any infrastructure or product changes required to enable AER; and proving the case that customers will adopt AER-enabled devices and use them to reduce emissions.

The Path Forward for AER

After identifying the value propositions and possible barriers, participants designed 11 initiatives to test the hypotheses around customer value, and address the particular barriers for each customer segment. Using this industry input, the project team is prioritizing five near-term initiatives, working with participants and others, to drive the market forward.

1. Pilots to test AER for institutional customers. This project will facilitate connections between large energy consumers (such as large companies or municipalities) and device manufacturers that could integrate AER capabilities in order to help jump-start these efforts.
2. Pilots to test the value of AER for residential demand-response-program customer acquisition. The project team will work with utilities and demand-response providers to test how much residential customers value AER features, and how that might improve customer acquisition efforts.
3. Device-level certification. This effort will develop a certification system for devices that verifies appropriate device response to an AER signal.
4. Integration of AER with existing greenhouse gas (GHG) accounting frameworks. WattTime has applied for AER to be recognized as a source of carbon offsets through a third-party certification firm, which would be compatible with standard GHG Protocol accounting frameworks. As part of the process, the team will collect feedback during an upcoming public comment period.
5. Creating standard, open infrastructure for AER deployment. The project team will coordinate several developers of “Internet of Things” software that are developing tools to facilitate AER and making them publicly available, often with open source.

How to Get Involved

RMI’s project partners at WattTime are leading these ongoing initiatives with interested charrette participants, but there is room for these efforts to grow. If your organization is interested in learning more about this work or joining our efforts to drive this market to scale, please contact us via email: mdyson@rmi.org.

Guest Author Gavin McCormick is cofounder and executive director of WattTime.