Governments are setting ambitious renewable energy goals in response to climate change. The problem is, the availability of renewable sources doesn’t align with the times when our energy demands are the highest. We need more electricity for lights when the sun has set and solar is no longer available, for example. But if utilities could receive information about energy usage in real time, as Internet service providers already do with data usage, it would change the relationship we have with the production and consumption of our energy.
Utilities must still meet energy demands regardless of whether renewable sources are available, and they still have to mull whether to construct expensive new power plants to meet expected spikes in demand. But real-time information would make it easier to use more renewable energy sources when they’re available. Using this information, utilities could set prices in response to current availability and demand. This real-time pricing would serve as an incentive to customers to use more energy when those sources are available, and thus avoid putting more strain on power plants.
California is one example of this strategy. The California Energy Commission hopes establishing rules for real-time pricing for electricity use will demonstrate how overall demand and availability affect the cost. It’s like surge pricing for a ride share: The idea is that electricity would cost more during peak demand. But the strategy would likely generate savings for people most of the time.
Granted, most people won’t be thrilled with the idea of paying more to dry their towels in the afternoons and evenings, as the sun goes down and demand peaks. But new smart devices could make the pricing incentives both easier on the customer and less visible by handling most of the heavy lifting that a truly dynamic and responsive energy grid requires.
For example, companies such as Ecobee, Nest, Schneider Electric, and Siemens could offer small app-controlled computers that would sit on the breaker boxes outside a building. The computer would manage the flow of electricity from the breaker box to the devices in the building, while the app would help set priorities and prices. It might ask the user during setup to decide on an electricity budget, or to set devices to have priority over other devices during peak demand.
Back in 2009, Google created similar software called Google PowerMeter, but the tech was too early—the appliances that could respond to real-time information weren’t yet available. Google shut down the service in 2011. Karen Herter, an energy specialist for the California Energy Commission, believes that the state’s rules for real-time pricing will be the turning point that convinces energy and tech giants to build such smart devices again.
This year, the CEC is writing rules for real-time pricing. The agency is investigating rates that update every hour, every 15 minutes, and every 5 minutes. No matter what, the rates will be publicly available, so that breaker box computers at homes and businesses can make decisions about what to power and when.
We will all need to start caring about when we use electricity—whether to spend more money to run a dryer at 7 p.m., when demand is high, or run it overnight, when electricity may be cheaper. California, with the rules it’s going to have in place by January 2022, could be the first to create a market for real-time energy pricing. Then, we may see a surge of devices and services that could increase our use of renewable energy to 100 percent—and save money on our electric bills along the way.
This article appears in the August 2020 print issue as “Data-Driven Power.”
Stacey Higginbotham writes “Internet of Everything,” Spectrum’s column about how connected devices shape our lives. Tech writer Higginbotham enjoys covering the Internet of Things because the topic encompasses semiconductors, wireless networks, and computing hardware. She alsopublishes a weekly newsletter called Stacey Knows Things and hosts The Internet of Things Podcast. Higginbotham figures she has at least 60 IoT gadgets in her Austin, Texas, home, and she admits, “Frankly, I hate keeping it all up and running.”