Utility-led innovation can empower energy consumers and help halt the global temperature rise

Last year was the warmest ever recorded on Earth. And fourteen of the fifteen hottest years on record have all taken place in the 21st century.

As President Obama emphasized in his recent State of the Union address, it’s crucial that we slow global warming to avoid its costly consequences for human health, economic well-being, and in some regions, even political stability.  

{mosads}It’s in this context that delegates from more than 200 countries gathered in December in Lima, Peru for the latest round of UN climate talks. The negotiations — which focused on reaching an international climate agreement — aim to limit the globe’s temperature increase to no more than two degrees celsius (3.6 degrees Fahrenheit).

The forum highlighted a wide range of climate mitigation strategies including carbon taxes, renewable energy investments, and large-scale protection of tropical rainforests. All of these solutions — and many others — should and will play a major role in reducing global emissions.

But, amid the big speeches, heated debates, and friendly conversations, we sometimes forget that each and everyone of us can become part of the solution today by making straightforward, cost-effective changes in our daily energy use.

Behavior change at scale can make an enormous impact

Energy waste is rampant throughout the world.

The European Commission estimates that 20 percent of energy used in Europe is wasted. Even worse, the Lawrence Livermore National Laboratory suggests that the United States is one of the world’s biggest energy hogs, wasting close to two-thirds of the energy flowing through its economy. 

That’s a tremendous amount of squandered energy, lost money, and unnecessary emissions stifling our atmosphere — but it doesn’t have to be that way. Research shows that small changes in our energy habits — things like turning off unused lights, setting the thermostat wisely, and using hot water more efficiently — could help drive at least a 1.6 percent annual reduction in energy use in the U.S. and around the world.

On the face of it, that seems like a small slice of the overall needed reduction. But, as U.S. Energy Secretary Ernest Moniz aptly noted in recent weeks when discussing the landmark U.S.-China climate agreement, “Some may think 1.6 percent is not a huge number, but it’s a very big number when trying to reach climate goals of 26 percent to 28 percent by 2025.” 

Utility technology is key for enabling behavior change

But, how can the U.S. — or any country for that matter — unlock such a large reduction in energy demand? More specifically, how can energy consumers make the changes that add up to this reduction?

Some commentators have suggested moving utilities to the sidelines in this endeavor — envisioning that in a greener future, today’s leading energy providers will be rendered irrelevant by the proliferation of clean, distributed energy resources and improved power storage (both important technologies, no doubt).

But, that would be a serious mistake. Our path to success is much quicker and our savings opportunity much larger with utilities leveraging technology that helps customers save energy — something that’s desired by 66 percent of consumers worldwide.

There are many examples of such innovation in action already. Cloud-based software can analyze customers’ smart meter data to provide personalized energy-saving advice. Smart thermostats can make it easier for homes and businesses to optimize temperature settings. And advanced algorithms can disaggregate a home’s power usage data to identify appliances sucking more energy than they should be, and recommend how to fix the problem.

These types of utility-led, customer-focused technology have produced tremendous results: utilities worldwide have empowered their customers to save a staggering six billion kilowatt hours of energy — enough to take all the homes in Alaska and Hawaii off the grid for a year. That’s more than 150 percent of the Hoover Dam’s annual energy output.

While this approach has generated significant energy savings, it holds even more potential: 

• U.S. households could save over 18 million megawatt-hours every year — that’s $2.2 billion in cash savings and the equivalent of abating 10 million metric tons of CO2.

• Canada could cut CO2 emissions by a whopping 275 thousand tons — the equivalent of planting over 12 million trees — and save consumers CAD$135 million annually.

• European utilities could save nearly 12 million megawatt-hours of energy and abate 3.3 million tons of CO2 emissions every year. That’s like taking every home in five nations — Estonia, Latvia, Lithuania, Luxembourg, and Slovenia — off the grid entirely.

Importantly, this behavioral approach is not only effective in cutting overall energy use, but also in reducing power demand at the moments it matters most, such as hot summer days when the grid is under extreme pressure. In the U.S. alone, it could help avoid the need for about 95 peaking power plants.

It will require good policy

This global energy-saving ecosystem will not thrive with utilities and customers alone — it also needs national and international policy actors to play their part in accelerating the expansion of behavioral approaches worldwide.

The European Union has already instituted its Energy Efficiency Directive. A majority of U.S. states have adopted Energy Efficiency Resource Standards (EERS) along with a number of regulatory mechanisms — such as decoupling the tie between energy sales and utility revenue, and offering performance incentives for utilities that consistently reduce energy demand — that help catalyze utility investments in efficiency. And, most recently, the U.S. and China struck a historic agreement that stands to drastically cut global carbon emissions.

All of these policy efforts are important steps in the right direction as they promote utility leadership in the movement to halt global warming. By leveraging their customer relationships and behavior-focused technology, utilities can empower energy consumers, ensure their long term viability, and, most importantly, prevent the worst consequences of climate change.

The stakes are tremendous, the opportunity is here, and the technology is ready.  So, why wait?

Laskey is president and co-founder of Opower, an enterprise software company that transforms the way utilities relate to their customers.