Market Makers

Overview

By 2050, the global population will approach 9 billion, escalating the burden on our energy resources. Because of this expansion, there is a critical need for efficient energy solutions. While the concept of energy efficiency has been around for several decades, innovation and application of new ideas has been limited. In recent years, New York City has been emerging as one of the leaders in clean technology, with tangible efforts to become a more energy efficient city. As part of Climate Week at the New York Academy of Sciences, on September 20, 2011, "Market Makers: Developing and Deploying Energy Efficient Technology in NYC" highlighted the innovative solutions being developed in NYC to help solve this energy crisis. The presenting partners for this symposium included the Green Science and Environmental Policy Discussion Group of the New York Academy of Sciences, Climate Week NYC, NYC Accelerator for a Clean and Renewable Economy at NYU POLY, and The Sallan Foundation.

Colin Smart, the Demand Response Section Manager of Con Edison, the utility company that provides gas, electricity, and steam to customers in NYC, discussed the importance as well as the challenges of reducing the peak in demand for electricity, especially during the summertime. Compared to the rest of the year, the largest consumption of electricity occurs during the summer months, due to the use of air conditioners. This consumption places a tremendous burden on the electrical grid that delivers energy from suppliers to homes and office buildings. Reducing this peak in electrical load, the amount of electricity running through the circuit, would increase the efficiency of the supply chain, from the generation of energy to the distribution to consumers.

This curve depicts the amount of electricity consumed over a particular time interval and demonstrates the lack of energy efficiency under current distribution methods. Innovative solutions are being devised to reduce the peak in electricity demand (left hand side of the curve), to reduce the strain on our energy resources, and to create an overall more efficient supply chain system. (Image courtesy of Colin Smart)

Smart emphasized that heat waves pose a particularly large challenge to Con Edison. In these extreme conditions, buildings and homes remain warmer than average during the overnight hours. With little relief to the electrical grid overnight, load at sunrise is already larger than usual, which further exacerbates the strain on the grid hours later during the hottest part of the day. To manage this problem, Con Edison is focusing its efforts on making the distribution of electricity less expensive and more efficient, through incentives. In summer 2011, 25,000 NYC residents with central air conditioning allowed Con Edison to control their thermostats during times when demand for electricity was high overall, such as during heat waves, to limit the burden on the grid.

While this effort reduced some of the load, Smart described how personal window air conditioning units still remain a big challenge. Currently, NYC has 6.1 million air conditioners, with a projected 7.1 million within 5 years. Smart stressed the difficulties of controlling the energy consumption of individuals, which stem from the economics of the use of personal units. For example, if a landlord pays a tenant's electricity bill, the tenant has no incentive to purchase an energy-efficient air conditioning unit or to power down the unit while the tenant is away from home.

To address this problem, Con Edison is collaborating with ThinkEco, a developer of energy-efficient products for homes and businesses, and together they are testing new and innovative energy saving methods in NYC. Cofounder of ThinkEco Mei Shibata presented the company's Modlet, the Modern Outlet, a device capable of reducing power to electrical appliances plugged into wall outlets when the devices are not in use. Plug load is the amount of energy drawn by an appliance plugged into an electrical outlet. Even when inactive, appliances connected to outlets continuously draw power. Shibata showed that since the 1990s, there has been an approximately 30% increase in plug load for residential spaces and roughly a 25% increase for commercial buildings. This increase is primarily due to the increase in personal electronics, such as computers and printers. To compensate for this mounting energy consumption, ThinkEco developed an energy efficient solution to reduce plug load that modifies a wall outlet from a passive conduit of electricity into an outlet capable of saving energy. Shibata described the installation as simple: the Modlet is plugged into an existing outlet at a home or office and an appliance is then plugged into the Modlet. Once installed, the Modlet wirelessly communicates the amount of energy used by the appliance to a consumer's personal computer or smartphone, where the usage is monitored through a web browser. Shibata explained that consumers could also manage their personal energy consumption through the software, actively reducing the amount of energy drawn by their dormant appliances.

In the summer of 2011, ThinkEco worked with Con Edison to perform an Energy Efficiency and Demand Response study to test the Modlet. Sample Modlets were provided to NYC apartment residents for participants to install. During one study day in July, residents using the Modlet experienced a 37% reduction in electricity consumption relative to the projected consumption without the use of the Modlet, with similar savings seen during other study periods. ThinkEco received positive responses to the campaign, with all post-study respondents requesting to participate again next summer, and others inquiring about obtaining their own personal Modlets. Currently, ThinkEco is preparing the Modlet for retail. While she feels the market is ready for energy efficient solutions, Shibata is concerned that adoption of this new kind of product could take years. To manage this potential obstacle, ThinkEco's strategy was to create an easy-to-understand and easily-accessible, energy-efficient solution. Shibata emphasized that the Modlet will provide consumers with more control over their energy consumption. She envisions a future where consumers can turn off their coffee pot that was accidentally left on and can control their air conditioning to save money when they are away from home, all from a smartphone. Shibata is hopeful that devices like the Modlet will provide benefits beyond an increase in personal convenience and will help boost overall energy efficiency throughout society.

While the Modlet was designed to help personal consumers improve their energy efficiency, there are efforts underway to manage and reduce the electricity used by industrial consumers as well. Allen Freifeld, the Senior Vice President of External Affairs of Viridity Energy, described how the company helps large industrial consumers of electricity become proactive participants of the regulation of their energy consumption through use of a smart grid, an electrical grid that allows for the two-way exchange of electricity as well as of information between suppliers and consumers. Viridity Energy is at the interface between commercial consumers with sophisticated building management systems and the electric grid. As a demand-response provider, Viridity adjusts the consumer's use of electricity based on the fluctuation in energy demand throughout the day. Freifeld emphasized that a fundamental characteristic of the energy grid is that an instantaneous balance must be maintained between the generation of electricity and the amount being consumed, since there are currently no widely adopted methods to store electricity. For example, if consumer A turns on a light, generators must increase electricity production to compensate for the increase in usage. Sometimes, undesirable methods, such as those that produce emissions harmful to the environment, will be employed to meet the energy demand. In lieu of this, Freifeld proposed an alterative option where consumer B would reduce his/her energy consumption to maintain the necessary balance on the electrical grid. As an incentive to curtail electricity consumption, consumer B would be paid for the electricity he/she does not consume, at a price slightly lower than it would cost to activate another generator, such as a coal plant. This method not only promotes a cleaner environment, it pays flexible consumers for reducing their electricity usage, transforming the consumer into a resource available to the grid rather than a burden. Furthermore, the balance on the grid is maintained through less-expensive means, lowering market electricity prices, economically benefiting all consumers. This cheaper, cleaner, and more efficient smart grid is highly desirable to federal regulators, and is supported by federal policies.

Freifeld emphasized that the price of electricity fluctuates every 5 minutes – 10 minutes, with the price peak coinciding with the peak in demand. This price fluctuation becomes important to the consumer when considering the best time to sell electricity back to the grid. To gain the largest economic benefit, consumers should reduce their energy consumption and sell back to the grid when the price for electricity is the highest, according to Freifeld. To assist consumers in making informed decisions on when to curtail their energy consumption, Viridity uses both weather and electricity load forecasts to predict electricity prices a day in advance as well as on a real-time basis. Viridity then notifies the customer of the anticipated price variations, as well as of the most economically beneficial times to reduce energy consumption. With the consumer's permission, Viridity reduces the building's energy usage at these profitable times by sending an electronic signal to the building management system. Consumers are financially compensated for their predictable reduction in electricity consumption. This dynamic process provides industrial consumers with control of their energy consumption, much like the Modlet provides control to the personal consumer. Currently, Viridity is working with University of California, San Diego, Southeastern Pennsylvania Transportation Authority (SEPTA), as well as with Con Edison in New York City to provide information about energy use in the grid to industrial consumers and allow them to make decisions about their energy consumption.

Use the tab above to find multimedia from this event.

Presentations available from:
Moderator: David Biello (Scientific American)
Allen Freifeld, JD (Viridity Energy)
Mei Shibata, MBA, MS (ThinkEco)
Colin Smart, MBT, EMDV (Con Edison)

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