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Putting household appliances on a low-carbon diet

Jon Moynihan and Peter Elliot
PA Consulting Group The Wall Street Journal Europe, page 11
4 March 2009

The emerging consensus on European energy policy is that every step possible should be taken to lower our levels of carbon-based fuel usage, while minimizing costs. Solar, nuclear, wind, geothermal and biomass power, along with changes in the ways consumers conserve energy, are all needed. But serious concerns exist regarding each option. For example, impressive amounts of installed wind power have not led to reductions in carbon-based fuel usage in Europe.
Wind power is not "dispatchable" - that is, grid operators cannot reliably control its quantity and timing. It must be used instantaneously because there is no cost-effective storage option, and yet demand for electricity fluctuates greatly. Daily peak demand occurs in the early evening as people arrive home from work. Annual peak demand in London and other cities is in summer, as air conditioning becomes increasingly prevalent. However, peak wind production is typically during the middle of the night and in cooler months. Solar provides a complement to wind since its peak production is during the day and the warmer months. But it isn't at peak times, and it can be equally intermittent and unreliable. For these reasons, the dirtiest and least efficient oil and diesel power plants are called upon to meet peak demand.

Resolving these issues will not be easy. Forcing consumers to wait to use appliances until power from renewables was available would not be popular. But new technology can provide the capability to automatically shift much household consumption to times when the wind is blowing or the sun is shining - without the consumer even noticing.

One simple solution to this problem would be to use advanced, but available, technologies to pay consumers to reduce usage during peak times, or to maintain grid stability and avoid blackouts. Such a "green grid" approach would allow each consumer to play a significant and personal role in tackling the issues of carbon emissions, energy usage and climate change.

This green grid approach will utilize those "smart grid" technologies already available, in particular smart meters. These meters distinguish between appliances or machines that must be reliably available, and those which can be used on a more discretionary basis. Consumers who agree to allow certain devices to be turned down or off when necessary would be able to get cheaper electricity for that device. Programs which allow power-generating companies to manage peak demand, and customers to reduce their water-heating costs, are already starting to be offered proactively and could be adapted for the green grid.

The smart meter is the first big step. France is deploying them in 90,000 homes. The Irish government is spending more than $10 billion on smart-grid technology out of its $16 billion budget for renewable energy and "clean-tech" projects. The Finnish government plans to deploy smart meters in 80% of homes by 2013.

After smart meters are in place, the next step would be the introduction of "smart plugs." These are plugs that can communicate with the smart meter. Using "smart switches," these plugs can, based on information from the smart meter and preset instructions from the owner, turn the connected appliance on or off, or turn it up or down. Owners would implement their own household's "green grid" in a 20-minute session on the Internet in which they choose which appliances are designated for "green" energy.

Green-minded people already curtail their usage of power. The green grid could expand this behavior modification dramatically by providing energy consumers with information about the availability and pricing of renewable power. The use of heating and air-conditioning appliances -- big power consumers -- could mostly be shifted to off-peak times. Programmable thermostats fluctuate daily heating and cooling requirements already, and could be "green grid"-adapted to take into account the source of the energy they use.

Freezers are another prime example. They stay cold for quite some time, and so could receive their top-up energy at off-peak periods. Green-grid technology could preset a dishwasher to run overnight. On days when the needed renewable energy wasn't available, the smart meter would determine whether nonpeak energy was available. If not, the consumer might, exceptionally, have to live with dirty plates for that day (or, at a high penalty price, override the green-grid arrangement).

For some appliances like lights, hairdryers, televisions and desktop computers, deferring usage is usually not an option. Some households may not choose to participate at all. But with heightened public concern about carbon emissions, many will. For appliances such as hot-water heaters, consumers could choose to partly join the green grid by choosing settings that only modify, not eliminate, usage during peak-power periods.

Office buildings could acquire the bulk of their heating or air-conditioning during clean energy periods. Battery-powered laptops and other devices would charge completely only when clean energy was available, recharging only as needed to maintain operational ability during peak hours. Local authorities are likely to be eager users of the green-grid concept, as they have significant discretionary power usage, such as lighting of municipal buildings, which could be cut off at peak surges.

With the green grid each family, company or organization can decide how green it wishes to be. Some hardy souls might initiate completely green-grid households. The great moment might be when "green grid" surges to create its own peak of demand - and thus a reason to build further green capacity.

How easy would it be? The technologies exist, but widespread implementation and consumer education are needed, requiring cooperation among government, industry and consumers. The up-front cost could be partially diffused through government assistance, possibly as a part of an economic-stimulus program. Policies would be needed to govern the new relationship between utilities and consumers, and to ensure a fair and transparent system. Skilled jobs would be created and economies would benefit. The U.K., Germany, France and Italy are committing to smart metering. A green-grid approach technology could be a pivotal factor in helping them achieving their objectives.

This solution is just one of many ways to attack the energy problem, but it's a big one. If the green grid could eliminate as little as 1% of Europe's annual coal consumption, the carbon reduction would be equivalent to removing more than five million cars from the road. That is something worth thinking about.

Mr Moynihan is executive chairman of PA Consulting Group. Mr Elliott is a member of PA's Management Group.

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