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Influencing consumer action is the key to short-term climate wins

Utilities arm their customers with data and technology to reduce carbon emissions.

By Margaret Lindquist | June 2021


Influencing consumer action is the key to short-term climate wins

The year 2050 is the target that many utility companies and federal and state government officials are setting for their net-zero carbon plans. More than 70% of consumers in the United States are served by utilities that have made public decarbonization commitments. These plans are designed to reduce carbon dioxide (CO2) emissions into the atmosphere through the use of clean energy sources, and eventually reach the point where CO2 emissions are offset by the removal of the equivalent amount of emissions. They come at a time when society is facing a barrage of extreme weather events, an over-strained global energy grid, and growing customer and regulatory pressure.

There are two primary avenues for their efforts around decarbonization: address supply and manage demand. On the supply side, Deloitte’s 2020 Renewable Energy Industry Outlook found that in the US in April 2019 renewable energy generation outpaced coal for the first time (23% versus 20%). But shifts in demand involve big societal changes—for example, it will likely take 20 to 30 years before the US building stock turns over and older buildings are uniformly weatherized. And it will be years before people are using electricity for almost everything—cars, heating, and more.

That means utilities getting started on their 2050 net-zero commitments must look for more immediately effective, short-term improvements. For near-term gains, changes in consumer behavior are the key, since energy saved today affords more climate value than energy saved in the future because emissions from the grid will only go down over time. Engaging customers in this journey is critical. “Behavioral change is accessible to all and can be rapidly scaled,” says Mary Sprayregen, senior director of regulatory affairs and market development for Oracle Utilities. “Utilities need to optimize for scale, speed, and equity.”

The potential of a well-educated consumer

The first step is education. A consumer trends study from Oracle Utilities revealed that 39% of people surveyed had never heard the word “decarbonization” and 67% were only vaguely aware where their carbon dioxide emissions come from. But 45% of respondents said that fighting climate change is personally important and 54% want to reduce their carbon footprint. The statistics show a strong generational divide; 60% of millennials and 79% of Generation Z consumers are willing to pay more for clean energy, compared to 34% of baby boomers.

 

“Without the right information at the right time, you're not going to be able to get people to change their behaviors.”

Mary Sprayregen, Senior Director of Regulatory Affairs and Market Development, Oracle Utilities

Utilities are working to take advantage of this shift, by providing consumers with personalized insights, particularly around time-of-use (TOU) shifts. They’re engaging customers to shift consumption to times of the day when the energy supply is clean, abundant, and inexpensive.

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There are energy-saving measures that work for almost everyone, but personalized insights work far better, even as they add complexity to the process of making recommendations. For example, Sprayregen relates a story about an Ohio TOU study where people thought they were supposed to turn out their lights at times where the rates were the highest. They were doing that, but they were also running their dishwasher or washing machine, which consume much more energy. “Without the right information at the right time, you're not going to be able to get people to change their behaviors,” says Sprayregen.

Personalized home energy reports and behavioral load shaping (BLS) tools are a few of the ways that utilities are educating their customers. The reports use artificial intelligence to turn meter and customer data into personal energy insights and recommendations for saving money and reducing carbon footprints. “A utility might say, ‘Did you know your refrigerator is driving high usage in your home and based on what we know, you're eligible to get a free, high-efficiency replacement?’” says Sprayregen. “That kind of personalized insight along with a recommended action is a really cool way we're working with utilities.” They can also show customers the benefit of using energy at certain times of the day. This has twofold benefits as it reduces demand on the grid at peak times and helps customers save money while using energy when it’s cleaner and more plentiful.

Behavioral programs provide free or low-cost ways to save, are accessible to all, and have the potential to make a huge impact on emissions over the years to come. Although some of the changes seem small, they also drive adoption of efficient energy products and home upgrades. A report from Analysis Group determined that behavioral energy efficiency programs deliver climate benefits at a one-fourth of the cost of weatherization programs—and up to five times faster. Sprayregen is cautiously optimistic. “People are willing to change their behavior, they’re willing to shift their consumption patterns, if they understand the impact.”

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Illustration: Wes Rowell

Margaret Lindquist

Margaret Lindquist

Margaret Lindquist is a senior director and writer at Oracle.