Market forces are driving electrification

A fundamental goal of energy policy has been to reduce the amount of electricity used as much as possible. That is, until recently. Now, the power sector is rapidly changing, more clean energy generation is coming online, and new goals are emerging. We still want to squeeze every bit of efficiency out of our energy use – but new technologies such as electric vehicles (EVs) and cleaner electric generation are changing ways we will use energy and our goals around energy usage.

Electrify

Because of these recent developments, the prospect of electrifying the economy is gaining steam. The idea, known as beneficial electrification, is to power machines that have traditionally been powered with fossil fuels with electricity that is increasingly sourced from renewable energy. As more and more renewable energy is generated, electrifying the economy can provide a path to drastically reducing carbon emissions. If done right, beneficial electrification can provide other benefits to the grid as well. Because energy storage is still in developmental stages, we still need to match electricity supply with demand in real time. New technologies are allowing consumers to become more flexible in the way they use energy to match energy use to when overall demand for electricity is low and/or when renewable energy is generating. Because renewable energy is intermittent, as in the wind does not always blow and the sun does not always shine, the more electric technologies can be flexible to use renewable energy when it is available, the better. That can make electricity not only much cleaner but cheaper, as well. The cheapest electricity available in Minnesota today comes from wind power, and the price of solar power continues to come down. Taking advantage of greater amounts of cheap renewable electricity will keep our power bills down.

New technologies

Our most energy-intensive appliances and machines – water heaters, heating and cooling systems, and electric cars – can also be the most flexible as to when they can use energy. For example, newer washing machines and dishwashers can be set for a delayed start. Many people do not think of water heaters as an exciting technology, but they are basically giant batteries in your basement, storing hot water that can be used later. Electric thermal storage water heaters, already common in rural Minnesota, can be charged at night, when the wind typically blows the strongest, and stay warm for you throughout the day. Cooling systems can ramp up or down if there is excess demand on the system at any given moment. A utility can do this without affecting the comfort of customers’ homes, by cycling the air conditioners of their thousands of customers. (I discussed these kinds of “demand response” programs in a previous CUB blog.) Many electric vehicles can be charged overnight when demand is low and clean energy is available. As more “smart” technology is integrated into our homes, it will become even easier to control when and how energy is used.

What’s next

Market forces are enabling beneficial electrification. Renewable energy is becoming cheaper every year, as are electric vehicles and other “smart” technologies. As renewables become cheaper, utilities should continue to invest in more and more of these technologies. Electric vehicles are becoming a cheaper and more practical option as the years go by. Consumers will continue to replace older appliances with newer, more flexible and more efficient models. All these factors are pushing us down a path towards beneficial electrification. Beneficial electrification can provide many benefits to consumers, utilities, and the grid and provide a path towards a decarbonized future. It’s up to us to create policies and utility programs that take advantage of this opportunity.