Accelerated electrification of economies is inevitable

Rating: High school and post-secondary

Summary: Markham interviews Natasha Vidangos, head of research for the Washington-based Alliance to Save Energy, about a new study that shows the cost, emissions, and other benefits of switching from fossil fuels to clean electricity.

Related links:

Alliance To Save Energy Pushes To Accelerate ‘Active Efficiency’ – press release

Frontier electrification technologies in industry

Electrification of industry could reduce global fossil fuels consumption by 20% – IEA

Unleashing the benefits of electrification for utilities and customers

Decarbonizing the tough stuff – industry, heavy-duty transport – video interview with Laetitia de Villepin, Energy Transitions Commission

This interview has been lightly edited.

Markham Hislop:  Electrification is a key component of climate policies across Canada, at least in most provinces. I guess Alberta is a notable exception, but the idea of electrifying transportation, buildings, and industry is really the primary way that Canada intends to get greenhouse emissions down. There’s a new report out from an American organization called the Alliance to Save Energy. And we’re going to be talking to Natasha Vidangos from the Alliance.

If you could just give us an overview of that study, please.

Natasha Vidangos:  This study came about as part of a program that we’re running, which is known as The Active Efficiency Collaborative. The Active Efficiency Collaborative is an organization that is trying to take a broader view of what energy efficiency is and could be and think about all of the opportunities to optimize energy. Not just thinking about the end-use and one specific use, but how do you pull all the pieces together in a way that really uses energy better?

So “beneficial electrification” is actually a great example of this because it’s a space where very often an electrified device is often more efficient than a device that’s [pwereed by fossil fuel. I’ll pause for a second, for a few definitions in case anybody’s not familiar with some of the terminology.

Electrification is technically moving from something that uses a fossil fuel to something that uses electricity. So converting from a furnace that’s running on fuel oil or natural gas into one that is running on electricity, like a heat pump, or electric vehicles is a great example of beneficial electrification moving from gasoline or diesel onto an electric fuel source.

Electrification isn’t always a good thing, as some will point out. There are times where you can point to devices that will actually make it less efficient to use an electrified device, or if the electrified device costs 10 times as much as the other one, then you might need to think more about what it means for it to be beneficial.

Beneficial basically means it does three things good for society: Good for the environment, good for costs is at least positive movement in one of those and doesn’t affect the other two.

Markham Hislop:  I know states like California, for instance, are very aggressively intending to electrify and it looks like to me that the technology is ready for us to electrify or begin electrifying many parts of our economy. So what does your study say in terms of how we should go about doing that?

Natasha Vidangos:  The main opportunity with beneficial electrification is it can do a lot of really great stuff. It’s one of the best options to decarbonize. It’s one of the best options to get greater control over what’s happening on the grid. This is something that’s kind of abstract, but it’s at the heart of what makes this so cool is the fact that if you electrify more devices – especially in a place where you have greater controls that allow those devices to communicate back to the grid – all of a sudden those devices can actually be of service to the grid, too.

This means that if the grid is one that relies on more renewable energy, like solar and wind, which might only be there when the wind’s blowing and when the sun’s shining, you can use all of those other loads, all of those electric vehicles and heat pumps to sort of balance out the management of the grid so that you’re not being required suddenly to bring online some of those old fuel oil peaking plants to make sure that the grid doesn’t go down in a shortage.

So all of a sudden you’ve got something that really is pulling all the pieces together, not just at your home, but really for the whole system.

Markham Hislop:  We saw California after the rolling blackouts this summer talk about demand management, which would be a form of that. And I assume, given the experience in California, it’s kind of a lesson, that this is something we might want to do gradually, at least to begin with as we implement more renewables, as we modernize the grid and, and bring in all the software and other associated technologies like artificial intelligence that are required to do what you’re describing.

Have I got that, right?

Natasha Vidangos:  I would say that’s accurate. And the one thing that is true, if I may, the utility sector, isn’t the fastest moving sector. That’s a point of comfort or a point of frustration depending on who you talk to. But it’s definitely the case that this is relying on a lot of technologies that have been there before, but the ability to glue them all together and optimize them as quickly and effectively as we can now is the real game-changer.

So the idea that you could use artificial intelligence to create a design, such that a consumer can say, “I want to do my best as regards to the environment,” then you can optimize their devices, ensure that they’re feeding into the grid at the right times, consider where you can cut energy waste in the best places. It creates a package that can be customized to individuals, to companies, to industries.

So that’s a real breakthrough.

Markham Hislop:  Now I assume your organization talks to the utilities all the time. And one of the things that I’ve been interviewing experts about is the evolution of the utility business model because distributed energy and all of the technologies we’ve talked about are forcing utilities, whether they like it or not – and some of them really don’t like it – but they’re forcing them to rethink how they interact with customers, where they get electricity, how they manage their basic business.

The old vertically integrated, the cost-of-service model is no longer suitable and not everybody knows what to do. Is that basically your read on how utilities are coping with this?

Natasha Vidangos:  I think there’s a huge amount of diversity, but I think you’re right. There are massive changes in how the power system runs and depending on how the utility is regulated, the resources that it draws from.

In the United States, there’s a huge amount of diversity in this. If you’re talking about the Pacific Northwest, where it’s almost all hydro and renewables, down to other parts of the country where there’s a lot more reliance on fossil fuels. And it gets very custom to the specific utility in question.

But we do see some utilities that are really at the front cutting edge of this, and that are really excited to get in on what we’re calling “demand flexibility”, which is demand response taken to the next level demand management: load management, the sort of smart grid, more modernized way of approaching it.

Others who are waiting and seeing, who want to see how it goes – we’re at the stage where a lot of great case studies are starting to come out and demonstration projects are starting to come out, but it’s still not necessarily something widespread. So a lot of utilities are concerned about taking on major risks, especially risks that could potentially impact ratepayers. It’s not a small thing to take on some take on new investments.

And then there are some utilities that really haven’t stepped up to the plate. As of now, it’s the nature of the industry,

Markham Hislop:  Natasha, this will be the last question, and I really want to tie a bow around this conversation because for the average viewer, it’s been a little technical, but nevertheless, the message I want to send everybody home with and I’ll see if you agree with this. My hypothesis, if you will, is that the 2020s are going to be an enormously disruptive decade for the energy industry, particularly the electricity industry. And I’m curious to see if based on our conversation if you would agree with that,

Natasha Vidangos:  I think we’re probably looking at the same crystal ball. And I think the electricity sector really is going to be the route for us to reach greater decarbonization. It’s relevance, its importance, and the ability for us to do cool stuff with it will just be increasing in the coming years. So I agree. I think we’re going to see a Renaissance and using the power system to really deliver a lot more value to all of us and environmentally socially, economically across the board.

Markham Hislop:  Fair to say. And I I’ve had economists tell me this, that we are going to look back from 2030, and we’ll look back on 2020 and be astonished how much the second age of electricity has changed our lives and our economy.

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