The Lowly Thermostat, Now Minter of Megawatts
technologyreview.com
technologyreview.com
I'm all for helping lower peak demand, but if the utilities are going to be saving billions, I think this should reflect an ongoing savings for the customers, too.
The consumer clearly benefits from not air conditioning an empty home.
But, the article conflates this with "demand response" -- which is more about time-shifting your electrical usage to avoid peak times than it is about reducing your energy usage. The meter will read the same, but it's a huge benefit to the utilities.
A simple way to fix this: price energy more expensively during peak times.
In Chicago you can opt into a program where you pay real-time pricing for electricity. This price can swing from 0.0c/kWh during overnight summer hours when peaker plants need someone to burn off wattage, and I've seen it go over $1.00/kWh during heat waves or when the south is having a freezing snap and everyone is running their heat pumps down there. Standard users pay about 7.5c/kWh.
While the Nest doesn't connect to this pricing, ComEd also offers an optional breaker box (connected via cellular radio) to cycle power to your A/C compressor for short periods of time when the price exceeds a certain level (i.e peak summer demand). So this kind of automatic control exists without needing the Nest infrastructure in place.
In the meantime, I've saved about 15% off my standard bill with a little bit of diligent dumb-thermostat programming. I'm planning a more intelligent system of my own that can watch pricing, house occupancy, and weather forecasts to try and beat that statistic.
No wonder it's not particularly popular.
Although this is something you have control of as well. For the right amount of money, I can arrange to be out with my friends when it is hottest, then come home later. :)
This is where a more intelligent system than the Nest could be beneficial. I'm not for the power company modulating your use but if you had a system that cooperated locally with your habits I think there's a lot of potential. Nest is 50% there.
But if you know anyone selling a cheap commercial ice maker I'm all ears.
A simple way to fix this: price energy more cheaply during off times.
If you've hit 100% capacity there's nothing you can do except start blacking out neighborhoods. The solutions to date are to a)fire up "peaker" plants which are hellishly expensive to operate but keep the lights on or b)buy surplus power from other markets on the open market. And that price will not be the standard price.
If the consumers paid the spot price and realized their air conditioner now cost something like $10/hr to run, I bet you demand would come down. The problem is that this would completely screw over those that can't adjust their demand in the process.
The article only says the utilities will save 'billions'.. so this may be fair or not.. without additional info, how can you say?
First off, Nest is a business, they're looking for revenue out of this.
Secondly, $85 = $25 + 4 years @$15/yr. So in essence Nest only makes money on this after 4 years. As cool as Nest is, it's not unreasonable to assume that if this catches on other companies might pursue similar programs. Which means that Nest user might be swapping out their thermostat in 4 or 5 years for the then-newest thing.
$85 to the customer doesn't seem like such a bad deal in the grand scheme of things, and as others have said, the customer gets other significant benefits out of the Nest thermostat all along the way.
[1] - http://www.enernoc.com/our-resources/brochures-faq/faq-tenne...
Seems less invasive than tracking when I tend to be home or not home. Next up, they'll track where I'm driving and only turn on the heat/AC when I appear to be heading home. I wonder who else would find that kind of info useful.
Hopefully they can help the rest of the world become more energy efficient. Thermostats are not common outside the US.
Do you have a source backing that up? I was in Germany last summer, and they seemed to be just as ubiquitous. (both in Berlin and Munich)
Asia: I have traveled for months in China, India and Japan and don't recall seeing any thermostats, aside from hotels and commercial spaces.
Europe: no A/C in most countries (aside from commercial projects). They make extensive use of residential heating using liquid pipes that pass through the building. In southern europe split ductless A/C systems are common.
South america: I believe they have both central air and split systems.
USA: central air everywhere!
Africa: no money for A/C. ;-)
The split systems are much more energy efficient, so they should be gaining ground.
This is an attempt to find a consensual market solution to the problem of building expensive peaker plants that operate perhaps a day a year. The marginal cost of electricity generation capacity is astoundingly high.
Part of Nest's angle is that Nest can learn and detect whether you are home. This lets the thermostat save you money when you're not home - and this is the key - it does so without any thought or input or effort by the customer.
I'm also somewhat skeptical of personal batteries being used to save on your electric bill. If it's worth it to peak-shave with batteries, it's almost certainly going to be more effective for companies to do it at scale and with expertise. The only reason it might make sense for consumers to do it is because of the retail-wholesale pricing difference, but if home batteries become popular, you can bet that loophole will be closed.
Source: I used to work at a utility
P.S. Another big problem is systems control. It is very hard to predict how decentralized actors will work side by side. For example, you don't want to change the price of electricity by a cent and then have 10 MW of demand instantly come on across the state just because everyone's Nest price threshold was hit. There are many plausible sounding solutions to this problem (price fuzzing, delays, subpenny pricing), but they have difficult edge cases as well.