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Demand Flexibility as a Decarbonization Solution for Europe

As renewable energy takes on an ever more important role in the global energy mix, grid operators will need new tools to skillfully manage intermittent and location-sensitive distributed energy production.

Demand flexibility, which includes efficiency, electrification and demand response, is one of the most important of these new tools. By using smart meter data and open-source analytics, utilities and other load-serving entities now have the ability to procure demand flexibility, which measures the change to load shape rather than monthly savings, in ways that can turn changes in energy consumption into a resource that fits into and facilitates the rapid evolution of the grid.

On Wednesday, the IEA hosted a half-day meeting on Demand Flexibility in Europe that included regulators, business, and advocates from across the European Union, to discuss the future of energy efficiency as a grid resource, and how the value of saving energy is giving way to flexibility and shifting of load. OpenEE CEO Matt Golden gave a featured presentation at the meeting.

In a particularly illustrative example, one participant discussed how a recent energy audit of their home suggested that they replace an electric tank hot water heater with a tankless unit, in the name of efficiency.

While this type of advice follows the tradition of energy efficiency as conservation, it's a clear example where the drive to reduce consumption may be getting in the way of the much greater need for flexibility. When combined with smart controls, an electric water heater with a tank can be used to store energy during the time periods when clean electrons are cheap and plentiful on the grid, in order to reduce consumption during periods of system peaks when electrons are comparatively dirty and expensive. It was a clear real-world example where traditional energy efficiency may actually be working against our need for flexibility and decarbonization.

This was also the message OpenEE CEO Matt Golden delivered as part of the opening plenary panel for the third annual IEA Global Conference on Energy Efficiency in Paris.

Flexible Demand as a Resource

The conference, which included ministers and high-level government officials, business leaders, financial institutions and non-profits from over 60 countries representing 80 percent of global energy consumption, focused on action and delivery of scalable efficiency policies and programs. The conference was informed by Energy Efficiency 2018, the most extensive analysis the IEA has ever conducted on energy efficiency. The IEA's analysis explored how energy efficiency can reduce global energy demand and provide more than 40 percent of necessary greenhouse gas reductions to meet Paris Agreement goals across all key economic sectors while delivering multiple non-energy benefits by 2040.

Among other findings, the report highlighted the importance of several innovations that are at the core of OpenEE's business vision, including the need to dramatically scale private sector efficiency investments. The report also cited the growth of pay-for-performance (P4P) programs in California, New York, and Vermont as some of the most significant policy innovations. OpenEE is a leader in P4P efficiency and provides a platform that is designed from the ground up to support P4P efficiency programs within a multi-node decentralized network.

You can view Matt Golden's presentation below.


Want to know more about how efficiency as a resource can complement distributed clean sources of energy? Contact us.