In partnership with PLMA, this group is for practitioners from energy utilities, solution providers, and trade allies to share load management expertise and explore innovative approaches to program delivery, pricing constructs, and technology adoption.

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Financial Incentives for Load Management?

Todd Carney's picture
Writer Freelance

Todd Carney is a graduate of Harvard Law School. He holds a Bachelor’s degree in Political Science and Public Communications. He writes on many different aspects of energy, in particular how it...

  • Member since 2021
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  • Jan 25, 2023
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Global problems such as extreme weather and wars are pushing all nations to the brink in terms of energy. As a result, all nations have to try new initiatives to save energy and practice load management overall. The United Kingdom, a nation with many similar dynamics to the United States, just tried a new initiative. Twenty six companies offered discounts to people who used their electricity less. This initiative provides a potential solution for the United States in load management.

Energy providers in the United Kingdom started this initiative right now because they are facing particularly cold weather right now. In order for people to know if they were eligible, they needed to check to see if their provider was participating. Actions that people could take were not using heavy appliances such as a washing machine or charging an electric car. It was estimated that the most people could save was 20 pounds, which comes out to about 25 dollars. In order to be eligible, people needed to have smart meters. 

The National Grid found that 1 million homes and businesses agreed to participate. This exceeded their expectations. Their hope is that this kind of engagement will get more people to practice energy saving techniques.

Beyond saving money, this initiative also had the benefit of preventing a national blackout, something that everyone would obviously want to avoid. The other major initiative that Britain needed to engage in was relying more on coal plants. Britain had tried to faze them out in an effort to be more environmentally friendly. While most would likely consider that better than a blackout, many environmentalists will likely be upset on this reliance. 

The UK has an estimated 19.3 million families. So one million households is only a small fraction of the country. But, there is nothing to say that all families or even a majority of families need to participate in this initiative. To match the UK’s level of engagement, the US would need about 6.4 million families to participate. Saving up to 25 dollars every now and then will likely mean different things depending on a family’s situation. This could be a boon for a family struggling to get by, but the inconvenience is likely not worth it to a wealthier family. The wealthier families might be using more energy, so the initiative could have a limited impact in that regard. There is also a question of how many households actually have smart meters. 

The UK’s initial success offers some promise, but there needs to be a lot more information provided before anyone can conclude it has real scale and can work in the US.

 

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