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Working From Home Is Here to Stay: How Can Utilities and States Adapt to the Impact on Energy Use and Greenhouse Gas Emissions?

Posted to Franklin Energy in the Utility Management Group
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Sabrina Oudin's picture
Manager - Residential Strategy Franklin Energy

Solutions and program design for residential utility customers, with an emphasis on low-income and underserved communities.

  • Member since 2021
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  • Apr 11, 2022
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Energy systems have served us well in the United States, driving unprecedented economic growth while supporting population and technological advancements. However, when COVID-19 shifted much of our work activity from offices to employees’ homes, it affected the grid and nationwide utility operations. Demand for electricity and gas rapidly changed. We began to see a transition in energy use that not only shifted peak demand across the day, but also shifted where and how energy was being used. Once a powerhouse of energy consumption, businesses and city centers shuttered, shifting energy use away from office buildings and toward residential neighborhoods.

And now, as we establish a “new normal” of daily habits and routines, utilities must determine which changes will continue and how to adapt.

Working Remotely is Here to Stay

Experts agree there is no going back to “the way things were.” The massive shift of employees working from home is here to stay.

Before the pandemic, only 3.4% of the U.S. workforce worked from home, but that number surged to 42% by August 2020, less than six months after the start of the pandemic. In a new report, the National Bureau of Economic Research predicts that 20% of all working days will be conducted at home even after the pandemic ends. 

Remote Work’s Impact on Energy Use and Greenhouse Gas Emissions

In 2020, U.S. energy-related CO2 emissions declined by 11%[1] and overall electricity consumption plunged by 20% or more. But at the same time, utilities reported increased residential demand since people were spending more time at home[2].

While remote work can reduce CO2 emissions and transportation costs for employees with longer commutes, “a day of working from home could increase household energy consumption by between 7% and 23% compared with a day working at the office,” according to the International Energy Agency (IEA). Energy consumption for daytime lighting, heating and cooling, and plug loads has shifted away from employers and on to employees and their energy bills as they spend more time at home.

In New York, the Independent System Operator noted a 2-18% decrease in overall energy consumption[3], while Columbia University researchers found a 23% increase in average apartment-level electricity consumption during the Monday-to-Friday 9am-to-5pm window in the same period[4].

Beyond the increased energy usage, spikes in residential demand can create other nasty side effects; In California, 2020 rolling blackouts were exacerbated by customers who spent more time indoors at home and increased their cooling demand during an August heat storm[5]. And in 2021, as we started to return to “business as usual,” energy usage began to increase. A recent study on electricity use found that the afternoon energy demand peak rose by 13% in Arizona in 2021, with overall residential energy use increasing by more than 10%. These rapid changes have caused utilities to struggle with managing load, creating power outages and a strain on grid infrastructure.

How can States and Utilities adapt to the New Normal?

The rapid changes in energy consumption caused by remote work create additional challenges for utilities to provide energy safely and reliably. But remote work also presents a tremendous opportunity to reduce GHG emissions, while offering customers more choice and control over their energy use. So where should utilities start when navigating this new terrain?

  • Utilities can support their commercial and industrial customers while reducing their own Scope 3 emissions by encouraging work-from-home days and the reduced commutes they offer. 
  • Utilities can offer more virtual services to customers, who may now prefer digital interactions.
  • Utilities can also provide additional support to customers who may be experiencing abnormally high bills at home. They should reach out and take advantage of this unique opportunity to interact with their customers as they seek additional solutions to reduce energy use during the workdays and the weekends.

Whether they’re working from home permanently or have shifted temporarily to a more homebound lifestyle, residential customers are looking for ways to take control of their energy use and their bills. And this is where utilities can really shine: Residential energy efficiency and demand response programs offer opportunities for customers to eliminate leaks throughout their home, improve their HVAC systems, and even change their habits to use less energy during peak periods.

To manage changes driven by the shift to a work-from-home economy, utilities can benefit from working with a trusted partner like Franklin Energy to design and implement the programs they need to evolve with the new energy reality.

Contact us to learn more about our innovative program offerings that drive personalized engagement, and maximize community and grid benefits.

 

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Franklin Energy
An implementer of energy efficiency and grid optimization programs, provides utility customers with a deep understanding of the customer journey and all the programs, platforms and products to stitch it together in a meaningful, customer-focused way.
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Julian Jackson's picture
Julian Jackson on Apr 14, 2022

Do you think that "home office" consumers will start to trend towards solar panels and microgrids, particularly in the sunnier states, now they have to pay for their own power (instead of it being provided invisibly by their employer)? How could utilities tilt towards benefitting from this trend?

Sabrina Oudin's picture
Sabrina Oudin on Apr 21, 2022

Hi Julian, Thanks so much for engaging in the conversation. I think there is certainly an incentive for "home office consumers" to investigate ways to reduce their bills during the day, especially across the southwest where the energy used during peak periods comes at a premium price. Now, the question is will solar panels and microgrids be the best way to reduce bills? I would argue that energy efficiency would be the best place to start. Insulating and sealing a home, and adjusting set-points of HVAC to be comfortable, but still efficient would make a big difference in a home's energy demand. Coupling this more efficient home with solar designed to reduce afternoon load would be the most cost-effective option. Utilities can benefit from this trend by acting as an advisor to their customers during these critical decision points. 

Happy Earth Day!

Paul Korzeniowski's picture
Paul Korzeniowski on May 11, 2022

Good points. The pandemic spurred technology adoption by as much as seven years. As a result, many organizations are now able to support remote workers. Inertia was another barrier, but as companies were forced to find ways to have employees work from home, they recognized that the anticipated downsides, employees slacking off, did not occur. Consequently, it has become a popular option, one that does reduce energy consumption. 

Sabrina Oudin's picture
Sabrina Oudin on May 12, 2022

That's exactly right, Paul. It will be interesting to see how this trend continues to change in the next few years.

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