The Institute for Electric Innovation’s (IEI) recent report, Rethinking Energy Efficiency as a Carbon Resource, resonates strongly with us at Uplight – it comprehensively articulates the opportunity for power utilities, regulators, and solutions providers to unlock a profound new level of energy resource. The author, Val Jensen, refutes the notion that efficiency has run its course and should simply pass the baton to zero-carbon generation technologies such as wind and solar. Rather, in order to achieve deep decarbonization, the power industry must double down on both.
The article’s thesis, that there is immense latent value within efficiency and demand side management (DSM), is the basis for the formation of Uplight. In July 2019 we brought together six companies and nearly 400 professionals committed to developing software solutions, enabling energy providers to motivate customers to make smart energy decisions in service of accelerating a clean energy ecosystem.
Uplight was honored to present additional perspective as an addendum to Val’s report. We focused our response on the five interrelated capabilities discussed in the IEI paper that characterize the next generation of smart energy programs: Data-Driven Insights, Personalized Offerings, EM&V 2.0, Pay-for-Performance, and Energy Orchestration. Today, Uplight partners with utilities to provide three of these capabilities to drive value across both sides of the meter: data-driven insights, personalization, and orchestration.
The other two, EM&V and aligned incentives, lie squarely in the realm of regulators. In our response, we focused on how regulators can reform their approach to EM&V and performance incentives to help lead us to a more sustainable future. In order to unlock the full potential of DSM, and keep up with rapid technology developments, regulators must shift from prescriptive to evaluative measures – aligning utility incentives with societal objectives. This would allow utilities and third parties to innovate with improved engagement experience, motivated by performance-based incentives. Programs would better shape customers’ buying habits of energy-saving products, change their usage habits, and ease their adoption of clean energy.
This would unlock a new “virtuous cycle,” in which utilities’ leadership see the benefits of strategic focus on DSM, putting the customer first and forming partnerships with key solutions providers to help them realize their vision. Small wins from improved utility programs encourage regulators to put in place measures that further decrease the gap between economically achievable and realized energy efficiency as a resource.
An example of this flywheel is already gaining momentum in Michigan. In October 2019, the Governor and the Michigan Public Service Commission launched MI Power Grid, a focused, multi-year stakeholder initiative to maximize benefits of the transition to clean, distributed energy resources for Michigan residents and businesses. Bolstered by this regulatory initiative, Consumers Energy’s customer-focused CEO launched a bold plan to eliminate the use of coal by 2040.
Backed by aligned incentives plus enhanced EM&V enabled by a territory-wide rollout of smart meters, Uplight and Google (whose perspective is also featured in the IEI Report) were ready to spring to action to start realizing small wins, incrementally moving the needle towards Consumers’ ultimate goal of providing a clean, resilient, and sustainable energy system for all its customers.
Read the IEI Report, Uplight’s point of view, and the perspective of other technology companies in the full report.