Energy in 30: How innovations are helping to drive the industry transition

So, at this later stage of my career, it's been really interesting to see how buildings have become a very important part of making our grid cleaner, right? So, we're installing more variable renewables—like wind and solar—and buildings use about 75 percent of the electricity that the grid produces, so everybody's starting to pay a lot more attention to buildings. On the flip side, as building researchers pay a lot more attention to the grid, this buildings-to-grid interface has really been kind of the key focus for us for over five years, I would say, and increasingly so, as we're trying to decarbonize both the building stock and the grid.

So our group, Residential Buildings Research—I think the title tells, we focus on residential buildings and everything from applied research at the component level—think heat pumps, water heaters, controls—all the way up to communities, and even bottling the entire housing stock of the country and looking at different scenarios for decarbonizing the housing stock.

And we also are very active on the deployment side, helping the Department of Energy get some prizes on the street for energy efficiency innovations. We are also helping with a program called “Building America,” which is getting rebooted with a focus on retrofit. Industry teams are spanning out across the country, looking for opportunities to do applied research, deployment, and working with communities.

And then also, there's quite a bit of technical assistance that's being made available to communities at this point that are working on their decarbonization plans, either planning them out, just getting started, or in the implementation phase, and trying to figure out the best path forward. And so we have researchers that are using modeling and other resources to help those communities.

Greater focus now placed on renewable energy deployment efforts

David: That's quite a spread of activities and very impressive.

Dave: Yeah, it's interesting. There's quite a bit of emphasis on deployment right now. I think you've probably heard the Secretary of Energy, Secretary Granholm said: "Deploy , deploy, deploy." And that's kind of her mantra at the moment. It's interesting to see that ramping up and trying to help with that by bringing best practices and technical resources to that effort. But at the same time, keeping the research going and looking for new technologies and new solutions to support all that.

Joan: And, Kevin, you were recently out there, right?

Kevin: Yeah, that's right, Joan. In fact, we had several of our utility clients with us. And to your point, Dave, and all that work you're doing, it was really a great shot in the arm for all of us just to see how much is going on and connecting the dots between NREL and utilities and using all of the latest and greatest technologies and all of the delivery strategies. It's exciting to see what's coming down the pike, and really looking forward to working more with NREL on a lot of these great projects.

Load flexibility plays an important role in energy efficient buildings

David: So, Dave, you and I go back decades.

Dave: Yes.

David: We were probably some of the first attendees at the initial RESNET [Residential Energy Services Network] conferences back in the day, and I know we had our share of doing a lot of energy modeling, initially DOE-2 then EnergyPlus. When you were talking about the impact of buildings on the grid, that immediately brought to mind grid-interactive efficient buildings [GEB]. Could you talk a little bit about what you and your team are doing around that and how modeling may play in that role?

Dave: Certainly. Load flexibility is of great interest now. A couple of things we've done is we developed a home-energy management system called foresee™, which won an R&D 100 Award a couple years ago. foresee™ combines occupant preferences. So it's kind of a set-it-and-forget-it approach, where a homeowner or occupant of a building can say how much they want to be influenced by or how much they want to respond to, say, energy cost, if you're on a time-of-use rate, or if you want to be responsive to carbon signals, what the carbon intensity of your utility is at any given moment. And then, it uses machine learning and artificial intelligence and information about the weather and what it's learned about the building to make decisions. It tries to optimize across your solar system, your batteries, your space heating system, and your water heating system to deliver the comfort that you want and respond to those carbon and cost signals to the extent that you want it to. So, that's one way we're looking at flexibility.

Also, we’ve been looking at things like storage and control of hot water systems. You can store energy in a hot-water tank—like a heat pump, a water heater—and keep it from coming on during peak periods. You can pre-cool or pre-heat space. So, controlling for all of that. Also, we’re looking at things like phase-change materials and building components, either in walls or even embedded in the HVAC system, to give you some storage that you can utilize to avoid peak and flex your loads.

David: That's pretty wild. Is that close to real-time use, or is it still being experimented around?

Dave: I'm not aware of any commercial products out there yet. We're working with some startup companies, particularly in the embedding or integrating the phase-change materials with HVAC equipment. I don't believe they have anything on the market at this point.

David: Definitely something I want to watch for.

Dave: Yeah, it's coming. Yep.

The evolution of the value proposition in energy market transformation

Kevin: That's a great point, David. And when I think about all this stuff coming, I feel like the one reason why it's going to be viable is because the whole equation, or I should say, the value proposition of transforming the market, has really evolved. Where 15 years ago, we were just considering the small amount of technology that was available at the time, and then cost-effectiveness applied on top of that. But now, we're looking at so many more components of that.

And, Dave, when we visited, I think you really summed it up best when you shared that value proposition evolving to now—considering controls and thermal storage, HVAC, the envelope, battery storage—and then the nucleus of all of that being not just cost-effectiveness, but also equity and carbon reduction. So, that really kind of opens up the amount of paths that we can take to making this all happen.

Dave: It's really interesting to focus on wind energy use. For a long time, it was all about the total annual energy use in a year. So even going back—David, you were mentioning RESNET and the home-energy rating system—it is all based on annual energy use. So, anything where you might store energy and use it at a different time it's getting no value in the market. And more recently, we developed—I'm still active on RESNET committees—we've developed the CO2e index, which is the carbon dioxide equivalent index, so that now gives you credit for any kind of technology that would reduce the carbon impact in the home.

David: That's awesome! I am so glad to hear that.

Joan: And with the energy management stuff—I was involved with NREL a little over a decade ago, around some of the smart-grid activities—and as AMI [advanced metering infrastructure] is still being deployed, I'm curious about your take on that. Do you feel like those deployments now, the investments, are gaining a return as some of these new initiatives start to take hold?

Energy efficient tools and training help homeowners respond to new initiatives

Dave: Well, I feel like we're seeing time-of-use rates slowly work their way into the residential market. Traditionally, they were available, but not widely used. And I know here in Colorado, Xcel Energy put in AMI meters and then moved us on to a time-of-use rate. And that got my attention. I pre-cool the house—the air conditioners are off during their four-hour peak period—and I coast through it. So, I think these time-of-use rates will certainly help bring things to market, right? The technologies that can help homeowners respond.

David: I don't want to pick on any one utility in particular, but I'm curious from a personal perspective, did Xcel do anything to kind of educate you as a customer? "Here are some strategies you could do to both make sure you can lower your bills and maintain your comfort with the new time-of-use rates?"

Dave: They definitely sent quite a bit of stuff in the mail previous to the time-of-use rates, taking effect with some strategies, "Don't run this, don't run your dryer, don't run your dishwasher during the peak periods." I don't recall them talking too much about pre-cooling and coasting. I think they talk about basically keeping your set point temperature higher during the period.

David: Yep. Interesting.

Pilot programs and lab-based approaches are vital for industry growth

Joan: It really is. I think Arizona sets a standard for that. We've had time-of-use rates for years, and I can tell you, I adhere. It makes such a big difference.

But I have a question for both of our guests, and that is why is a lab, or this approach—and, Kevin, you as well in terms of incubators and pilots—why is this so important to the industry?

Dave: Well, I think it's hard for the industry to undertake fundamental research, applied research, in a lot of cases, and so the support from the Department of Energy to allow us to do this kind of research in the laboratory setting has a lot of value. We are at NREL, and DOE broadly, but at NREL, very interested in getting technology out of the lab and into the hands of the industry, and also helping industry and incubators bridge the Valley of Death, right? So we kind of play two roles there. One can be helping a new startup with its own innovation, prove that innovation, mature that innovation, and get more traction toward putting it in the market and getting across that valley. And vice versa, if we have technology, we're constantly looking for partners to take that on, license it, and take it to market.

Kevin: I agree. It's a great point, Dave. And when I think about this type of thing, I try to look at it from a typical energy user's or customer's perspective. And the incentive is there with a time-of-use rate, but at the same time, not everyone is an energy nerd like we are, right? So we think about how we can reduce that load during those peak hours. But I think for the average customer, these technologies are going to allow them to do it without even thinking about it. And that, to me, is really exciting because I don't have a completely intelligent home at this point. And when I think about what I would need in order to automate the system and make it as simple as possible for the end user, we need to make sure that we're combining all these technologies together to give them the power to do those things.

Dave: I agree with you that we don't want to get a message on our phone that we have to do something. We'd rather be autonomous, right? And respond to signals without our intervention minute to minute.

One concern I have about some of this automation and responding to price signals is the question of equity that we want solutions that are for everybody, and that's not just people who have enough money to put these systems in to respond to time-of-use and keep their costs down and leaving others behind. So, I'm very cognizant of that at the laboratory.

David: Excellent point. What opportunities do you see, Dave, for utilities to collaborate with NREL?

Dave: We work with quite a few utilities at the laboratory, quite a bit on the supply side, but also increasingly on the demand side as buildings are being recognized as a big part of the solution. So, for example, we did a project with the Los Angeles Department of Water and Power, LADWP—the largest municipal utility in the country—and they wanted a plan to get to 100% renewable energy by 2045. So, we ended up modeling all the buildings in their territory, and their entire energy grid, and looked at solutions from every perspective—different scenarios from energy efficiency and demand response to higher penetrations of renewable on their grid, distributed energy resources across their distribution system to larger transmission lines out to the desert for more solar. So, we looked at quite a bit of scenarios and provided those to the utility for their planning purposes.

Joan: What a resource!

Kevin: No question about it, Joan. And with ICF, we're working with utility clients to determine ways that we can work more closely with NREL, because you've probably heard me talk about connected communities, sometimes referred to as high-performance sustainable communities, and we're working currently with a Midwest utility in doing just this. So the utility is viewing it as a way to partner with municipalities, developers, and contractors, and provide that white-glove treatment for making sure that communities are built with all of the stuff that we're talking about in mind. And NREL literally wrote the book on high-performance districts and communities—and it's available online, in fact.

And we're actively identifying ways that we can work with NREL and making sure that our utility clients are providing the grid as a service and really partnering with municipalities and developers in creating these high-performance districts and communities.

Ensuring equitable access to technological innovations is imperative

David: So a question for anybody. Going back to Dave's concern around equity and ensuring that low-income and disadvantaged communities also have access to all of this great stuff that we've been talking about, WiFi has historically been limited with low-income communities, and yet a lot of the technologies that we've been talking about require that to be controlled. So how do you solve, for that? Has there been any solutions or any thoughts about how to address that?

Kevin: We have a number of utility clients that have been actively looking into this, one of which being Public Service of Oklahoma, who actually, Jeff Brown was a guest on your show earlier this year, and you guys did discuss equity. And I have to say, this is front and center for many of our utility clients.

So, we're doing research behind the scenes to make sure that we're targeting some of these harder-to-reach customers and figuring out a way to leverage some of the federal funding and some of the other impetus to get these programs and offerings to harder-to-reach and lower-income communities. I think that the wave is building, and due to the utilities’ desire and the legislation recently passed in IIJA [Infrastructure Investment and Jobs Act] and IRA [Inflation Reduction Act], we're seeing that wave growing.

David: I totally forgot about the broadband access funding that's available. That's a good point.

Dave: I think to talk to equity a little more broadly, when we finished up the LADWP100 study, the city council came back and asked for us to do another round with a lot more focus on equity. And so that project is just now wrapping up, but looking at things like rate structures that would help underserved communities looking at cooling, adding cooling to making sure they're getting the benefit from cooling in underserved communities. So, they came back and the project, I think, was actually called LA100 Equity, so kind of doubling down on that in the second phase.

David: Awesome.

Joan: How wonderful. Well, David, as predicted, this could go on—

David: I know, right?

Joan: —for a while, but do you think I have time to sneak in our last question?

David: I think you do.

Joan: All right. So, I'd like to ask you both. And, Dave, let's start with you again. If you could do one thing to change the industry, no limits, what would you do?

Dave: I would like to see energy built into our home mortgage system. We're all familiar with PITI—principal, interest, taxes, and insurance—[I’d like to] add “E” into that equation. So, anytime you're sitting down looking at the purchase of a home—anytime a lender is looking at qualifying you for a home—energy is squarely in the discussion and equation. And I think it would be a very simple change that would have a tremendous impact and add incredible value to energy efficiency in our country.

Kevin: Yeah, Dave, I completely agree with that. And actually, my answer is very similar, except rather than taking the perspective from the mortgage industry, I’d look at the state regulations and the state regulators. I think the majority of our clients are becoming more and more progressive in establishing decarbonization goals in line with many of the municipalities throughout states within their service territory. And it seems that not being able to bundle offerings because budgets are coming from different organizations within the utility has presented a challenge. If we could really allow utilities to take a more holistic approach to make sure that we're leveraging all the technologies and all the delivery strategies together to make a more cohesive ecosystem, I think we'd all be a lot better off.

David: Very true for both of you guys. I really have loved this conversation, and we covered a lot of ground, right? From deployment focus; and some of the grid interactive; efficient building; work that you're doing, Dave, at NREL, including foresee™; new stuff coming down the road; phase-change materials; fascinating some of the sustainable community stuff that Kevin's doing; time-of-use rates; equity; and just wrapping it up with the focus of energy in everyday life, especially when it comes to the cost of living and hopefully homeownership. So, it was a fascinating conversation, and thank you both for being here.

Dave: Thanks for inviting me. I really enjoyed myself.

Kevin: Thanks, David and Joan. And, Dave, you haven't heard the last of me; I can't wait to work with you. It's really been a pleasure so far, and I really look forward to the future.

Joan: Really appreciate both of you being on.

David: And, if you've enjoyed this conversation, we sure would appreciate you liking, sharing, and even subscribing to our podcast.

Joan: And you might also be interested in tuning in to our next episode, where we will talk with the co-authors of “The Decarbonization Imperative: Transforming the Global Economy of 2050.” Have a great day all and catch you on our next Energy in 30.