Drastic disruptions are underway in the energy market

It’s 6AM and I’m rolling out of bed. But before my feet hit the floor, my “home energy management agent” is negotiating with the California Independent System Operator (ISO), the nerve center controlling the flow of electricity on the grid.

Normally, I’d get my coffee first and then jump in the shower. But my personal agent has alerted me to the fact that a hair-trigger condition has developed! There is a hydro plant in the Sierras getting ready to ramp up production to meet the morning demand. I’ve already told my agent that it’s OK to request that I rearrange my schedule in modest ways, so it’s concluded that if I (and enough other homeowners!) can hold back on energy consumption for 10 more minutes, the hydro turbines won’t need to open, and the reservoir won’t need to be drained further.

[One of my passions is kayaking in the lakes and reservoirs of the Sierras, and I hate to see the water level drop.] As I jump out of bed, a text suggests that I “shower first, then coffee!”

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With an aggregate impact of small decisions made by homeowners like me all over the state, we succeeded in averting the need for that reservoir to drain further…at least for today. This vision will become reality. But for now, we lack the ability to directly influence our energy sources, and we certainly have no way to express environmental priorities in such transactions.

When you flipped on your light switch this morning, where did that energy come from? What were the environmental impacts of its generation, transmission and use?

All energy sources have externalities that many of us are passionate about: emissions from burning fossil fuels, groundwater contamination related to oil and natural gas extraction, impacts on fish migration for hydropower and desert habitat disruption for solar, just to name a few.

Unfortunately, there is no way, today, for the full set of impacts of our energy use to be collected, and no way for people to express their values and communicate them to system operators, so that they can be incorporated into decision-making.

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How would you balance the benefits you derive from your energy use with the true economic and environmental costs, if you had that information and could choose exactly where your energy comes from?

There are, though, emerging technologies that will alter these legacy dynamics. Instead of captive consumers with few energy choices, we are fast becoming active participants in the energy markets as generators, demand-response agents and ancillary service providers. Our energy resource mix is increasingly coming under our control as we put solar on our rooftops and proactively shift our demand from gas-powered to electric vehicles or our home energy mix between electricity and natural gas.

The cost of energy storage continues to decline, promising increased flexibility in the way we use power from renewable sources. New sensing and analytics technologies allow us to monitor and measure environmental impacts and energy use benefits to a degree never before achievable.

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