California’s new target is to shift the equivalent of electricity used by 7 million homes from the evening to the daytime.
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Be bold and flexible

California’s Bold Flexible Demand Goal and Our Clean Energy Future

Cisco DeVries
August 7, 2023

In spite of repeated heat waves and threats of power outages, there is a big, new, and bold environmental goal in California, and it probably isn’t what you’d expect. State energy leaders want you to use MORE power. Whether it’s charging your car, turning up the air conditioning, making extra ice, or plugging in your iPhone, the need is for you to use more power – as long as it is during the day. 

That’s because California’s new target is to shift the equivalent of electricity used by 7 million homes from the evening to the daytime. This move will not only result in billions of dollars in electricity bill savings, but also prevents blackouts and expedites the transition to a zero-carbon grid. 

Specifically, the California Energy Commission has set a new goal of shifting 7,000 megawatts of energy usage from peak hours (4-9 pm) to off-peak hours by the year 2030. This bold and essential move once again positions the state at the forefront of a groundbreaking change in our transition to clean energy. By meeting this target, California can protect the grid from outages without needing to install a single additional solar panel, construct a new power plant, or install new poles or wires.  

California has done this before. The Load Shift goal follows a well-known leadership process the State played when it passed the nation’s first Renewable Portfolio Standard (RPS) in 2002. California’s original RPS goal required 20% of retail electricity sales in the state to come from renewable resources by 2017. After achieving that goal, the state raised the bar even higher, aiming for 60% by 2030 and ultimately 100% clean energy grid by 2045.

Inspired by California’s success, thirty-five other states and the District of Columbia have passed RPS laws – with 12 states now calling for 100% renewable energy. The RPS has been an unequivocal success: driving in-state demand for renewable energy development, leading to the nation’s largest solar industry in California, and resulting in a massive increase in renewable energy across the United States. Renewable power is now the cheapest electricity on earth, it sometimes meets nearly all of California’s energy demand, and the solar industry is one of the largest employers in the State.

But with that success comes new challenges, which is why California is now urging people and businesses to shift their electricity usage to off-peak times. We need to move electric demand from the evening, after the sun has gone down on our solar panels, to the middle of the day, when we have a surplus of cheap, clean power. 

This is particularly important because the demand for electricity is growing as air conditioning runs more often, people plug in their cars to charge, and climate change brings increasingly frequent extreme weather events.

California’s heat waves in 2020 and 2022 were historically intense and long-lasting, pushing the grid past its capabilities. Record breaking temperatures resulted in unprecedented demand for electricity, much of it to power home air conditioning. In 2020, the State experienced blackouts during the heatwave. Last year, it took every trick in the grid operator’s book, and the engagement of millions of Californians who reduced their power use, to prevent blackouts.

But even during those emergencies, it was only during a few hours in the evening that we needed to reduce or shift demand. The new goal of shifting electricity use from peak to off-peak times acknowledges that it is now cheaper and cleaner to shift when we use electricity, rather than building new power plants that will only be needed a few hours a year.  

This problem extends beyond California. The North American Electric Reliability Corporation, an international non-profit organization tasked with mitigating grid risks in the United States, Canada and Mexico, recently warned that two-thirds of North America could be at risk of grid outages this summer due to spiking temperatures and extreme electricity demand.

How does the State expect to shift electricity use? The combination of technological advances over the past decade and financial incentives allows us to orchestrate a shift in demand at scale. 

California took a step toward shifting energy demand in 2016 when it introduced “time of use” electric rates, which charge residential consumers a higher rate for electricity during the peak period of 4-9 pm and lower rates at other hours. When energy consumption is more expensive during peak times, people are incentivized to delay the use of appliances like the washing machine or dishwasher. This program has had modest success, but importantly has begun to teach customers that there is a “time value of energy” – that a kilowatt at 2pm is much cleaner and cheaper than a kilowatt at 7pm.

One of the easiest and most effective ways for most residential customers to shift their energy use is by “pre-cooling” their homes. Studies show that residential customers can shift at least 50% of their peak energy use to off-peak simply by turning their air conditioning down several degrees between 12 pm and 4 pm, and then and then allowing the AC to drift up several degrees between 4 and 9 pm. This reduces energy use during the more expensive evening hours without sacrificing home comfort.

Nearly 80% of California homes, which amounts to more than 10 million residences, now have air conditioning. Smart, programmable thermostats, an affordable technology that has experienced significant growth over the past decade, make it easier than ever to automate pre-cooling. By setting your thermostat to pre-cool your home, you can not only help stabilize the grid, you can save money on your electricity bill by using less energy during peak times.

That concept is just one of the many proposals put forward to meet our new load shifting goal. And as we add heat pumps, electric vehicles, and other electric appliances into our lives, the need for and the value of shifting electricity usage to daytime hours will become even greater. By embracing flexible demand, we can all play a part in the clean energy future – saving energy and money while making the grid more reliable. 

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