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Berkeley's Building Electrification Mandate Puts Strategic DSM Front of Mind: Part 2

Jessie Mehrhoff
Aug 02, 2019

Smart Cities 2

Part one of this blog series covered the July 2019 decision in California by the Berkeley City Council to mandate that all new residential low rise buildings exclude natural gas infrastructure, beginning January 2020. The City Council’s decision emphasizes the broader trend toward electrification seen throughout the global demand side management (DSM) market. While admirable from an emissions reduction standpoint, rapid and large-scale electrification of buildings can strain aging grid infrastructure.

The concept ofbeneficial or strategic electrification provides a solution to these concerns. This seeks to assist utilities and grid operators in designing programs with locational and time-specific programs to reduce concerns surrounding grid reliability that follow the deployment of technologies that rely on grid-delivered electricity.

Energy Efficiency’s New Role

As buildings like those in Berkeley become 100% electric energy efficiency programs will take new forms. Traditional efficiency programs will be focused on building retrofits and the replacement of inefficient appliances with newer, low energy ones (i.e., incandescent light bulbs replaced with LEDs). Beneficial electrification, however, provides new opportunities to revamp and more rapidly scale energy efficiency programs with a focus on both utility energy savings and improved customer satisfaction.

From hybrid electric water heaters to heat pumps to ENERGY STAR electric appliances, lowering technology prices will allow customers and building management companies to choose an appropriate technology from a greater variety of models. More of these efficient technologies can connect to the grid to provide customers with the opportunity to participate in Bring Your Own Device (BYOD) programs.

Some BYOD programs integrate energy efficiency with other DSM programs like demand response (DR). Investor-owned utilities (IOUs) have specific integrated DSM (IDSM) budgets in California. Where other states may not have specific IDSM budgets, IOUs are leveraging the installation of new devices like smart thermostats to drive energy efficiency and participation in DR programs.

New Business Models and Strategic Electrification Technologies

The integration of energy efficiency with other behind-the-meter (BTM) initiatives is not the only thing to drive beneficial electrification. My Navigant Research colleagues Brett Feldman and William Tokash recently covered a slew of strategic electrification technologies poised to help green the grid in the 2019 issue of AESP Magazine.

Distributed solar PV tied to energy storage may be directly supporting building electrification. In markets like California or Arizona where excess solar generation is common midday, customers can store low cost solar energy onsite in storage systems. They can then draw from these storage systems when the grid moves toward an evening peak.

EVs in markets like Berkeley, California will continue to displace traditional fossil fuel-driven transportation. With appropriate residential and commercial charging infrastructure, EV batteries may also be able to charge at strategic times, off-taking excess power from the grid or charging at off-peak hours. Where vehicle-to-grid (V2G) two-way communication between battery storage and the larger electricity grid is still nascent, organizations like Pecan Street are testing V2G applications in US states such as California, Texas, and Colorado.

Policy and Technology Can Spur Innovation in Tandem

Technologies like solar plus storage and EVs are just a few of those driving of beneficial electrification. These tools can help to support city councils, like in Berkeley, as they move toward clean, distributed energy and reduced climate change emissions.

The Berkeley decision may ultimately prove to be a complimentary case of regulation and technological innovation, where both factors initiate the move toward a clean, intelligent grid. As more cities and states adopt local electrification legislation, the more rapid development of BTM technologies and associated grid operator programs will help to safely meet the growing demand for efficient, electric technologies.