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Recent Partnership Creates New Way to Participate in DR

Daniel Talero
Aug 27, 2019

Smart Home

A new partnership promises to shake up residential demand response (DR). Traditionally, many residential DR programs have been utility-run and depended to varying degrees on direct load control. However, the combined capabilities of appliance technology and real-time price aggregation platforms have created a new model for residential customers—a direct-to-grid, wholesale DR auction mechanism. 

New Partnership Breaks the Mold

Google Nest, the main product line for Google’s smart home division, has partnered with real-time energy trading and pricing monitoring from software startup Leap. Nest thermostat customers within Pacific Gas & Electric’s California service territory enroll in Rush Hour Rewards, Google’s peak energy use reduction program. As an additional incentive, Nest customers can receive a Google Nest Hub smart speaker device for enrolling in the program.

Rush Hour Rewards’ market innovation comes from its data source. Automated program alerts reducing customer energy use link directly to price signals from Leap’s Distributed Energy eXchange platform, which in turn follows hourly demand reduction targets set directly by state grid operator (California Independent System Operator). Google Nest joins a diverse portfolio of energy-sector partners—storage, thermal storage, EV charging, and more—already participating in the Leap eXchange. The platform aggregates partner assets into a single API, creating a unified response to price signals and load reduction verification.

With this Google partnership, Leap uses more than 2,500 enrolled residential Nest thermostats to directly provide additional real-time, flexible demand capacity to the California wholesale market. 

Opportunities for Vendors, Homeowners

This partnership reflects the increasing credibility of smart appliances as a source of DR capacity, presenting new opportunities for vendors. It also suggests the potential of open, hardware-agnostic data platforms to facilitate partnerships with smart appliance vendors. Homeowners offered time-of-use rates or certain peak rates can see cost savings during a DR event. Utilities can welcome a more flattened duck curve load profile for the state, particularly during high demand, after-work evening hours. With the increasing importance of DR in load management during heat waves and other peak events, this pilot project could be a model to follow.

For more information on residential DR, see the Navigant Research Leaderboard: Residential Demand Response report.