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What's the Value of an Air Conditioner?

Amid so much talk about renewable energy and batteries on the electric grid, it’s easy to forget how much energy storage is already on the grid, and I’m not talking about hydro plants. It’s distributed everywhere, and it has been for decades. It’s in our refrigerators, it’s in the air in our buildings… it’s the “thermal mass” of the temperature-controlled spaces that we have come to expect from modern conveniences. There’s enormous latent value in this storage that is not being extracted.

One of the big players on the grid is the humble air conditioner, found in 87% of homes and consuming 12% of electric power in the US. According to the EIA, “the growing use of air conditioners in homes and offices around the world will be one of the top drivers of global electricity demand over the next three decades, according to new analysis by the International Energy Agency.” Electric load is still highly correlated with hot days - meaning it’s these devices that place a significant stress on the power system. According to Debbie Lew, there’s a paradigm shift coming. And it isn’t about renewables. So why aren’t we talking about it more?

Many grid operators treat loads as inflexible and static. And while there are some good reasons for doing so -- to reduce the complexity of an already complex grid -- but this neglects the tremendous flexibility and value that loads offer. I’m not talking about demand response (DR) as we know it today. Conventional DR programs require hours of response, which could mean an uncomfortable interruption on hot summer days, and they require minutes to hours of advanced notice.

Imagine having 10-15 minutes of response at all times that could be deployed in seconds or less. This would have tremendous value - especially in grids with lots of renewables. A fast but relatively brief response buys time during emergencies to make more effective and economic adjustments to the power system. And in the case of air conditioners, consumers wouldn’t even notice an interruption, thanks to the inherent thermal/energy storage. This allows grid operators to stop burning fuel (and cash) and reduce emissions on units that are online “just in case” there’s an emergency on the grid where power is needed immediately.

So this resource is already “installed”. It’s distributed. It’s everywhere. And it’s far cheaper than a battery. So why hasn’t it been done already?

There are a host of control and coordination challenges to integrate such a service on the grid. And will this highly-distributed approach scale? Will customers agree to participate? Will utilities come to rely on these services to keep the lights on? While these are not trivial challenges, they can be resolved.

And by the way, it’s not just air conditioners but any host of interruptible loads, including electric vehicles, pumps, refrigeration. This value can be extracted in a way that meets or exceeds the performance of alternatives today like conventional generation, batteries, flywheels, pumped hydro storage, etc. And we believe it can be done at an order-of-magnitude lower in cost. So when you fire up your air conditioner for the coming warm months, consider how much more value it has to offer.

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