The utilities pay Nest $25 + $15/year for each Nest owner that agrees to sign up, while the owner gets a one-time $85 rebate. Excuse me?
I'm all for helping lower peak demand, but if the utilities are going to be saving billions, I think this should reflect an ongoing savings for the customers, too.
It depends on which Nest feature we're talking about.
The consumer clearly benefits from not air conditioning an empty home.
But, the article conflates this with "demand response" -- which is more about time-shifting your electrical usage to avoid peak times than it is about reducing your energy usage. The meter will read the same, but it's a huge benefit to the utilities.
A simple way to fix this: price energy more expensively during peak times.
In Chicago you can opt into a program where you pay real-time pricing for electricity. This price can swing from 0.0c/kWh during overnight summer hours when peaker plants need someone to burn off wattage, and I've seen it go over $1.00/kWh during heat waves or when the south is having a freezing snap and everyone is running their heat pumps down there. Standard users pay about 7.5c/kWh.
While the Nest doesn't connect to this pricing, ComEd also offers an optional breaker box (connected via cellular radio) to cycle power to your A/C compressor for short periods of time when the price exceeds a certain level (i.e peak summer demand). So this kind of automatic control exists without needing the Nest infrastructure in place.
In the meantime, I've saved about 15% off my standard bill with a little bit of diligent dumb-thermostat programming. I'm planning a more intelligent system of my own that can watch pricing, house occupancy, and weather forecasts to try and beat that statistic.
It works really well if you have a programmable thermostat (Nest or otherwise). Particularly if you are at work during the high afternoon temperatures. If you're at home frequently during those periods, or in an area where it does not cool off until 9 pm, it probably does not make sense. A high insulation rating helps, too.
> If you're at home frequently during those periods, or in an area where it does not cool off until 9 pm, it probably does not make sense.
Although this is something you have control of as well. For the right amount of money, I can arrange to be out with my friends when it is hottest, then come home later. :)
Like I said, I've saved money with the program. If you're not able or motivated to monitor your usage and the current price then yeah, it's not going to work.
This is where a more intelligent system than the Nest could be beneficial. I'm not for the power company modulating your use but if you had a system that cooperated locally with your habits I think there's a lot of potential. Nest is 50% there.
I'm on RRTP too. I've saved > 25% using it in the summer. In the summer (for example), I'll crank it down to mid to low sixties overnight (it's pretty cheap) and give it one final kick down to high fifties / low sixties just shy of 6 am. Then set it for 76 or so for most of the day (If it's pretty hot and the temp has drifted up I may do a mid day cooling for a short bit)....then kick things down again at 8 pm or so. You can follow the pricing here: https://rrtp.comed.com/live-prices/?date=20140522 (that's today) or predicted next day: https://rrtp.comed.com/live-prices/predicted-prices/
Preloading the house is definitely a great trick for the hot summer days. I've toyed with the idea of building some kind of thermal storage unit in the basement for the really cheap periods...but it was getting kind of silly.
But if you know anyone selling a cheap commercial ice maker I'm all ears.
Unfortunately this isn't how the power generation market works.
If you've hit 100% capacity there's nothing you can do except start blacking out neighborhoods. The solutions to date are to a)fire up "peaker" plants which are hellishly expensive to operate but keep the lights on or b)buy surplus power from other markets on the open market. And that price will not be the standard price.
The power generation market absolutely works like this. The problem is that the power consumption market does not. Since most customers only pay a fixed average price/kWh instead of a time of use tariff, so people have no incentive to conserve power since they're still paying the same price even though the spot price has gone up by an order of magnitude.
If the consumers paid the spot price and realized their air conditioner now cost something like $10/hr to run, I bet you demand would come down. The problem is that this would completely screw over those that can't adjust their demand in the process.
Your meter will read lower though. Nest gets signal to implement demand response. Nest sends signal to all participants to up temp setpoint by 3deg. Homeowner uses less electricity. Meter spins slower.
First off, Nest is a business, they're looking for revenue out of this.
Secondly, $85 = $25 + 4 years @$15/yr. So in essence Nest only makes money on this after 4 years. As cool as Nest is, it's not unreasonable to assume that if this catches on other companies might pursue similar programs. Which means that Nest user might be swapping out their thermostat in 4 or 5 years for the then-newest thing.
$85 to the customer doesn't seem like such a bad deal in the grand scheme of things, and as others have said, the customer gets other significant benefits out of the Nest thermostat all along the way.
This is cool, few years ago, I interned for the Tennessee Valley Authority on their Energy Efficiency and Demand Response team. The bulk of our peak demand savings came from industrial customers [1] but we did have a program for residential users, but it was more on the general efficiency side [2].
Am I missing something here? I'm genuinely curious why anyone would think it's a good idea to surrender control over something that directly affects their everyday comfort, especially if it's air conditioning in Texas.
It partially compensates by cooling the house down before peak. Also, you can override it at any time and it will learn what you want. The point is to find ways to cut back that don't affect comfort.
It's a good idea if the money you're paid outweighs the discomfort you feel.
This is an attempt to find a consensual market solution to the problem of building expensive peaker plants that operate perhaps a day a year. The marginal cost of electricity generation capacity is astoundingly high.
Part of Nest's angle is that Nest can learn and detect whether you are home. This lets the thermostat save you money when you're not home - and this is the key - it does so without any thought or input or effort by the customer.
With solar on the roof, I'm putting power onto the grid during those peak times. Maybe if they paid for more peak power, more people would put on solar, which would provide peak output when AC is most needed.
Seems less invasive than tracking when I tend to be home or not home. Next up, they'll track where I'm driving and only turn on the heat/AC when I appear to be heading home. I wonder who else would find that kind of info useful.
Yeah it seems PV generation and AC is a good match, except that peak load happens later than peak production since temps peak in the afternoon and AC use goes up as people get home.
Perhaps a more accurate statement would have been "thermostats are not common in countries where typical residential construction does not include accommodations for central heat/air." Good examples: Brazil, India & China. Sure, a window unit or ceiling mounted a/c will probably have a remote control and a digital display thermostat, but that is not nearly what this is about.
Just my experience. The systems you are referring to are most-likely residential heating systems, and not full-blown HVAC system that are based on a heat pump.
Asia: I have traveled for months in China, India and Japan and don't recall seeing any thermostats, aside from hotels and commercial spaces.
Europe: no A/C in most countries (aside from commercial projects). They make extensive use of residential heating using liquid pipes that pass through the building. In southern europe split ductless A/C systems are common.
South america: I believe they have both central air and split systems.
USA: central air everywhere!
Africa: no money for A/C. ;-)
The split systems are much more energy efficient, so they should be gaining ground.
I can imagine a future where energy is priced in real time. The only reason it hasn't been done so far is that it wasn't technically practical until recently. Imagine if you could tell your Nest to optimize the comfort of your house and keep it below a projected budget. If battery technology progresses, the Nest could even one day store energy at low points and use the battery at more expensive times.
There are many reasons it hasn't been done besides technical practicality. Besides the obvious issues of market manipulation (ala Enron) and information security (sending false prices to cause blackouts), there is a giant problem with customer acceptance. Most people don't like bills that are unpredictable, they don't like bills that are hard to understand, and they don't like change. I'm a big fan of real-time energy pricing but you have to understand that the technical problems are really quite minor compared to the market design and consumer acceptance problems.
I'm also somewhat skeptical of personal batteries being used to save on your electric bill. If it's worth it to peak-shave with batteries, it's almost certainly going to be more effective for companies to do it at scale and with expertise. The only reason it might make sense for consumers to do it is because of the retail-wholesale pricing difference, but if home batteries become popular, you can bet that loophole will be closed.
Source: I used to work at a utility
P.S. Another big problem is systems control. It is very hard to predict how decentralized actors will work side by side. For example, you don't want to change the price of electricity by a cent and then have 10 MW of demand instantly come on across the state just because everyone's Nest price threshold was hit. There are many plausible sounding solutions to this problem (price fuzzing, delays, subpenny pricing), but they have difficult edge cases as well.
I agree that there would be economies of scale to saving up energy at off peak times for use on peak. But the only way I know of this happening on the MW scale is pumped storage. Utility pumps water up into a reservoir all night and then let's it back down through Hydroelectric generators the next day. But the ability to do this is limited by geography. Maybe we are at a turning point. The island of Ohau recently put out an RFQ for a large energy storage system. Will be interesting to see if and who bids.
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[ 2.6 ms ] story [ 84.0 ms ] threadI'm all for helping lower peak demand, but if the utilities are going to be saving billions, I think this should reflect an ongoing savings for the customers, too.
The consumer clearly benefits from not air conditioning an empty home.
But, the article conflates this with "demand response" -- which is more about time-shifting your electrical usage to avoid peak times than it is about reducing your energy usage. The meter will read the same, but it's a huge benefit to the utilities.
A simple way to fix this: price energy more expensively during peak times.
In Chicago you can opt into a program where you pay real-time pricing for electricity. This price can swing from 0.0c/kWh during overnight summer hours when peaker plants need someone to burn off wattage, and I've seen it go over $1.00/kWh during heat waves or when the south is having a freezing snap and everyone is running their heat pumps down there. Standard users pay about 7.5c/kWh.
While the Nest doesn't connect to this pricing, ComEd also offers an optional breaker box (connected via cellular radio) to cycle power to your A/C compressor for short periods of time when the price exceeds a certain level (i.e peak summer demand). So this kind of automatic control exists without needing the Nest infrastructure in place.
In the meantime, I've saved about 15% off my standard bill with a little bit of diligent dumb-thermostat programming. I'm planning a more intelligent system of my own that can watch pricing, house occupancy, and weather forecasts to try and beat that statistic.
No wonder it's not particularly popular.
Although this is something you have control of as well. For the right amount of money, I can arrange to be out with my friends when it is hottest, then come home later. :)
This is where a more intelligent system than the Nest could be beneficial. I'm not for the power company modulating your use but if you had a system that cooperated locally with your habits I think there's a lot of potential. Nest is 50% there.
But if you know anyone selling a cheap commercial ice maker I'm all ears.
A simple way to fix this: price energy more cheaply during off times.
If you've hit 100% capacity there's nothing you can do except start blacking out neighborhoods. The solutions to date are to a)fire up "peaker" plants which are hellishly expensive to operate but keep the lights on or b)buy surplus power from other markets on the open market. And that price will not be the standard price.
If the consumers paid the spot price and realized their air conditioner now cost something like $10/hr to run, I bet you demand would come down. The problem is that this would completely screw over those that can't adjust their demand in the process.
The article only says the utilities will save 'billions'.. so this may be fair or not.. without additional info, how can you say?
First off, Nest is a business, they're looking for revenue out of this.
Secondly, $85 = $25 + 4 years @$15/yr. So in essence Nest only makes money on this after 4 years. As cool as Nest is, it's not unreasonable to assume that if this catches on other companies might pursue similar programs. Which means that Nest user might be swapping out their thermostat in 4 or 5 years for the then-newest thing.
$85 to the customer doesn't seem like such a bad deal in the grand scheme of things, and as others have said, the customer gets other significant benefits out of the Nest thermostat all along the way.
[1] - http://www.enernoc.com/our-resources/brochures-faq/faq-tenne...
[2] - http://www.energyright.com/residential/
This is an attempt to find a consensual market solution to the problem of building expensive peaker plants that operate perhaps a day a year. The marginal cost of electricity generation capacity is astoundingly high.
Part of Nest's angle is that Nest can learn and detect whether you are home. This lets the thermostat save you money when you're not home - and this is the key - it does so without any thought or input or effort by the customer.
Seems less invasive than tracking when I tend to be home or not home. Next up, they'll track where I'm driving and only turn on the heat/AC when I appear to be heading home. I wonder who else would find that kind of info useful.
Hopefully they can help the rest of the world become more energy efficient. Thermostats are not common outside the US.
Do you have a source backing that up? I was in Germany last summer, and they seemed to be just as ubiquitous. (both in Berlin and Munich)
Asia: I have traveled for months in China, India and Japan and don't recall seeing any thermostats, aside from hotels and commercial spaces.
Europe: no A/C in most countries (aside from commercial projects). They make extensive use of residential heating using liquid pipes that pass through the building. In southern europe split ductless A/C systems are common.
South america: I believe they have both central air and split systems.
USA: central air everywhere!
Africa: no money for A/C. ;-)
The split systems are much more energy efficient, so they should be gaining ground.
I'm also somewhat skeptical of personal batteries being used to save on your electric bill. If it's worth it to peak-shave with batteries, it's almost certainly going to be more effective for companies to do it at scale and with expertise. The only reason it might make sense for consumers to do it is because of the retail-wholesale pricing difference, but if home batteries become popular, you can bet that loophole will be closed.
Source: I used to work at a utility
P.S. Another big problem is systems control. It is very hard to predict how decentralized actors will work side by side. For example, you don't want to change the price of electricity by a cent and then have 10 MW of demand instantly come on across the state just because everyone's Nest price threshold was hit. There are many plausible sounding solutions to this problem (price fuzzing, delays, subpenny pricing), but they have difficult edge cases as well.