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April 18, 2024
April 18, 2024
Energy demand is soaring: the rise of AI and the electrification of everything mean grids are struggling to keep up, and this will only accelerate as the energy transition continues. We’re following this trend closely in Mission North’s Sustainability Practice – both the challenges and the innovative solutions emerging to solve it.
We recently sat down with Erika Diamond, Senior Vice President and Head of Customer Solutions at EnergyHub, to hear her take on this extensive transition. EnergyHub partners with utilities to build and control virtual power plants (VPPs), which bundle large numbers of customer devices like residential thermostats, electric vehicles, solar panels and batteries to help keep the power grid reliable and accelerate decarbonization.
Erika shared her perspective on promising energy transition strategies, consumers’ role in the journey and her vision for an efficient future grid. What follows is an edited version of our conversation.
What are the most promising advances happening in the energy transition right now?
The most exciting thing is the acceptance of VPPs as a real, scalable, reliable resource. People have been building big VPPs for over a decade, but VPPs haven’t had the attention that they do today.
The trends of home automation, digitization and AI mean that we now have connected, controllable devices everywhere. This has changed the landscape and accelerated the opportunity to scale VPPs. Now that adoption of EVs is also growing, it’s created an incredible environment for VPPs.
VPPs can help the grid manage even more renewables and accelerate the march toward decarbonization. We’re at the nexus of all the cool things we want to see happen on the grid and to the planet.
<split-lines>"We’re at the nexus of all the cool things we want to see happen on the grid and to the planet."<split-lines>
How far off are we from VPPs’ peak potential, in terms of both technology and timeline?
From a technology standpoint, we’re there. We have between 30 and 60 gigawatts of VPPs in the U.S. today. That’s huge.
In terms of timeline, a big part will be customer adoption of connected devices, and how different financing models evolve. For example, the Department of Energy’s Loan Programs Office is putting billions of dollars into companies building solar storage VPPs – and toward the technology required for home electrification projects. More companies can get funding through that office and the Inflation Reduction Act, and there are so many doing innovative work. For example, Rewiring America offers a ‘home electrification calculator’ that helps homeowners and renters develop an electrification strategy, find qualified contractors and maximize tax benefits.
I’d describe this trend as electrification-as-a-service. The value proposition to consumers isn’t, ‘Let’s make the grid better.’ It’s, ‘Let’s make you more comfortable and potentially save you some money.’
More startups are entering the grid tech space as it heats up. What’s your advice for them?
Find experts in the field and get lots of early feedback to determine if what you’re building fits a real need. In this space, lots of startups don’t know what they don’t know.
Also, understand how your customer’s business model works and ask how they will pay for what you’re providing. In a highly regulated space like this, business models are set in stone. Even if people want your product, if they can’t pay for it – you’re out of luck.
How much consumer appetite do you think exists to actively engage in the energy transition?
There’s a small portion of people who are really excited to play a role. But in general, people buy things for a specific use case or because of great design — like a modern smart thermostat — or because their neighbors have it (say, a Tesla).
Personally, I don’t care about your ‘why,’ as long as you buy the thing and agree to participate.
What new ‘carrots’ might emerge for consumers to participate?
I hope we can message electrification in a way that makes people feel like they’re gaining something, not giving something up. Heat pumps, which transfer heat rather than creating it, are a great example – and they’re really having their day. They run solely on electricity, use less energy and have all kinds of benefits (including reduced energy costs and better indoor air quality).
<split-lines>"I hope we can message electrification in a way that makes people feel like they’re gaining something, not giving something up."<split-lines>
Speaking of consumers, what’s your take on the fluctuations in consumer demand for electric vehicles?
It’s funny – I read these scary headlines, but then I talk to people in the EV industry and they’re not that worried.
Ultimately, it all comes back to customer choice. We haven’t reached a point where everyone in America wants an EV. The industry needs to give customers what they want so we can crawl, then walk, then run to widespread adoption.
There was a movement to get rid of hybrids and go fully electric, but that doesn’t work for every use case. The question is, what does a customer in the city need, versus the suburbs and rural areas? I’m excited to see Toyota, who we collaborate with, ramp up plug-in hybrid EV production and sales.
<split-lines>"The (EV) industry needs to give customers what they want so we can crawl, then walk, then run to widespread adoption."<split-lines>
Finally, what energizes you most about doing your job every day?
The fact that I’m having an impact. I spend my day building a business that will revolutionize the grid, and that’s so cool. I can tell my kid, ‘I’m trying to make the planet a better place for you.'
