By Margaret Lindquist | January 2021

Utilities across the US are committing to aggressive decarbonization goals that involve increasing use of renewable electricity and converting existing gas pipelines to carry renewable natural gas and hydrogen. More than 30 utilities, supplying power to two-thirds of all US consumers, have established goals aimed at reducing the impact of climate change.

National Grid US took a leadership role, announcing its plans to achieve net-zero emissions by 2050. “We felt that if we’re going to make a difference we needed to not only reduce emissions from our own operations, but also enable the decarbonization of society more broadly,” says Badar Khan, president of National Grid US. “We’re building a world that’s more sustainable for our future generations, but doing it in a way that segments of society aren’t left behind.”

Long-term targets

National Grid’s massive tunnel boring machine is carving out an underground energy passage.

To implement its Net Zero by 2050 plan, the company is starting with the end goal, and working backward. “What do we need to see by 2040 or 2030? We’ve set targets for each of those time periods,” says Khan. As a result, the company has been able to develop short-term milestones. “Now that we’ve been transparent about where we are today and we’ve set public targets externally, we’re setting milestones by quarter. It’s not a side project or a nights-and-weekends thing. It’s something that’s a core part of everyone’s job.”

Utilities are now trying to determine how to achieve these ambitious decarbonization goals and still deliver on the expectations of customers and regulators today. “I think the four key questions that utility executives are asking themselves are: Can I get it to customers fast? Can I scale it? Can I make it available to all of my customers? And can I use these initiatives to grow my business?” says Scott Neuman, Opower group vice president for Oracle Utilities. “Historically, we’ve focused on the metric of kilowatt hours, or therms saved throughout the year. But these executives are now asking themselves how utilities should invest differently if emissions reductions are a core metric.” That’s why, according to Neuman, getting decarbonization measurement right is the first step, before utility leaders even start to set specific goals and track performance.

There are three broad areas that have to be addressed in a successful decarbonization plan: transportation, heat, and power generation. National Grid has created a framework that outlines 10 areas that they’ll focus on in order to achieve their goals in these areas. The plan includes reducing methane emissions from their own gas network and working with others in the industry to reduce emissions from the entire value chain, interconnecting large-scale renewables with a 21st-century grid, and investing in large-scale carbon management technologies. But number one on that list is reducing consumer demand through energy efficiency.

The energy user as an agent of change

“As people say, the cheapest kilowatt hour is the one that you don’t consume, and the lowest emitting kilowatt hour is the one that you don’t emit,” says Khan. “Expanding our capabilities to help customers lower their consumption will continue to be a key part of achieving net zero emissions.”

Across the National Grid customer base, the company has invested more than $4 billion since 2012 in energy efficiency and demand-side response, encompassing 1.3 million homes and businesses. But today’s approach is very different from decades ago, when the focus was on just getting consumers to save as much energy as possible throughout the year. “What we’ve learned with decarbonization is that it matters not just how much you save, but when you save it and how you save it,” says Neuman. “We’re helping consumers use energy when it’s cleanest and most affordable and making it easier for people not just to do the easy stuff like buying a thermostat, but hard stuff, like weatherizing, buying EVs [electric vehicles], and so on.”

Collaborating to influence consumer demand

National Grid and Opower have worked together for about 10 years, and since the start of the relationship, National Grid has saved its customers 4 terawatt hours of energy, which is equivalent to the annual output of the Hoover Dam. “The magnitude of the operation, and sheer number of people that it would have taken, really puts into perspective what was achieved by a few dozen folks from National Grid and Opower working with some good tech,” says Neuman.

Using AI and behavioral science techniques developed by Opower, National Grid sends out a home energy report that delivers customized recommendations to customers in simple, easy-to-digest reports. For example, when National Grid detects that a customer is charging an EV at home, they’ll send recommendations on the best time of the day to charge. They’ve simplified the reports so that it takes one click for a consumer to visit a web page to request a home energy audit, which increased the number of audits by a factor of five. National Grid also advocates for grid modernization and smart metering to empower their customers with more data about their energy use. With better technology, customers will be able to take more control and fluctuate their energy use during off-peak hours.

Opower is also working on ways to give customers a single view of their energy spend. “Nobody wants five different apps for their thermostat, solar system, battery, EV charging, and the utility bill,” says Neuman. “They want one view, and they want that from the utility. We’re working hard on that.”

There’s a precedent for this kind of radical change. In 1932, about 10% of all rural homes had electricity, and half of those were running their own private power plants. Franklin Roosevelt signed the Rural Electrification Act in 1936 and by 1943 more than a million new customers had electricity. By 1960, almost 97% of farms were electrified. “In almost 30 years, a tremendous transformation had occurred,” says Khan. “When we look at the journey over the next 30 years, we’re asking ourselves, ‘Can we make a similar transformation?’ The answer is yes.”

Photography: National Grid