Listening to the Price of Power: A New Generation of Thermostats can Save California Billions

by Gordy Slack

A team of CITRIS-backed engineers, working with state regulators, private industry, and policy experts, has fashioned a low-cost solution to a billion-dollar problem. Their simple and inexpensive modification to existing thermostats may help steer California clear of rolling blackouts, reduce the need for certain types of future power plants, save money, and reduce pollution.

Golden Power Manufacturing through its subsidiary Radio Thermostat Company of America (RTCA), has implemented an expansion port consistent with the PCT reference design discussed here. The model above is already being offered to utilities and consumers.

The modification adds communications to standard programmable thermostats by specifying an expansion port that accepts different types of communications modules as well as other functions to be added later.  UC Berkeley engineers, led by Professor David Auslander, have opened the door to new efficiencies and the savings they bring.

Most of the year, California electricity demand runs between 35,000-40,000 MW during the day. This capacity is generated by a combination of nuclear plants, hydroelectric, very efficient combined-cycle natural gas-fired plants, and some not-so-clean out-of-state coal plants.  But there are a few hot summer days each year when the demand on the grid can increase by 50 percent.  To meet that demand, state utilities are required to fire up older, dirtier, and more expensive fossil-fuel power plants.  Sometimes, even the addition of those auxiliary plants is not enough, and capacity to meet demand has to be bought at high costs from outside the state. And on extreme occasions, as in the 2001, all these sources combined cannot meet the demand and rolling blackouts are imposed. Rolling blackouts are an expensive alternative, taxing not only the state’s coffers but also its reputation, ability to do business, and quality of life. 

The cost of reserving “peaker” plants for only a few hundred hours of service is over a billion dollars annually. A much better strategy, the California Energy Commission believes, would be to help consumers reduce their demand for a few hours on those very hot days. The approach, using communications and IT, is to signal devices and consumers that the grid is stressed and ask consumers to reduce their electric load.  This strategy is known as Demand Response.

Ronald Hofmann, a senior advisor for the California Institute for Energy and Environment and the CEC’s point person on this project, says that the specs for the upgraded thermostat were designed to be written into Title 24, the guidelines for all new buildings in the state. Although these specs are not yet part of Title 24, the expansion port has already been incorporated into products by the Radio Thermostat Company of America  and is being considered by other manufacturers including those that make appliances. 

The team emphasized keeping the added features inexpensive. “We needed to design a PCT that didn’t cost any more than the standard, already available thermostats,” says Auslander. “We had to build in this extra communication technology, and keep the unit costing only fifty or sixty dollars.”

When widely adopted, the new programmable communicating thermostats (PCTs) will help reduce the amount of air-conditioning demand used by consumers over wide areas on those few hot summer days. “You set your thermostat so that when a radio signal sent by the utility says it is nearing grid capacity, the PCT automatically raises its set-point temperature up by a few degrees according to your preference. The combined effect of a degree or two of adjustment spread across large regions will often be enough to avert rolling blackouts,” says Paul Wright, CITRIS Director and a researcher on this project.

Each person would program their own thermostat to respond to these extreme situations. If a user wants, he or she can choose to ignore the signal and set their thermostat where they want it. This allows the consumer to still have the final say in the temperature set point, not the utility or the government.

Anticipating criticism that a radio signal sent to a home thermostat might be invasive, Auslander notes, “The whole idea of the new thermostat is to avert something really invasive. A rolling blackout shuts everything down. An opportunity to choose to help avert one is much less invasive.”

Hofmann agrees. “You may be one or two degrees warmer on a couple of summer afternoons, but your computer is still on, your lights are on, your refrigerator is on. And when the emergency is over, your thermostat is signaled again and resets itself to its default temperature. If you do not mind paying the extra peak power fees, you can always program your PCT to ignore the signal and keep your air conditioner operating at capacity.”

Programmable thermostats (PTs) have been around since the 1970s, when they were deployed in response to that decade’s oil crisis. Those early PTs and their digital descendants permitted consumers to set their thermostats to turn down the air conditioning at night, when occupants were asleep or absent, and, for residences, during the day when no one was at home. Later, when users were again awake and present, the thermostats would reset the air-conditioning (or the heat) to the required comfort level. “We expected those early thermostats to save a lot of money and energy,” Hofmann says. “But only if people used them,” he adds.  “Unfortunately, fewer than 20 percent of Californians took, or take, the time to program them.”

Energy Star, which gives efficiency ratings to appliances, last year withdrew its “High” rating from programmable thermostats. Not because they cannot save lots of energy, but, because their owners do not bother or find it too confusing, says Hofmann.

That is another area where the communication function of the PCT will bring a big improvement in use patterns, says Hofmann. Rather than having to program their own thermostats, residents can let a third-party programmer do it remotely, via the Internet, and pay for the service with some small portion of the savings gained by using less electricity, he says.  It would be similar to downloading ring tones for your mobile phone.  In this case, you’d be downloading “lifestyle” schedules for your thermostat.

Or if people want to program their own PCTs, they will be able to do so on-line with user-friendly interfaces that communicate directly with the thermostat, through a DSL line or wireless device that can be plugged into the expansion port. 

Over the next few years, users will be able to have other appliances also respond to price signals. Once the price of electricity enters the house, washing machines, for example, can also respond to price (and emergency) signals, waiting when the supply is low (high price) and operating only when the supply is high (low price), saving more valuable energy and money throughout the year.