Demand-side emission reduction key to meeting decarbonization goals, report says

New study from Brattle Group and Oracle shows utility customer action can be twice as impactful as current clean energy supply policies in reducing greenhouse gas emissions

In the race to meet aggressive decarbonization and net-zero carbon goals and regulations, a new study shows that utilities cannot afford to just focus on clean energy supply investments. The report, by The Brattle Group and Oracle Utilities, found that by 2040 actions by utility customers can reduce nearly two times more greenhouse gas (GHG) emissions from the residential and light-duty vehicle sectors than would result from current policies to promote investments in clean energy supply alone.

By adopting new technologies and energy efficiency to reduce energy consumption, residential utility customers can account for 534 metric tons of avoided carbon dioxide by 2040, the equivalent of retiring more than half (135) of the United States’ coal plants.

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Conducted in early 2021, the study looked to quantify the GHG reduction impact customers can have by adopting new technologies and behaviors over the next 10-20 years. Authors modeled the impact of potential customer actions such as:

participating in gas and electricity efficiency programs,
buying an electric vehicle,
installing behind-the-meter solar, or
electrifying their water and space heating. 

Results were calculated using regional hourly grid emissions factors, and they quantify the aggregate impact of ambitious and achievable adoption of new GHG-reducing technologies and behaviors.

Consumer action essential to quick wins in GHG reductions

Fighting climate change has become a significant focus of governments, states, and cities worldwide and utilities have stepped up to the challenge. Today, 78% of US consumers are served by a utility with significant carbon emission reduction or elimination goals.

 While rebuilding the global energy supply infrastructure through the deployment of renewable energy at scale will be an ongoing priority, the role of customer actions in driving down global emissions needs to be given an equal focus to ensure long-term goals are achieved.

 The report shows that by 2030, significant near-term emission reductions will be led by consumer gas and electric energy efficiency and the installation of rooftop solar. By 2040, EV adoption and the move to more efficient electric space and water heating will play more heavily in the mix. For EVs, the increased contribution to carbon reduction will come in large part due to the industry expecting a 4X increase in the total number of electric vehicles on the road from 2030 to 2040, as well as anticipated declines in grid emissions. 

“The prevailing belief is that clean energy supply investments need to be the primary focus of decarbonization efforts. And while those investments are essential, this research clearly shows that utilities can’t overlook the power of their customers in delivering needed change,” said Dr. Ahmad Faruqui, a Principal at The Brattle Group.

“The aggregate impact of individual utility customer actions on decarbonization is not only profound – but also one of the fastest and cost-effective ways for utilities to make progress toward their climate change goals. Customer-side decarbonization policies will also bring with them the benefits of enhanced customer engagement and improved customer satisfaction with utilities,” said Faruqui.

 “APS recognizes the unlimited potential in partnering with customers. Our nationally recognized voluntary energy conservation programs, like APS Cool Rewards, are designed with our customers in mind and are one of the many tools we use to create a cleaner, more reliable smart grid for Arizona,” said Kerri Carnes, Manager of Customer Technology at Arizona Public Service Co. (APS).

 “One of the most critical weapons in the fight against climate change is eliminating carbon before it’s ever released into the environment,” said Matt O’Keefe, group vice president, Oracle Utilities Opower.

“Some of the biggest, untapped opportunities for utilities to decarbonize lie on the demand side – namely energy efficiency, electrification, and demand flexibility, all of which rely on influencing customer action on a huge scale,” he added.

The study, Customer Action Pathway to National Decarbonization, was co-authored by the Brattle Principals Sanem Sergici, Ryan Hledik, Ahmad Faruqui; Brattle Senior Associate Mike Hagerty and Brattle Research Analyst Kate Peters.