When the electric grid can’t meet demand–perhaps because you’ve been running the A/C too long, or a wind farm isn’t performing fully–managers turn to “peaker” stations. A peaker station is a back-up power plant that can be turned on in minutes, helping the grid through a temporary shortage. They’re important for stability, but not ideal. They’re expensive–we use them roughly 1% of the time, yet they contribute 15% of overall costs–and tend to have a large environmental footprint.
Ohmconnect offers a clever way to do away with peakers. Whenever there’s a spike in energy prices, representing a supply shortfall, Ohmconnect sends out a message. It asks people to moderate their energy use–perhaps by turning down the A/C or delaying a washing machine cycle–and so take pressure off the system. Or, it works directly with Internet-connected devices in people’s homes–their Nest thermostat, their Tesla vehicle, their Belkin WeMo light-switches–turning them down automatically for 15 to 30 minutes. In return, the community gets a reward: hard cash. Participate regularly enough and people can make back 10% to 15% of their energy bill, according to the startup–maybe $20 a month.
“[Peaker stations] increase the cost of electricity on the grid pretty significantly,” says co-founder Curtis Tongue. “Sometimes the price goes from $40 per megawatt-hour to $500 per megawatt hour, or more. That price volatility is what we’re trying to shift back to users, so they can balance the grid and also get paid for reducing their environmental footprint.”
The broad concept is called “demand response,” and it isn’t new. Energy efficiency companies like EnerNOC have been collaborating with big power consumers for several years. But Ohmconnect–which recently won the Department of Energy’s American Energy Data Challenge–is the first to turn to residential customers. Tongue reckons the time is right now that more people have smart meters, so they can monitor energy use, and Internet-connected devices that enable remote tuning.
“I think people enjoy, and they like knowing, they are participating,” he says. “They definitely like that feedback that they’ve done their part in turning off one of these local peaker plants,” says.
Ohmconnect has signed up about 2,500 users since launching in February, which is a pretty good number given that it only operates in California at the moment. It needs to work in a deregulated electricity market like California’s because it buys and sells energy as a third party. It makes money by gathering up the spare capacity from users then selling that volume back to the grid operator. Users collect some of the revenue by cashing out online; the company keeps the rest.
Tongue hopes to expand into other deregulated markets in Texas and on the East Coast soon and to add further features to the site. One option would be to let users donate their cash to a charity or good cause. Another would be for individuals to participate as groups. Tongue sees opportunity in signing up local communities, for example.
“We’re looking to stabilize the grid,” he says. “Solar and wind power are phenomenal, but they also introduce a little intermittency. What we’re able to do is foster an ecosystem where we can have renewable resources but at the same time we have a grid that works.”
Ohmconnect hasn’t reached significant scale yet–but it surely shows potential. One day, we could all be participating in grid management, and perhaps not even know that we’re doing so.