Interview with Cisco DeVries of OhmConnect
Cisco DeVries, the CEO of OhmConnect and the originator of the award-winning property assessed renewable energy programme, is a former White House staffer to the US Secretary of Energy (PACE). OhmConnect is bringing energy use to the forefront of people’s consciousness with its innovative demand response strategy, which aims to make California 100% renewable energy reliant. Smart gadgets that automatically make dwellings grid-responsive are the simplest and most effective way to accomplish this. This will help to stabilise California’s shaky system, as well as automate energy savings for residents and change how energy is used throughout the state. Demand response is the way of the future, and it will make 100 percent renewable energy a reality. Cisco De Vries speaks with REM about how it all works.
Can you give me a brief background to yourself and to OhmConnect and what the company does?
My entire career has been spent in the fields of sustainable energy, energy, and entrepreneurship. I was an early Clinton appointment at the US Department of Energy, among other positions in the administration. That was my first significant energy link. I worked in both the public and commercial sectors for a number of years before founding Renew Financial, which developed a novel financing product called PACE – property assessed clean energy. Then I formed a company to assist in getting that off the ground. PACE has grown to be a $10 billion industry worldwide. The company did well, and when I departed a few years ago as the CEO of Renew Financial, I had financed the modifications of over a hundred thousand homes. I then became really focused on a very critical topic about the future of a zero-carbon grid, specifically about the reality that there is no easy path to get to a zero-carbon electrical grid.
Can you give me a bit of a rundown on what demand response is and how it works?
Demand response is a critical component of the future grid and falls into several categories. As you may know, one of the most important aspects of an electrical grid, and what sets it apart from practically everything else, is that supply and demand must be perfectly balanced in symmetry at all times, 24 hours a day, down to the second. To do so, we’ve often built far more power plants than we need to be able to ramp up supply. So now we have solar, but before that there was coal, nuclear, natural gas, and everything else. This massive infrastructure was built to meet the demand.
For the most part, demand is strongest on hot summer days. Demand response is really an attempt to look at the other side of the equation so that we don’t have to create everything. Instead of having to raise supply, we could just cut demand. When you consider how costly it is to have a power plant sit idle and not perform, except for 1% of the time, which is very normal these days, demand response becomes a very useful and crucial element of how we can balance the electrical grid and save money. It’s even more crucial with renewables because wind and solar both have concerns with intermittency during the day, such as when the wind doesn’t blow or when the sun goes behind a cloud. It’s even more crucial with renewables because wind and solar both have concerns with intermittency during the day, such as when the wind doesn’t blow or when the sun goes behind a cloud.
The sun sets at night, and there’s nothing you can do about it; it’s simply off. So, if you want to have as much power as possible at night, you’ll have to switch to natural gas or other sorts of fossil fuels to generate, which isn’t very environmentally friendly. So, how do we get the demand side down in demand response? How can we convince people who use energy to use less of it or use it at various times so that the grid can be better balanced?
And what’s amazing about today, just to get a sense of where Ohm Connect fits in, is that I believe the model we have, which is incredibly essential, is that we behave like a power plant, networking millions of households. We can automatically and instantly lower demand across big swaths of territory in large amounts at important periods when the grid indicates that it is congested, dirty, or expensive – and that means grid management don’t have to turn on dirty fossil fuel facilities. Instead, they treat us like a [traditional] power plant and pay us accordingly. They were going to pay that money to turn on a power plant and generate 150 megawatts anyway; instead, they pay it to us, and we split the earnings with our users. As a result, all of the participants are transformed into small little power plants, and they are compensated for their efforts.
These significant changes transform us into a tool that can be utilised on a regular basis and that functions similarly to a normal power plant for the grid and utilities. That makes us really helpful, and the economics mean we don’t need to be subsidised because we’re paid the same as a power plant, but our system gets turned on instead of that fossil fuel power plant.
That’s an interesting point about you paying people – that’s a really good incentive for people to do this.
People are extremely concerned about the environment, as we have repeatedly discovered. They want to do the right thing, but we need to figure out the numbers. If it costs them a lot of money, they will not do it. So I’ve spent a lot of my professional life attempting to fix that problem in various ways. This is perhaps the most elegant and direct manner I’ve ever seen it done. So what occurs is that we tell people that power will be extremely expensive at 7:00 p.m. tonight, and we’ll pay them if they minimise their usage. We know how much energy they regularly use and how much we want them to use thanks to the smart metre, and we’ll compensate them if they lower their energy use by a certain amount.
So we have customers who are making hundreds of dollars over the course of the summer simply by being cautious about how they use energy and following our lead. That motivation proves to be crucial because individuals want to do the right thing, but the economics must be correct. I believe we have created an extraordinarily enjoyable system. People think it’s a game, but the truth is that customers are being compensated for doing the right thing.
You mentioned something about making California 100% renewable – what kind of time scale are we looking at for that?
California has established a goal of being 100 percent renewable by 2045. There are several stages to get there, and it is actually ahead of schedule. It keeps establishing these goals, and people assume we won’t be able to achieve them – and then we keep beating those chevaliers. On the grid, we need to get to a carbon-free state. We have approximately 20, 25 years to go, and we’ve made tremendous progress in the previous several years, but as everyone will tell you at this time, the final 20% will be the most difficult because that’s when the peaking concerns will arise. When you get to about 80% zero carbon, and there are days today where the entire state runs at zero carbon for a couple of hours, we’re often at a zero carbon grid during the day, but to deal with the night-time issues, we’re running out of options until we have two solutions, and really the only two solutions that are zero carbon at scale are storage and demand response, which we do. We’ll have to do a little bit of both. Storage is crucial, but it is still rather expensive and relatively little in comparison to where it is required.
We believe storage will be a big part of it, and we’ll be a big part of it as well. Those two things will come together to assist us bridge the gap between what we can achieve now and what zero carbon looks like.
Who are your partners on this?
We sell power to utilities and other load-serving businesses, but we engage with a wide range of people. So we work a lot with Google and we probably control approximately 20,000 Google gadgets in people’s homes, including a number of Nest thermostats, but also Google Home minis and other devices that can control lights and other things. So we have a lot of technological partners, including Google, with whom we’ve done deep integration and can control those devices, and they’re strong advocates of what we’re doing.
On the technological side, this is obviously critical. On the grid side, it’s critical that we have a direct line of communication with grid managers, and in California, as in many other states, retail energy providers and utilities are distinct from the overall independent system operators who run the backbone grid and manage the buying and selling transactions. As a result, we spend a lot of time in California working with the CISO. The California Independent System Operator (CISO) is a critical partner in integrating our unique energy behaviour into a grid that was never built to accommodate it. They’ve been quite beneficial. It’s difficult, but they’ve been an excellent partner.
We also work with organisations around the country, state by state, that are attempting to assist their consumers save money or do something nice for the environment. Everything from the Sierra Club, one of the major environmental organisations in the area, to some of these organisations that specifically assist families in figuring out how to save money – life hacks – how can you save $5 on this? How are you going to save $10 on that? We discovered that collaborating with environmental organisations and organisations that assist these families can be really beneficial. Both of us win.
Is there anything else that you would like to share with our readers?
The only thing I’d mention is that what we term auto Ohms is incredibly interesting and brand new for us right now. This is where we have behavioural users, to whom we send text messages, as well as a variety of other people, and we’ve progressed to the point where we now have 15,000 behavioural users. We’ve now reached 15,000 families where we can control at least one of their gadgets around the clock, seven days a week. We can silently power down or adjust the setting on their device, refrigerator, or thermostat for 15 minutes whenever the grid requires it. As a result, most individuals are completely unaware of what is going on.
This is where we must succeed – dynamic real-time grid involvement that requires no action on the part of the user and has minimal impact on their daily lives. For example, if I go to the fridge and open it and the light isn’t on, that’s the only way I know what’s occurred, and we’ve had a pretty intense heat wave in California these last several days. The fridge is fine for for 15 minutes. The cuisine is satisfactory. 15 minutes is not an issue. Individuals believe the light is out and then realise it must be an auto Ohm, which they verify and find out it is. As a result, we’re currently contributing a resource to the grid, and people are also getting paid for it, without even realising it. It’s a beautiful circle. That, I believe, is a significant step forward for us, a huge leap forward, and a view into the grid’s future. It is one of those critical sectors. It isn’t as appealing as a solar panel. It’s difficult to wrap your arms around and love. This is a unique situation. It’s a refrigerator plug.