Granite Geek: How the Nega-Watt Reduces Electricity Demand

Dec 10, 2015

You’ve heard of a megawatt, a unit of electricity that represents a million watts, or, in other words, enough electricity to power about 1-thousand homes. But you may not have heard of the nega-watt—that’s nega with an “n.” The nega-watt is a term used to describe what happens when businesses are paid to reduce their need for electricity. That, in turn, reduces strain on the grid, and in theory is a good idea to those who want to save the environment. David Brooks, a reporter for The Concord Monitor and writer at Granite, spoke with NHPR’s Peter Biello.

All right, so this nega-watt idea sounds like a money-making idea. If I need a few bucks, all I have to do is promise not to run my clothes dryer so much, and someone will write me a check. Is that how it works?

Unfortunately, that’s not quite the way it works, although sort of vaguely, kind of, it is. It’s not a residential thing. You and I, as normal human begins, cannot participate. This is for companies. And it’s not just a promise to do things. There’s follow-up to make sure they’re actually reducing their load in a good way. So if you’re a company that’s planning to move your factory over to China, you can’t say, “Okay, I’ve moved to China and I’m using less electricity, so pay me.” That wouldn’t work.

I encountered this idea, as I mentioned in my Monitor column, while looking at the annual winter report, that ISO New England, which is the organization that oversees the power grid in six New England states, it said we expect to put out this much electricity, and it said we expect the demand to be so-and-so, and it also listed more than 1,600 megawatts of energy efficiency measures. And I was—I kind of knew it existed, but I hadn’t thought about it before. And so I asked, “Why are you measuring energy efficiency along with energy production?”

And this is actually something grids are starting to do and rightly so, because we’re a capitalist society and we are incentivized—to use that horrible word—we’re incentivized by money. And so if you don’t put money on these energy efficiencies, it’s not going to happen. So this is a way to ensure that there’s enough energy efficiency so that you don’t need more energy production.

What happens is that there’s a capacity auction, at which everybody bids their future capacity. They have the capacity to produce electricity to make sure there’s enough power to meet our needs in winter time. And it’s about three years in advance, because it takes a lot of tiem to build power plant. But you can also bid on energy efficiency now. Companies can say, “We’ll use X amount less in three years.” And they will be paid for that promise.

Who pays?

It comes out of our power rates. So you and I pay, as we pay to build power lines and through complicated processes and all that, and we’re paying to use less.

So, essentially there are 1,600 megawatts worth of savings, these nega-watts. That’s 1.6 million homes, right? Roughly?

Roughly. And that thousand-home metric is a little iffy because it confuses power and energy to a certain extent. The way I like to think of it, as I mentioned, is if you add energy efficiency, or demand response, which is the same, but they promise to use less on demand. It’s an agreement that says, “I’ll be running my factory, but if you call and say, ‘Oh my gosh, we have a problem,’ I promise to ramp back.” So if you add up the energy efficiency that happens all the time and the demand response, which happens on demand, you get about 2,250 megawatts, which is 1.8 Seabrooks. That’s the unit of measure I like: the equivalent of the amount of energy put out by the Seabrook Power Plant. So it’s like if there were 1.8 more Seabrook stations out that would be meeting all this need that they now don’t need to meet.

So it’s a good thing because you don’t have to go out and build 1.8 Seabrooks.

And the power lines to serve them. It’s the whole idea—well, one of them, along with the environmental reasons, behind this. To indirectly save money. Even though we’re spending money for these negawatts.

So in a way it’s a little like what happens in agriculture sometimes, when farmers are paid to not produce crops, because doing so would dilute the crops in the market…

That’s a reasonable parallel. The economic forces are somewhat different, as you mentioned, but it’s a long-established tradition in agriculture, is you have farmers who will make money to do nothing on certain fields, and now you’re having sort of companies that can make money to do nothing to a certain extent, to not use electricity, and it’s just—it’s interesting that the electric system, which for 100 years has been built to create more electrons and send more electrons out and send more electrons into your house, and you can use more electrons and pay me for those electrons, it’s being revamped so part of what it’s paying for is to not use electrons, so…

So do you see the nega-watt being used more in the coming years?

It seems like it’s a great idea. I mean, obviously, you can’t go with it forever. You can’t turn off all the power and pay people to use no electricity. It has its limits. But the idea of giving a monetary value to efficiency, to being efficient, is important, and is a struggle, but we need to do it if we’re going to, frankly, be efficient. Waste not, want not—and to a certain extent you need to be paid into “waste not, want not.”