My guest this week is Ram Narayanamurthy, the Deputy Director of the Building Technologies Office at the Department of Energy (DOE) for the last two years. Before joining DOE, he led the buildings program at the Electric Power Research Institute, or EPRI, for a decade. He has 27 patents to his name and has worked extensively with builders, developers, and utilities to scale new technologies that can increase grid reliability, reduce emissions, improve human health, and lower costs.

I spoke to Ram about his work on DOE’s Connected Communities program which funds projects to advance grid-interactive, energy-efficient buildings and communities across the nation. Ram and the Building Technologies Office are doing cutting edge research and deployment to increase demand flexibility, a key component to strengthening the grid. We talked about the role AI plays to optimize demand and shift loads to times of day with an abundance of power and use less at peak times. We talked about the importance of building technologies that improve energy efficiency and demand response, particularly in an environment of rapid load growth.

I enjoyed learning what this important Office within the Department of Energy is up to and how the technologies they’re piloting with utilities around the country could impact Texas in future years.

I hope you enjoy the episode. Timestamps, show notes, and the transcript below. Please don’t forget to like, share, subscribe, and leave a five-star review wherever you get your podcasts.

Timestamps

2:05 - About the Building Technologies Office

3:28 - What does demand flexibility mean in buildings

6:41 - Energy optimization and flexibility as energy efficiency

9:03 - AI

11:55 - The grid edge

15:28 - What are Connected Communities? What is the Connected Communities program?

17:25 - Examples of Connected Communities; results and lessons learned so far

25:27 - Who should orchestrate all these distributed energy resources

28:36 - Importance of distribution planning; examples of successful strategies

32:38 - Replacing resistance heat

36:18 - How do we make sure these technologies and the benefits are actually accessible and affordable to everybody; trickle up vs trickle down strategies for technology access

42:51 - How do we make demand flexibility and grid edge more understandable and desirable to the public

46:29 - Resilience benefits of Connected Communities

Show Notes

Building Technologies Office

Connected Communities Program

FERC and NERC report on Winter Storm Uri

Information on HOMES and HEARs (or HEEHRA) programs

Seattle City Light Electrification Assessment

EPRI Study Examines Impacts Of Electrification For Seattle City Light | American Public Power Association

Electrification Strategy - City Light

Transcript

Doug Lewin

Ram Narayanamurthy. Welcome to the Energy Capital Podcast.

Ram Narayanamurthy

Thank you, Doug, and it's my honor to be here. Thank you for inviting us over.

Doug Lewin

Yeah. Thanks so much for taking time, Ram. Obviously the Building Technologies Office where you sit, is doing some really phenomenal work. Can we just start with kind of a little bit about BTO and its mission? Obviously DOE is a great big agency. There's lots of different areas of endeavor, but tell us a little about the Building Technologies Office.

Ram Narayanamurthy

So the Building Technologies Office, we are about creating healthy, comfortable, efficient, affordable, resilient, and decarbonized environments for people to live in. We spend 90% of our time in buildings, whether it's for work, whether it's for living, it's our home. We shop in buildings, we learn in buildings. So they're all over us and all around us. Part of the mission of our office is to achieve our long-term energy goals while still making sure that we are providing those healthy and resilient environments for people to live in and work in.

Doug Lewin

Perfect. And looking over the website, you guys kind of break it down into research and development, market stimulation, and codes and standards. And while I don't think you work, and you can correct me in a minute if I'm wrong, you don't work on codes and standards. I do want to make sure the audience understands how important those are. Because we're obviously in an environment, we're on just about every podcast run, we're talking about load growth, right? And having these standards in place, bringing the use of refrigerators and air conditioners and lights down, that makes a big, big difference. But what we want to talk about today is the part of the mission, and I'm reading this little phrase from your website, “enable high performing, energy efficient, and demand flexible residential and commercial buildings.” Can you talk for a minute about what you mean by this demand flexibility?

Ram Narayanamurthy

Perfect, yeah. So at the Building Technologies Office, we just recently released our national blueprint for decarbonizing the building stock by 2050. When we look at our goals to achieve a net zero economy by 2050, buildings contribute about 38% of emissions, overall emissions when you count the energy use, the electricity use in buildings.

So for achieving those goals, we have four main pillars. One is around reducing emissions at the building. We have a second pillar, around energy efficiency, which has been core to both affordability and decarbonization over many years. We are working on demand flexibility and we are working on what's called embodied carbon.

And demand flexibility for us is the place where the buildings are integrally tied into the overall energy system, especially the electricity system, but also to some extent to the gas system. And demand flexibility means that you are now able to move the energy use. Buildings use about 75% of all electricity that's generated. So the capability and the ability to move that energy use to times when you have more clean power or more clean power generation being able to have that flexibility so that even within a building you are able to run your air conditioner while still charging your electric vehicle, while still charging your battery or discharging your battery, making all of those different elements work together so that you are optimizing at the building level, but you're also optimizing at the overall system level and helping the overall energy grid become more cleaner and efficient. That's really what demand flexibility is about. And we have different ways of achieving it. Traditionally demand flexibility on the utility side has been around demand response, but now we are going to a new era where we have not just the traditional on/off switches, but we have much more flexible technologies, whether it's batteries, EVs, smart term stats, building energy management systems that can provide the demand flexibility. It's a concept that is transition.

Doug Lewin

Yeah. And so it's actually, I like to talk to people about this a lot. I've been working in and around energy efficiency for 20 years or so. And we all have to kind of update our priors here because we're rapidly moving into an era. In many ways we're in that era now where energy efficiency actually means using more power at certain times, right? You talked about there's low emission power, that's basically the same as cheaper power, right? So if we can actually get into, you were talking about electric vehicles, charge the vehicles when power prices are low and the power is cleaner and then, stop the charging or even you get into some of these vehicles-to-home, vehicle-to-load, vehicle-to-grid, these kinds of things. But even a more fundamental basic use case would be, and this is where the connection to energy efficiency and demand response come together, right, is with air conditioning. So if you can, particularly with some of the heat pumps, right, they can take a signal. So like you said, the old versions of demand response, direct load control, right. Turn it off and people kind of sweating inside their homes. Now you can actually pre-cool when you have a lot of solar power and then use less during that period when the sun's going down. Are you guys looking at those kinds of things as well?

Ram Narayanamurthy

Absolutely, yeah. And like you mentioned, right, technology has evolved a lot in the last 10 years. We have way more tools than we ever did in our tool belt. So, when we think about what we can do today, you take a smart thermostat, like a Nest or Ecobee, and now you have the capability to remotely change the set points. Of course, you're working with the people who live in the homes to make sure they're still comfortable with what you're doing. Butyou can do things now where you can pre-cool a building much more easily than you ever could. You didn't have those capabilities 10 years ago. You could pre-cool a building, make the building comfortable at just the set points so that you're still sitting within a comfort range for the occupants of the building, whether it's commercial building, residential building. But what it does is, you're using energy at a different point of time. And that means that if you're pre-cooling the building, you're using the energy when there's a lot more solar available in the middle of the day. And then you're able to reduce the energy use around 4pm, 5pm, 6pm, when your demands on the grid are much higher, your solar is starting to wane off. This is the kind of flexibility that we are now able to get from the technologies that have evolved in the last 10 years.

And I think energy efficiency comes from the fact that if you're cooling your building when it's cooler outside than during the hottest part of the day, then your air conditioner is actually running more efficiently. So now there are more capabilities where we can do both energy efficiency and demand management. And one of the terms we have come up with, Doug, is we call it power efficiency, because I think we are transitioning to an era where you're going to have ample energy available, especially as we get more clean generation on the grid. But power is going to be your currency going forward. So demand flexibility helps us with that power efficiency.

Doug Lewin

I want to ask you a question about this as well on AI. There's so much discussion again, probably at least every other episode of the Energy Capital Pod, we're talking about artificial intelligence and how much. Usually it's in the context-realm of we're going to be adding a lot of load to the grid and are we going to have enough power to serve that? But I think there's the other side of the coin there, which is if people have the opportunity to say, here's my comfort band, right? I don't want it ever hotter than 78, 79 in my house. I never wanted any colder than 70, 71 in my house, whatever. It's up to that person's preference or their family's preference or their business's preference or whatever. Then within that AI can actually kind of move that load around. Does that kind of come into your work at BTO or is it still a little far off?

Ram Narayanamurthy

It's a great point, Doug. Yes, it has come into our work. It is something that we have been looking into. We have worked with multiple utilities and even prior to my time at DOE, I'd worked with a lot of utilities looking at the capability to do that kind of adaptive, smart energy management. So, you can imagine a world where, and I don't think we are very far from that world where you can just talk to your smart speaker and say, hey, keep my home between 70 degrees and 76 degrees and let it take care of everything. And those are the capabilities I think we are getting with the evolution of computing, with the evolution of data and how we are able to now interact with our homes and our devices. So it's a great thought and I think we'll get there soon. Sooner rather than we think.

Doug Lewin

Yeah, I could even, yeah, I could even envision like we might not even be far away from where, yeah, you say this is your comfort band. And then on certain days, things are getting really dicey on the grid.You maybe get a message from the smart speaker or it pops up on your phone. I know you don't want it hotter than 76 in your house. Power prices are really high. Would you take a $10 bill credit to let it go to 77. And you can say, nope, I'm having people over. I'm having a party at my house. You know, my elderly mother's visiting. And don't touch my thermostat. And you just say no, or you can say, know what? I'm just about to leave the house. I'll take the 10 bucks. That's great. You know, right? I mean, I don't think we're that far away from that.

Ram Narayanamurthy

No, we're not. And if you go back to 2020 when California had the power emergency in August. And what's great was a text message, a reverse amber alert that meant people were responsive and they saved two and a half gigawatts, which kept the grid on, right? So when people can do that manually, automating something like that would probably give us incredible amount of resources for demand flexibility.

Doug Lewin

So all of this demand flexibility is happening at what y'all call, and obviously people have been talking about this for a decade or so, but again, I think the technology and the discussions are advancing . The term, a term I really like, grid edge. And I think it's very interesting that, in my view, and I think in the episode with Hala Ballouz of EPE, we talked about this where on her company's website, it's a firm of electrical engineers and they have this image where like, you're sort of have this circle that was the grid and what was inside the home or building was kind of outside that circle until fairly recently. And now the circle is widening and we're recognizing that these devices, all the things we've been talking about so far and a lot more actually can be considered as part of the grid. So the grid edge, you know, was sort of like outside the grid, the edge was sort of outside and now the edge is being brought in. Can you talk a little bit about how you guys think about the grid edge and maybe what are some of the other things that might actually become part of the grid that we haven't even talked about yet?

Ram Narayanamurthy

So, we've been kind of thinking about how the edge is blending, right? As we think about, and there's been a lot of discussion on new loads, as you think about how we are getting more technologies and more integration, whether it's with EVs in the home and trying to balance your EV load with your batteries, for example, right?

What it comes down to is that whatever you do inside the home or the building is going to impact what you do on the utility side, what it means for the size of the wires, what it means for the size of the transformers, what it means for the size of the feeders. And so we are taking an expansive definition of the grid edge going from what we call, we are now defining it as going from the feeder on the utility side to the plug on the customer side.

And why does that matter? As we look at homes today, many homes have 200 amp panels. You can either go up to a 400 amp panel to get your electric vehicle charging installed and your battery installed, or you can implement technologies. One of the technologies you're working on is what's called low power heat pumps. Heat pumps that can run on 120 volts, so you're not having to upsize your breaker. Technologies that we're working on include splitters so that you can actually manage the load within the home. Smart panels. There's all these technologies that help you manage the energy use so that you're not triggering upgrades on the utility side. There's been many stories where people want to put an EV charger and then they have to wait eight months, pay $10,000 because their distribution line has to be upgraded right there. Their grid edge has to be upgraded there. Meter has to be upgraded. By looking at this as an integrated whole we are now optimizing end-to-end all the way from the plug to the feeder. And what that does is it helps us reduce the time to adopt clean energy, and it substantially reduces the cost to adopt clean energy. So that's why our definition of the grid edge is much more expensive. What it does, it brings in people who haven't worked together before, together. And we are trying to enable that matchmaking to happen. We are trying to enable utilities and grid operators and distribution planners to understand what people on the customer side are doing and vice versa. So that people on this side, like battery installers or EV charger manufacturers can understand how they can help the grid on the other side.

Doug Lewin

Yeah, so, so important, such an important mission and work. Let's talk about sort of how the rubber meets the road here. You guys are doing something called the Connected Communities Program and you're personally involved with that. Can you tell us about the Connected Communities Program and how it's connected to everything we've just been talking about?

Ram Narayanamurthy

Yeah, the word connected is in it, right? What I think is happening is a confluence. Which is Connected Communities is about the fact that your good edge is where your electric vehicles, your rooftop solar, your battery installs, your heat pumps, they all come together. So for us, Connected Communities is about understanding how a community of buildings that employ all these different clean energy resources can optimize and work together to right size the grid on the other side. The whole thing is the big discussion has been we have new loads coming. People in utilities haven't seen this kind of or projected this kind of load growth in like 50 years. And the load growth is not just about how much we have to generate. It's actually hitting at the edge of the grid.

As we get more electrification, more EVs, it's hitting at the edge of the grid. Upgrading existing distribution lines is very expensive because we already built out our communities, our cities on top of it. So for us, a Connected Community is about how we are going to manage all these new loads and how we are going to right size the grid to manage the load growth. And this way you're optimizing for the entire system, not just a single element of the system.

Doug Lewin

Yeah, I love some of the language you guys have on your website, I think is really quite descriptive of this. So the goal of the program you have on there is to “validate grid edge technology innovations in real world situations and provide new tools for utilities, grid planners and operators, automakers and smart charge management service providers and the communities they serve.” Can you talk a little bit about some of the early results of connected communities? You could talk about anything you want. One of the things I'm really interested in though, Ram, is, and you sort of alluded to it, what you were just saying, and it's in that statement that I just read there. There's different levels, different places. And I know you're an expert in grid edge and in demand flexibility, not necessarily in Texas, but in Texas we have this where we've got the transmission system operator ERCOT, right. And then you've got distribution utilities. And sometimes there's not a whole lot of communication between those, right? And I know that happens in other places too. So you can talk about examples from other parts of the country. And then, to say the least, the transmission system operator rarely understands at the plug level. They might understand customers that are really big ones. They talk to the factories, the Bitcoin miners, the data centers, but not necessarily a residential customer. So what you've got in that statement that I just read is trying to kind of, again, connect is in the name, connect those different layers that seems incredibly difficult, incredibly worthwhile as well. How has it gone so far?

Ram Narayanamurthy

Yeah, great question, Doug. Yes, it is incredibly difficult, right? And we're not going to solve everything in one go. But what we're trying to do is take pieces of it and solve for the pieces. One of the unique things we have done, Connected Communities, what we just released is what we call the Connected Communities 2.0, which is focused on load growth. Connected Communities 1.0 came out about four years ago. So, part of what we have done is we have looked at those projects, not as projects by themselves, but as a cohort of efforts. A couple of those projects are working with affordable housing properties, looking at how do you decarbonize affordable housing while still being able to integrate with the grid. So projects in New York, for example, with New York City Housing Authority, where New York City Housing Authority has 182,000 units. They're like the size of a city. And what we're working with them is the fact that, you know, they are sitting on infrastructure that is completely not sized for them to add EV charging for affordable housing communities or for putting heat pumps in. So we're looking at how do you actually structure these, whether it's geothermal, whether it's low power heat pumps, whether it's modifying your steam systems. How do you do all of that so that at that scale, you can actually decarbonize their building stock?

Now, with regards to others, we are working with Ohio State, for example. Ohio State is one of those examples where it's a whole campus in itself. And there, they're working with the PJM market. It's a little bit similar to the Texas market, right? In that they are a large scale aggregator. They're working directly at the market. And they're looking at how they can apply demand flexibility within the campus, so that they can minimize their inflow and outflow to the grid.

And there's another example where we are working with Rocky Mountain Power, which is a utility in itself. And what Rocky Mountain Power is doing is they are looking, they are implementing demand flexibility in different places in Salt Lake City. They're working with affordable housing, where they have designed affordable housing, put in EV charging and manage the load of that building. They're working with new home developers to have aggregated batteries. They're working with the City of Salt Lake's transit center looking at bus electrification. But what they're also doing is because they are the utility, they are taking the demand flexibility from all these very disparate resources and aggregating it to help them with their system. Whether it's for resiliency, whether it's for resource adequacy, whether it's for avoiding generation, they're taking all these different elements and putting it together for their system. So if you apply it in the Texas context, right? Texas, as you mentioned, is a unique, very unique marketplace in the US. Your distribution and your transmission operators have very little connection, and your distribution operators are not allowed to work with the retail or the end customers, right? So you have these little, what I call silos that they operate in. And so, part of what we would love to see is that we can take lessons learned on how the customer side is able to provide the flexibility and maybe that enables your retailer to work with your distribution operator to actually put those two together and provide a more efficient, better coordinated resource back to your transmission operator. It could also be seen applying for Austin Energy or CPS San Antonio because they are both the retail and the distribution operator. So they could directly apply some of these lessons learned.

So that's what we are trying to do with the Connected Communities. There's a whole cohort of 10 projects around the country. Unfortunately, none of them are in Texas, maybe looking into the future, maybe some of the version two, we could have more projects in Texas. But each of them is taking a different example of how to optimize for the grid. There's one in Southern California with KB Homes and SunPower, where they're looking at community microgrid and looking to provide resilience at the community scale and having one neighborhood with batteries inside every home, another neighborhood with a community microgrid, having V-to-G, actually it's V-to-B to provide resilience for those homes. So there's multiple examples and our hope is that we can take the lessons learned from each of those examples and apply it across the country for different utility structures.

Doug Lewin

With that last example, Southern California, you said it's not V-to-G, it's V to what?

Ram Narayanamurthy

V-to-B, sorry, vehicle-to-building.

Doug Lewin

Vehicle-to-building. Okay, okay. Got it. Got it. So that could be a home or it could be an apartment building. The idea is you don't necessarily need to inject the power into the grid, but if it's going to the home, that's reducing the demand that the grid needs to provide to that home.

Ram Narayanamurthy

Yeah. And it also does provide resilience. So most of the stationary batteries are going in because people want backup power. And if you can provide your backup power to your vehicle, then you don't probably need a stationary battery to provide that resource.

Doug Lewin

Yeah, you know, it's interesting. So Texas does have this, aggregated distributed energy resource pilot. And the way it's structured is either, well, so a load serving entity in the Texas parlance has to provide it. So that'd be a retail electric provider or a muni or a co-op. The first one to inject power from this pilot into the grid was Tesla. The second was actually Bandera Electric Co-op.

There is a task force working on these issues. So should there be a Connected Communities 2.0 project in Texas, excuse me, we'd want to bring that project into the task force to be talking about what's going on there. But just what you were talking about, like there is, that is a barrier that in Texas, stakeholders are working to overcome is that ERCOT is so used to that transmission level, right? Really, really large loads over 700 kilowatts you know, and so now you're getting down to a customer premise and, and it's one thing for batteries cause you can kind of measure that directly, but then you start getting into aggregations of thermostats and that's not really something they understand. So I would imagine some of these lessons learned actually might be applicable, to the folks that are involved in this pilot and on that, on that task force. Do you think that's probably right?

Ram Narayanamurthy

That's probably right, yeah, because getting those pilots, getting the data, and knowing how the data can be transferable to your particular situation. So if it's the electric co-op, yeah, they can adopt those results.

Doug Lewin

And it's probably, I guess it's different for each of these areas you're talking about. One of the things I like to think about and talk about and try to understand more basically, cause I think it has really big implications and I don't think anybody's actually sort of figured it out yet is how do you actually like manage, what is the model for managing all those distributed resources? Right, Ram? You hear a lot about a distribution system operator kind of a model where somebody's sort of like, there needs to be some orchestration of all of that. That could be a market and a market signal. It could be a DSO that's sort of just like a transmission system operator is matching supply and demand. I could even envision markets on sort of a small level, particularly though, like behind a really congested area, right? Where power prices are really high and maybe just like in the bulk power market, you have some kind of an auction where big power plants come and offer their power in and then it goes up a bit stack. Maybe you could do that on the distribution side. Does any of that come into this project or is that maybe a little a little further afield than where you guys are going with this?

Ram Narayanamurthy

Actually one of our other offices, Solar Energy Technologies Office is actually looking at a distribution system operator, what I call a test bed, through another effort called Strives. What we are trying to do is, I think of the DSO model as something that's maybe five years down the line, right? And there's some business model implications that have to be worked out that have to be worked out in the regulatory context. So it's a little bit more challenging. But what we're looking at is independent of whether you have a DSO, or it could even be the regulated utility who's actually managing all these resources. How do you actually, we are working on how do you actually get these resources aggregated so that it can provide your distribution services or bulk services. And so for us, it's almost agnostic of having a DSO model but looking more at the technical feasibility.

The other thing we are looking at is distribution planning practices, because today a lot of the distribution planning practices,As an industry, we have never really focused on distribution planning. You just added up the loads, you put a transformer and you just walked away, right? Now we are getting to the point where we need a lot of these additional loads on the distribution side of the network. And looking at these new technologies and how the stochastic nature of these technologies, because with controls, you can go up, down, etc. That has never been a part of distribution planning. Now, can you actually use controls, validate with field data, and use that to revise your distribution planning so that you are not oversizing the grid? So that's an area that we are focused on a lot.

Doug Lewin

I think that's really, really smart. And I will often do that. I want to jump ahead to that DSO thing, which is kind of the shiny object. And I do think it'll be relevant in the longer term, but it's a bit of a crawl-walk-run, isn't it? And like the, the crawl or even the walk, if you will, is really doing some of that distribution resource planning where you're really looking at the distribution grid. And like you said, obviously there's some of that that has happened. It's usually internal to a utility. There's usually not a whole lot of, hey, maybe there's a provider out there that could bring this solution at the grid edge that would obviate the need for this transformer or substation upgrade. Now we're very much at the point where if we're not actively doing that work, I'm using sort of the royal we here, but anybody involved in the power industry isn't involved in doing that work. We're just going to see costs pile up so high that the system could potentially break. Right?

Ram Narayanamurthy

Yep, absolutely. I think that's the bigger concern, right? Because you look at the projections for load, whether it's for data centers, whether it's for EVs, whether it's for building electrification, the load projections are pretty, I mean, it's pretty significant. So being able to look at non-wires alternatives, do we really need this transformer, right? And we were meeting with some home builders and it's not just the how many transformers do you need, but also the availability, right? So getting all of these optimized using better planning methods would really enable all of us because it keeps your costs down for the power. It makes sure we are not completely overbuilding the grid because we don't have enough data. That's part of what we're trying to do. We're trying to get enough data at the grid edge so that the distribution utilities can do better planning and optimization of the distribution curve.

Doug Lewin

Yeah, I had a meeting recently with a lot of folks that are utilities reps. It’s just a great group to think and plan with. And one of the things that really emerged from this particular meeting was that intersection between planning and operations and how we really need to get better at that and create that kind of loop where there's planning and then you're operating and getting the data and then you're doing better planning, which leads to better operations. And it's like this virtuous cycle. Can you give an example Ram, just pick one of the examples form Connected Communities, where the distribution planning function that is so critical maybe is happening exceptionally well?

Ram Narayanamurthy

I will take one of the examples, which is in Seattle. There is a project that's going on in Seattle working with a number of the affordable housing developments. And what they're doing is, Seattle is unique in that there's a lot of electric resistance heating. But what we're doing with this project is replacing those electric resistance heating with heat pumps, and then using that extra power that's been released, because now you have extra capacity in the building, right? Because your resistance versus heat pumps, like, you need about a third of the power requirement to actually power the building? Now, how do you use that extra capacity? What do we do with it? Add EV charging, for example, right? But it's also going beyond the building itself. What can you do to relieve congestion on those lines? And that means that you're looking at the loading on that feeder line, and then looking at how you can optimize at the building level to help the overall distribution system.

So it is demonstrations at a smaller scale, but data at a larger scale that can then be used for better planning. I think one of the analyses that Seattle City Light has done is that if you have unmitigated expansion of EVs and heat pumps, etc., that they might need maybe one and a half times more power than they have right now. But if you can actually implement energy efficiency and demand flexibility, you could maybe get it down to maybe a 50% increase. What they're looking at is: we don't have infinite amount of power that we can bring into a region. How do we optimize what we have? And then how do you optimize it all the way from the bottom to the top?

Doug Lewin

I'm so glad you brought up an example that uses resistance heat. We have a whole lot of resistance heat in Texas and that was one of the problems FERC and NERC cited in their report post Winter Storm Uri. We have something like four million homes and homes includes, of course, single family and multifamily units. And there are a lot of multifamily units. I've been talking to a lot of people that are working in multifamily on energy efficiency projects. That there are some that it's not even the backup heat. I don't know if this is how it was in Seattle. It's the primary heat. And so it's just insanely, massively inefficient, which is, that's the negative side of it. The positive side of it, as you just described is, hey, if you could actually fix that problem, now you're going to have lower bills for the residents that live there. And you've got more capacity on that feeder that now you don't have to go and expand and add cost to everybody. Really interesting example.

Ram Narayanamurthy

Right. Yes, absolutely. I think one of things with Seattle and it's similar in Texas, right, is that when your electric rates are low, then you get a lot more electric resistance heat. But being able to drive efficiency, and I think it's going to be the same in Texas, if you can drive more efficiency, you're going to free up a lot of capacity on your distribution grid, which, who knows, I don't know what the number will be, but it could even be enough to help you with resource adequacy on the bulk grid.

Doug Lewin

Oh, in Texas, I have 100% confidence it would help a lot with resource adequacy, right? Because resource adequacy is, do you have enough to supply to meet the demand, right? And Texas has just taken $5 billion of taxpayer money in order to subsidize new gas plants. You can also, and whether or not that's gonna be enough, we don't know, but what they're doing is focusing on one side where they're increasing supply. The other side of that coring is how do you reduce demand through energy efficiency and in Winter Storm Uri, you know, we don't know exactly what it was, but it was probably somewhere on the order of 20 to 30 gigawatts. I've written about this before. We'll put a link in the show notes to the data on this. And again, it actually appears in the FERC and NERC report.

Great stuff there. Do you guys have any sort of case studies published on Seattle? If you have anything on that, send it to us and we'll add it to the show notes.

Ram Narayanamurthy

The project is still in development because all these projects are in the phase of trying to get things installed. But I think if you have any analysis, we can send it over to you.

Doug Lewin

That's brilliant. Okay, great. And I meant to say earlier, Ram, I'll just say now, and we will put links in the show notes to this, that the Connected Communities is not only at the Building Technologies Office, but is a collaboration. Correct me if I've got this wrong, but I think this is what I saw, with the Solar Energy Technologies Office, you mentioned some of the work they're doing earlier, Vehicle Technologies Office and Office of Electricity. It's really great to see there's great work going on in each of those places. Good to see you guys sort of collaborating across those different areas of DOE.

Ram Narayanamurthy

I think that's the future, Doug, which is that we have to look at this in an integrated manner. If we don't, I think we're going to end up investing more than we have to and increasing costs more than we have to. So I think it's great that we were able to work with all these offices. In fact, we're also working with other offices like the industrial office, which is working on data centers. We are working with a geothermal office. We are working with potential partnerships with the Hydrogen Fuel Cell Office because that's also an element of providing the resilience.

Doug Lewin

Absolutely. Yeah, not only will cost be higher if we don't have that collaboration, I think that the outcomes in terms of reliability and resiliency, not even to mention sustainability, will be worse without that.

Okay, let me ask you, you've touched on this a couple times because you've been talking about affordable housing, but I wanna just dive a little bit deeper into this point is, how do we actually ensure, because there's all this technology coming we're talking about, electric vehicles and heat pumps and thermostats. Obviously all these things have a cost associated with them and there's unfortunately a very large percentage of the population that is just struggling to pay the next bill and isn't really necessarily thinking about getting a heat pump or an electric vehicle. How do we make sure these technologies and the benefits are actually accessible and affordable to everybody, not just those with enough disposable income?

Ram Narayanamurthy

It's a great point. So I'll go back to an initiative we launched last year. It's called the Affordable Homes Earthshot. And so DOE launched eight Earthshots. This was the last one that we launched. And the focus there was we said we are going to look at this concept of what we call trickle up of technologies versus trickle down. Traditionally, technologies go to the people who can afford it. And then it becomes more mass produced and commoditized and hopefully it reaches everybody. But what we wanted to do was focus on technologies that can be specifically applied to manufactured homes and multifamily homes. That we can make that happen, especially in an era where we have these great rebates and incentives through the IRA and some of the other utility programs around the country and state incentives in many parts of the country. Can we now have technology specifically addressed to low and moderate income customers that can help us achieve those goals? You don't want to saddle them with the first cost, right? But if we can make these technologies more compact, more efficient, but also a smaller form factor, for example, so that you can actually fit into closets in apartments, for example, right?

So how do you actually build these technologies that are unique, that are a unique application, make it cost effective, and then use the rebates and the incentives to offset those costs so that you can get into the buildings. Another area is trying to figure out creative financing for affordable housing, for example, how do you use things like tax credits and use that as part of your financing strategy to get these technologies in. Because if you can get the technologies in, a great example is electric strip heat, right? Getting a heat pump into those homes is expensive. But if you can figure out a way by which, make those heat pumps more cost effective, less cost, and find a financing model that can get those heat pumps into those homes, those people are, everybody's going to have lower bills because of the efficiency, right? So for us, that's a core of what we are trying to do, which is focus on those building segments so that we can get more of these technologies into people's homes and reduce their bills. And once you get those in, then you have the flexibility, additional capacity, all of those benefits accrue.

Doug Lewin

Yeah, and I think, and you alluded to this with the Inflation Reduction Act rebates, so the HOMES and sometimes it's called HEARs, sometimes it's called HEEHRA, it has these different names, but these rebates that are coming that are specifically intended for low and middle income and if folks are listening that are of higher income, you don't have to miss out, you can get the tax credits, right? So there's tax credits, but you have to have a tax burden to get the tax credits. So for those that don't have that tax burden, you have HOMES and HEAR.

And then I think the next place, Ram, you mentioned financing. So, people are having to pay their electric bill anyway. So if you picture somebody with a, you know, two, three, I mean, in Texas, sometimes it's not uncommon for people to have 400 and $500 bills. And you're basically saying that the heat pump can actually bring that electric bill down by X number of dollars, call it 100, $150 a month. And then they're paying less than that in monthly, you know, payments, whether that's through the bill or through some other mechanism. So that financing piece is really key because while the vast majority of the population doesn't have enough upfront capital, or even if they did, just aren't going to choose that may not be the place they want to put their capital. But if you could spread it out and then reduce the bill, that makes it much more attractive.

Ram Narayanamurthy

Even for people who can afford it, $5,000 or $10,000 is not an easy thing to put out of pocket.

Doug Lewin

And do some of the pilots have that financing piece as part of their… Are there any examples from the pilots that might be worth highlighting there?

Ram Narayanamurthy

There's a couple of pilots that are looking at the financing as an integral part of the pilot, but more of it is actually financing the property owners. So one of the projects in Boston is with the WinnCompanies, which owns around 120 affordable housing properties around the City of Boston. And what they're looking at is can they buy all this energy efficient equipment, put it in and finance it. But because they're a property owner, they don't pay the bill, right? So they want to look and can they use demand flexibility and revenues from the market to be able to finance, to pay the financing on these measures, right? So how do you actually make the numbers work out? And can we use the market, the electricity markets as a way of making all these split incentives and the numbers work out. So again, it's all exploratory, right? We have to explore this to figure out if there are models that we can make to work.

Doug Lewin

Amazing. Yeah, no, that's great stuff. I mean a lot of this is going to emerge, you know, whatever somebody had in their plan, they'll get into it and do some learning and find that, actually this thing is going to work better. So yeah, that's kind of the way innovation happens. Right?

Ram Narayanamurthy

Yes. And I tell people, a no answer is actually a very valuable answer when you're doing R&D because that means that you're avoided a whole lot of investments in a direction and you can go invest in a different direction.

Doug Lewin

Exactly right. So one more thing I want to ask you, then I'll see if there's anything else you want to add before we end. But I think this is really key. I mean, I'm trying through this podcast to expand the number of folks… the number of folks who are interested in the grid was expanded by Winter Storm Uri and then by Hurricane Beryl. And I think unfortunately, there's going to be more events like this as we get more and more climate extremes. But trying to talk about these things on a level that folks that are in the industry understand, but also folks that just had a tough time during Uri or just even worse than a tough time, just sometimes just tragic or horrific, whatever word you want to put on there. And now they want to know more about the grid. They're not grid experts. So can we talk just a little bit about the communication side of this? Like how does this vision of demand flexibility and grid edge, how do we make this kind of understandable and even desirable to a much broader range of people.

Ram Narayanamurthy

I'll answer in two parts. So first is: how do we communicate this, right? So when we look at what people want, this goes back to where I started my discussion. People want healthy, comfortable, affordable and resilient homes. So if we can communicate this in terms of, hey, we are going to make your homes healthier. I'll give you an example. When we did work with Southern California Edison, and we retrofitted affordable housing, and you took out single-pane windows, leaky single-pane windows and put in double-pane windows. The biggest thing that people noticed was not all the heat pumps that got put in, but the fact that now they didn't have a dirt ring around their window because they were close to a freeway with high diesel pollution. And now they felt their indoor environment was more healthier. So you have to be able to communicate those. We have to be able to communicate the fact that by doing some of these upgrades, you're actually gonna be more resilient. I go back to some of the tragedy that we heard about during Uri, right? People didn't have great insulation in their homes, which means their homes are now more prone to get colder and create health impacts. So if you're able to insulate the home, right, now you are able to protect that home and protect the people in those homes from getting as cold as they did. And creating, and now you have a real health benefit. You have a real benefit of providing better resilience and maybe avoiding some of the tragedy.

So that's, I think, we don't want a disaster to be able to communicate the benefits, but we want to be able to communicate the benefits of better indoor air quality, more comfortable homes, lower asthma rates if you are able to keep the homes better protected. So those are the things I think we can actually communicate and say, hey, this is going to make your home better. And of course, if you're able to get demand flexibility, they're able to get $25 or $50 every month from the utility, that goes into their pocket too. So that's where we have to really work on our communications of these energy benefits.

We call it non-energy benefits, but they're actually benefits of energy that are not related to just money. There's so many more benefits and we need to do a better job of communicating them.

Doug Lewin

That's right. That's right. And it is tricky because people's motivations are different. Some folks are, you know, they've got somebody in the home with asthma and that's really the thing that motivates them. Others, it's that bill and they really don't, they don't want the bill as high. I think control is another piece of this. Cause you've got a lot of like the gadget geeks out there that just wanna, they want to have the app and they want to be able to see there's, there's just, you know, just like you know, humanity is diverse and there's a lot of different entry points to this kind of thing. We have to be able to communicate with them and then connect with people where it's valuable to them.

Ram Narayanamurthy

That's where the community organizations come in because the community organizations work in their local communities and they understand what the needs of the community are. So if we can work with the community organizations, understand what the problem is and be able to frame the benefits of what we're doing as solutions to the problems in those specific communities, I think we can do a great job of communication.

Doug Lewin

I think that's exactly right. Ram, is there anything I didn't ask you that I should have? Anything else you'd like to add in closing?

Ram Narayanamurthy

Yeah, one thing I wanted to add is also the resilience aspect. So when we talk about Connected Communities, yes, it benefits the grid, but we are also very focused on customer resilience. And customer resilience for us is not just making sure there's a microgrid and you are able to provide power. It's about every little piece that you do in a home. Whether it's having one of the innovations that we have fostered is a 120 volt induction cooktop that can run for three days and power a fridge for three days. All those little pieces add up together. A better insulated home with the ability to cook and store food for three days means that you actually have a huge amount of customer resilience. So I want to add that we are very focused not just on the bigger policy picture, not just on the bigger goals for the grid, but we want to make sure that we also improve customer resilience as we go through this energy transition.

Doug Lewin

Does that 120 volt induction cooktop that powers the fridge, does that exist now or is that in R&D?

Ram Narayanamurthy

No, it actually exists. It's on pilot runs. So we funded it through one of our funding opportunities in 2020. It came on the market in 2022. It's a company called Channing Cooper that developed this. So, it's essentially an induction cooked up with a battery inside it. So you can even provide good services if you want.

Doug Lewin

You might've just sold an induction cooktop for Channing Cooper. Cause we're kind of in the market for once. I'm going to go look that up. If I can't find it, I'll ask you afterwards. That's amazing. I have not heard of that yet. There's more out there than any of us could know.

Hey, this has been great. And yes, the resilience piece. Look, I mean, you're talking to somebody in Texas, right? We're recording just a couple months after Hurricane Beryl happened. You know, we also had the largest wildfire the state has ever seen earlier this year. And I think we're rapidly heading towards, you know, times when people will lose power in advance of a wildfire. When there's wildfire conditions to hopefully prevent that wildfire, but that means people without power, so that passive survivability by increasing insulation, but then also having the power sources there on site, that is obviously extremely important to Texas. So glad to know about your work. Thanks for taking some time to tell us about it, Ram.

Ram Narayanamurthy

Yeah, and Doug, and one thing I'll finish off with is to say finding these solutions is going to require every entity across the board to work together, whether it's public utility commissions, the grid operators, the utilities, the customers, we have to create these collaborative efforts where all of them are able to work together understand what each other is doing and that will help us build a better energy future for ourselves.

Doug Lewin

100%. Thanks so much, Ram. Appreciate it.

Ram Narayanamurthy

Thanks, Doug. Thank you for your time.

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Innovation at the Grid Edge with DOE's Ram Narayanamurthy

Energy Capital Podcast (private feed for maxwang1990@126.com)