Dive Brief:
- Voltus and Resideo Grid Services are expanding their residential smart thermostat demand response partnership to serve Commonwealth Edison and PSEG Long Island customers, the companies said Tuesday.
- The move marks another step into the residential demand response market for Voltus, a virtual power plant aggregator that manages about 6 GW of distributed energy resources across nine North American wholesale electricity markets, said Voltus Senior Vice President of Growth Dan Svejnar.
- “Thermostats are the gateway device” to drive initial consumer participation in wholesale power markets and demand response programs, increasing the likelihood they’ll enroll assets like home batteries, water heaters and electric vehicles in the future, said Resideo Grid Services General Manager Dave Oberholzer.
Dive Insight:
The residential demand response partnership between Voltus and Resideo dates back to April 2022, when the companies launched a “bring-your-own-thermostat” program to serve some PPL Electric Utilities customers in Pennsylvania.
The companies launched a similar program last year for 1.2 million Ameren Illinois customers in MISO territory, not long after the system operator announced a potential 2.6-GW capacity shortfall in its central and northern regions. That program, which integrated smart thermostats from Honeywell Home, Google Nest and Ecobee, has signed up nearly 10,000 customers to date, Resideo said.
It’s too early to draw definitive conclusions about the benefits that thermostat-based demand response programs provide to grids, Oberholzer said. But he noted that Resideo manages thermostats with about 880 MW of “dispatchable capacity.”
“That starts to add up,” he said.
Voltus’s commercial VPP performed “above what was expected” during Winter Storm Elliott in December 2022, when a record 13% of generating capacity in the Eastern Interconnection grid system failed amid extreme cold weather.
“We dispatched our entire portfolio … with traders working around the clock” to allocate capacity during that event, Svejnar said.
The partnership between Voltus and Resideo offers residential customers “another avenue … to bring thermostats into load management” via wholesale power market participation, Oberholzer said.
ComEd residential customers receive $25 upfront and $10 annually after enrolling in Resideo’s thermostat VPP and meeting program participation criteria, according to Resideo. PSEG Long Island residential customers with Honeywell Home thermostats from Resideo earn $50 upfront and $35 annually, Oberholzer said.
Both Voltus and Resideo have seen significant increases in customer interest and awareness around demand response, Svejnar and Oberholzer said. Customer skepticism persists in markets and regions where regulation has been less favorable to third-party aggregators, such as MISO and parts of [Southwest Power Pool] but “we are overcoming the disbelief quickly,” as commercial and industrial customers, in particular, look to jump on the “gravy train” of demand response incentives, Svejnar said.
On the residential side, the role of smart thermostats as “gateway device[s]” is both a challenge and an opportunity, Oberholzer said. A thermostat is “something the consumer will have concern about” because it controls indoor comfort, which is why Resideo manages demand response events as delicately as possible, he said.
A poor customer experience with their thermostat could sour customers on enrolling other distributed energy assets in the future, such as water heaters, batteries and EVs, Oberholzer added.
“That potential [of VPPs] won’t be realized unless we bring the consumer along,” he said.
