November 26, 2018

When “out in the boonies” doesn’t mean isolation

ACEEE Rural Energy Conference highlights digital technologies and new approaches to bring clean energy to rural areas and small towns

Written by
Anne Arquit Niederberger

I attended ACEEE’s inaugural event in Atlanta last month to learn about rural energy issues. Much to my surprise, the wonderful town of Healdsburg California, which I call home, is actually considered to be part of Rural America, as defined by legislation that supports the U.S. Department of Agriculture’s Rural Utility Service. Despite the proximity of San Francisco, we qualify for USDA’s clean energy programs – which actually makes sense, as we have a significant agricultural base and only about 11,840 residents. Of course, the focus has shifted over the years from prunes to wine grapes, but we still cherish our agricultural heritage.

In fact, 15% of Americans live in rural America.
Yet only 2% are still farmers.

Essential internet.

The second thing I realized is that, even today, lack of high-speed mobile or broadband connectivity remains a significant barrier to full participation in our economy and society for too many low-income households and people living in more remote rural areas. Twenty-five million people still have little or no high-speed broadband. Paraphrasing one of the presenters: If you don’t have internet access, you either move – a contributing factor to the historic decline in rural populations – or you struggle to access modern services of daily life that are rapidly transitioning online, such as tele-health, e-commerce or smart irrigation systems.

What a difference high-speed internet can make is evidenced by what happened in rural China; “Taobao villages” [1] flourished once previously isolated rural populations got internet access and began selling goods on Alibaba’s trading platform. Take Dongfeng village in Shaji town for example. According to the World Bank country Director for China: “In 2006, one migrant from the village returned to open an online shop to sell simple furniture. His success encouraged other villagers to do likewise, and by the end of 2010, the village had 6 board processing factories, 2 metal parts factories, 15 logistics and shipping companies, and 7 computer stores serving 400 households engaged in online sales throughout China and even in neighboring countries.”

Energy innovation happens here.

The most fascinating thing for the energy crowd, however, may well be the nexus between digitization and clean energy. The wide range of examples presented – such as the success that pioneering coops in Rural America are having deploying fiber optic broadband to modernize their electric grids and help their members better manage their energy, new financing and on-bill repayment programs or how the leadership of Ouachita Electric Cooperative overcame its own skepticism and outdated views on solar costs to demonstrate the strong business case for community solar – were truly impressive and inspirational.

Rural coops have one big advantage over investor-owned utilities: They exist only to serve their members, and they don’t have to answer to Wall Street. As a result, leading coops see themselves as service providers, rather than commodity electricity suppliers, with eye-opening results. Ouachita Electric has encouraged 10% of homeowners to undertake retrofits and lowered peak demand by over 35% (2 kW of peak savings per home), with a return of over 10% on each retrofit. These returns were used to fund their community solar project. And CEO Mark Case underscored that these investments into clean energy are bringing back jobs.

With parallel tracks, it wasn’t possible to catch all of the great case studies presented, but some can be accessed via the event website.

ACEEE’s inaugural rural energy event delivered on its objective of dispelling the myth that innovation doesn’t happen in rural areas – and that new technology can be adopted very quickly.

Many utilities are nevertheless grappling with how to provide great service to all customers, even in rural areas with poor connectivity.

High energy burdens, underserved by efficiency programs.

According to ACEEE’s Neal Elliott, rural areas have a 42% higher energy burden than urban areas. Yet lack of high-speed internet access may prevent people from participating in energy efficiency programs. Joe Fontaine at the Public Service Commission of Wisconsin presented research showing that rural customers — using a broadband-based definition — received fewer Focus on Energy incentives than others:

  • $2.75 in Focus incentives per capita for residential customers in rural census blocks
  • $4.83 Focus incentives per capita in the rest of the state.

With a priority on maximizing cost-effectiveness, rural customers can be left behind. Several examples from the event: It’s cheaper to target direct install efforts in densely populated areas; programs delivered through contractor networks reflect the concentration of contractors; and marketing can be less cost-effective due to media market complications or lack of energy coop participation.

Digital technologies to the rescue!

On the flip side, with access to high-speed internet, digital technologies can solve some of the challenges faced by rural households. Greg Krantz presented a case study about how National Grid overcame lack of reliable connectivity in 20% of their service territory to roll out their new, fully digital automated workflow system for the MassSave Home Energy Services Program across Massachusetts. In collaboration with vendors and contractors, they tested a number of options, including signal boosters (which delivered mediocre results), and ultimately found creative programming and offline solutions that worked.

E-commerce also offers new opportunities. Online trade has not only helped raise rural incomes, by supporting local businesses, but also made shopping more efficient. If stores are few and far between, e-commerce can be a godsend.

Enervee’s online choice engines are ideally suited to empower all online shoppers to choose efficient products that don’t cost more to buy and will cut energy bills over their lifetime. They also offer a new online retail channel to deliver incentives to rural households, that might otherwise be left behind through traditional efficiency program designs.

We look forward to exploring with some of the leading organizations we met how to leverage Enervee’s human-centric, data-driven technology solutions to meet the energy needs and challenges of Rural America, spanning 72% of the land mass and 42% of the U.S. population outside of metropolitan service areas.

Internet access can be a real driver of inclusion, efficiency and innovation for rural development, including in the energy sector.

Notes

[1] A “Taobao Village” is defined by Alibaba as “a village in which over 10% of households run online stores and village e-commerce revenues exceed 10 million RMB (roughly $1.6 million) per year.”

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