Are smart technologies the key to a clean energy future?
From charging our phones to running a dishwasher, switching on the air conditioning to simply boiling a kettle, our daily routines are full of decisions that require energy. Our energy use tends to be guided by convenience, but the timing of these actions can also have a significant effect on a nation’s ability to transition to clean energy.
“This is an important concept to understand in the context of the clean energy transition,” says Dr Shefali Khanna, LSE Fellow in Energy Economics and Policy in the Department of Geography and Environment at LSE, whose research into the impact automated devices can have on people’s energy use is yielding positive results.
Why timing matters when it comes to clean energy
Electricity demand is not constant throughout the day, Dr Khanna explains, with usage peaking at certain periods – typically late afternoon and evenings as many return home from work. Utilities need to ensure that there is enough capacity to meet demand, even during sharp spikes. "This often means relying on more expensive or more polluting power plants to come online at those times, or investing in infrastructure that's only used occasionally,” she says.
Reducing the need for utility companies to access this more polluting energy source requires lasting consumer behaviour change. But habit-forming can be difficult, especially in an age that prioritises immediacy and convenience. This is where automated demand response (ADR) comes into its own. ADR is the focus of Dr Khanna’s research, which tests whether ADR could be the key to lowering demand at peak times, reducing the need for utilities to access “dirty” energy.
In a sense, demand response allows households collectively to function like a virtual power plant.
What is automated demand response and why might it help energy consumption?
“Automated demand response is a way of reducing electricity use during those peak periods,” explains Dr Khanna. “Instead of asking consumers to manually change their behaviour, what we do is offer consumers smart devices, like smart switches or smart thermostats. These devices may automatically switch an appliance off temporarily to reduce electricity consumption at peak times.”
The benefits extend beyond the household. By lowering peak demand, ADR can reduce electricity procurement costs for utilities, cut emissions by avoiding the need to utilise additional fossil fuel generators, and even defer investment in new power plants or grid upgrades.
“If usage can be brought down significantly, this could also result in reducing the need to invest in network upgrades that would otherwise be needed to meet peak demand, which could reduce electricity costs in the long run and mean lower bills for consumers going forward,” explains Dr Khanna.
“In a sense, demand response allows households collectively to function like a virtual power plant. But a virtual power plant that delivers power to the grid, not by generating electricity, but by temporarily reducing consumption so that the grid can remain balanced.”
The idea of consumers running their appliances at off-peak times is not new. Previously, however, demand response programmes have tended to focus on price signals – for example, offering households lower prices at off-peak times. These rely on consumers to not just buy into the premise but also maintain the motivation to build their daily routine around issues of cost.
“Research shows that residential consumers often pay limited attention to electricity prices, or they might simply forget to adjust their consumption,” continues Dr Khanna. “This is where automation can offer a promising alternative, because it removes the need for constant attention. Once the technology is installed, your demand can respond to changing price signals automatically, without you having to exert effort or pay attention.”
While automation may appear to be the ideal solution, there are still many important, unanswered questions around this potential. For example, will households be willing to adopt these technologies that allow automated control of their electricity use? This question is one of those driving Dr Khanna’s current research, which builds on the pilot project in Mumbai and Delhi.
What can India teach us about energy transitions?
To test the viability of these devices, a pilot study was run in Delhi and Mumbai – two of India’s largest cities – with researchers working in partnership with local energy suppliers.
“Cities like Mumbai are experiencing very rapid growth in electricity demand as incomes rise and more households adopt energy-intensive appliances like air conditioners, refrigerators, water heaters, etc. And so managing peak demand in these systems is becoming increasingly challenging.
“At the same time, India is expanding renewable energy generation. So this means that the availability of electricity supply will increasingly vary throughout the day depending on when that renewable energy is available. To run efficiently, electricity systems need more flexibility on the demand side so that we can shape demand to match patterns of supply,” Dr Khanna says.
The pilot, which offered smart devices to over 1,000 households enrolled in the study across the cities, provided encouraging evidence, indicating that automated demand response can meaningfully reduce electricity consumption. Around 80 per cent of the households had connected the smart switches to air conditioners, says Dr Khanna, with the rest choosing to connect the devices to a mix of appliances like refrigerators, electric water heaters and electric vehicle chargers.
Once the devices were installed, researchers triggered brief, 30-minute automated switch-off events in these appliances. Importantly, households were sent texts prior to each shutdown and had the ability to override these events if they wished, opting out using an app. Smart meters allowed the researchers to analyse in real time whether these shutdowns produced results. Despite this option, researchers saw a significant reduction in energy use.
“What we found is that we actually get quite large reductions in electricity use – about an 8.5 per cent reduction in household electricity consumption on average at the time of these events, with about a 15 per cent reduction during the evening peak hours, when electricity demand is typically the highest,” reports Dr Khanna.
Engaging households in reducing energy use
Building on this pilot study, Dr Khanna and her colleagues are designing a more expansive study, drawing on two key insights from the pilot.
“First, we found that automation itself appeared to be doing most of the work. So even though we offered incentives for people to avoid energy use at the time of these switch-off events, we found that once the appliances were connected to these smart switches, the level of financial incentives that we were offering had relatively little effect on how much electricity demand was reduced during these events.
“This suggests that perhaps households are not paying as much attention to the notifications we're sending them about how much incentive they can receive for reducing their electricity usage. But it might also mean from a policy perspective that households don’t need to be offered a very large incentive to reduce their electricity use as long as you are providing the smart technologies that overcome the attention costs associated with providing demand response.”
The second important finding, Dr Khanna continues, focuses on the issue of take-up. Although the pilot saw positive results, only a tiny number of people that were offered enrolment in the study signed up. “Even though we saw large reductions in electricity use at the time of these switch-off events, we had very low take-up rates. Only about one per cent of the households we contacted signed up for the programme."
This indicates two things: first, there is a need to understand what messaging works to encourage people to sign up to these schemes; and second, if this element can be improved, the potential energy savings are huge.
As a result, the next phase of Dr Khanna’s work is focusing on getting more households to sign up and to ensure they remain enrolled and engaged throughout the study. “This next stage will focus more on participation dynamics,” explains Dr Khanna. “We will be testing different types of incentive structures to understand what encourages households to enroll and stay connected and then also to comply with these automated events over time.”
A small change with system‑wide impact
As the research progresses, its findings could shape how cities like Mumbai – and many others around the world – manage the clean energy transition. Small, automated reductions across thousands of households may seem modest individually, but collectively they have the potential to transform grid flexibility, cut emissions and reduce costs.
“We’ve traditionally focused on building more supply’’, Dr Khanna says, “but there’s enormous, untapped potential on the demand side. If households can make these relatively minor automated adjustments, the system will become cleaner and more resilient – and at a much lower cost to us all.”
Dr Shefali Khanna was speaking to Jess Winterstein, Deputy Head of Media Relations at LSE.
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Shefali Khanna
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