Engineering Systems Division: The Energy Box

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Engineering Systems Division The Energy Box

• Integrating Energy Efficiency and Consumer
  Behavior into the Energy Box Design
• by
• Kat Donnelly, PE
• June 3, 2008
• kdonnell_at_mit.edu
• Presentation for the House-n event Energy
  Behavior Change Low-Energy Homes

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Energy Efficiency (1970s) Dan Yergin Amory
Lovins

• With serious commitment
• Could consume 40 less
• Quality energy source
• Stimulates employment, innovation, environment,
  economy
• cheapest, safest, most
  productive alternative
• readily available in large amounts

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Kat Donnelly, PE kdonnell_at_mit.edu May 20, 2008
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Energy Efficiency (1970s) Dan Yergin Amory
Lovins

• Does not
• threaten international monetary system
• emit much carbon dioxide
• generate waste problems like nuclear
• cause Geopolitical issues

http//www.oiladdict.com/icons/bookcover_home.jpg
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Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Yet EE is lagging. Why? Policy
http//www.epa.gov/solar/energy-programs/state-and
-local/efficiency_actions.html
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Yet EE is lagging. Why? Market Economics

• Externalities (oil priced well below social
  costs) 15 to 50/bbl
• Military/security
  diplomatic/geopolitical
• Climate
• Other environmental
• Oil subsidies
• Bad price signals
• Little real/time, time-of-use pricing
• Little monitoring/feedback to customer

http//www.treehugger.com/cars-piled-up.jpg
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Traditional Economics Assumptions

• Agents
• Are rational,
• controlled,
• informed,
• selfish, and
• calculating
• Preferences are known, stable, and ordered
• Maximize their welfare
• Market conditions optimal

http//www.carbon-cutters.com/Energy_Security.htm
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Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Yet, EE is lagging. Why? Behavioral Economics

• People do not maximize welfare
• Follow suboptimal decision strategies
• Have very high implicit discount rate (/
  60/year) high time value of money, short-term
  view!
• Information asymmetries--lack good information on
  end-use efficiency alternatives

http//www.inhabitat.com/wp-content/uploads/_dl09.
jpg
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Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Do people know their preferences?

• Initial and relative positions/situations
  
• Affects perception of possible outcomes
• Inhibits rational energy consumption
• Psychological value function. People
  are
• Risk adverse for potential gains
• Risk seeking for potential losses
• Which means,
• Emphasize losses in marketing campaigns
• Use strategies with biggest impacts
• Reference Points Matter
  (set them effectively)

Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Effective EE Strategies Goal Setting and
Commitment

• Increases motivation, commitment, direction
• Increases adoption of
  sustainable behaviors
• See progress
  progress
  needed
• Develop new
  strategies
• Assess goals

Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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CommitmentGoal Setting
Total Goal (X.XX, X.XX kWh) Resets Daily or
Monthly
140.00 1000.000 kWh
(Cumulative Counter)
Halfway through time period (daily/monthly),
electricity pace should be half of the
goal Example expected electricity use as of May
14 relative to May goal
Counter
Real-time Consumption Gauge (kW)
Pace percent relative to expected electricity
use Projection expected end-of-month
electricity use given current pace
Zero
Goal Tracker (Resets Daily or Monthly)
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Effective EE Policy Feedback

• 1. Learning better understand how behavior
  influences energy usage
• 2. Forming habits
  new knowledge alters
  
  activities and causes a
  routine change
• 3. Internalization of behavior new
  habits change attitudes to suit
  new behaviors.

http//i181.photobucket.com/albums/x176/weirdscien
ce_photos/powercord_glow.jpg
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Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Use Technology ToDrive Behaviors

• Rational decision making shaped by
• 1. Abundance of raw data
• 2. Dearth of meaningful information
• Behavior and technology are closely interwoven
  throughout life
• Role of technology receives surprisingly modest
  attention in psychology and in policy making.
  (2007, Midden, C.)

http//fivepercent.us/images/electricity-use-sm.pn
g
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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The Energy Box What Is It?

• Home computer running specially-developed
  software especially intended to achieve peak load
  shaving
• controlling a combination of hardware that makes
  it possible to turn appliances on or off
  according to supply conditions
• Users can download and install (or write their
  own!)
• software onto their home computer
• different algorithms for different appliances
• Future migration to a Web-browser interface
• Can also be a stand-alone display in the house

Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Developing an Energy BoxA Systems Solution to
Energy Efficiency

• Address weakness in Consumer Behavior literature
• Achieve energy efficiency behavior change

ESD 2007
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Beyond Smart MeteringBehavioral aspects

• Consider consumer comfort and preferences
• Change attitudes (environmental, economic,
  geopolitical)
• Modify consumption patterns
• Take advantage of social marketing

Slide 15

• From Filipe Rodrigues, IST, MIT-Portugal Program

Kat Donnelly, PE kdonnell_at_mit.edu May 20, 2008
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Communication with the Consumer (Supply, Personal
consumption characteristics)
The Enabling TechnologyMeter Prototype Design
Source MIT Design Contest,
RPI Electronics Club Team Submittal
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Upgrading the Technology Processing on-board
Source Dane Kouttron,
Project Update May 27, 2008
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Upgrading the Technology Disaggregating the
signal
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
Source Dane Kouttron,
Project Update May 27, 2008
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Future Study Consumer Behavior Surveys
(forthcoming)

• Consumer Behavior Surveys Learn the
  attitude/behavior/intention relationship
• Demographic variables, dwelling and energy use
  characteristics
• Energy price and usage knowledge
• Attitudes toward energy scarcity, energy
  conservation, energy efficiency, sustainability,
  mandatory or voluntary conservation
• What kinds of things can people do to save energy?

http//www.concord.org/btinker/guide/footprint/in
dex.html
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Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Future Study Consumer Behavior Experiments
(forthcoming)
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Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Future Study Consumer Behavior Experiments
(forthcoming)
Social networking Establish personal
sustainability identification
Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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My Research Expected Contribution

• Low-hanging fruit
• Achieve 10 reduction in home energy use for
  pilot group
• Develop detailed user interface to influence
  consumer behavior
• detailed application of behavioral principles to
  energy conservation
• Barrier busting of current information
  asymmetries
• Develop supportive pricing and technology policy
  recommendations

Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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References

• Ariely, Dan. (Fall 2007). Consumer Behavior Class
  Lectures and Predictably Irrational (2008).
• Bagozzi, R. P. (1999). Utpal Dholakia, Goal
  Setting and Goal Striving in Consumer Behavior.
  Journal of Marketing, Vol. 63, Fundamental Issues
  and Directions for Marketing, 19-32.
• Bazerman, M. H. (1992). Neale, M.A.,
  Introduction to Rational Thinking in Negotiation,
  Part 1 Common Mistakes in Negotiation. In
  Negotiating Rationally (pp. 1-64). New York The
  Free Press.
• Darby, Sarah. (2006). "The Effectiveness of
  Feedback on Energy Consumption A review for
  DEFRA of the Literature on Metering, Billing, and
  Direct Displays." Environmental Change Institute,
  University of Oxford.
• Diamond, P. (Ed.). (2007). Vartiainen, Hannu,
  Behavioral economics and its applications,
  Princeton, N.J Princeton University Press.
• Ester, P. (1985). Consumer Behavior and Energy
  Conservation. Dordrecht, The Netherlands,
  Martinus Nijhoff Publishers.
• Houwelingen, J. H. v. (1989). W. Fred van Raaij,
  The Effect of Goal-Setting and Daily Electronic
  Feedback on In-Home Energy Use. The Journal of
  Consumer Research, 16(1), 98-105.
• Katzev, R., and Johnson, Theodore (1987).
  Promoting Energy Conservation An Analysis of
  Behavioral Research. Boulder, CO, Westview Press.
• Kelly, S. (2006). Customer Intelligence From
  Data to Dialogue. Chichester, West Sussex,
  England John Wiley and Sons.
• Lovins, A. (2007). Energy Efficiency Concepts
  and Practices Implementation Lecture, March 29,
  2007, Stanford University. (from iTunesU)
• Midden, C. J. H. (2007). Florian G. Kaiser, and
  L. Teddy McCalley, Technologys Four Roles in
  Understanding Individuals Conservation of
  Natural Resources, Eindhoven University of
  Technology. Journal of Social Issues, 63(1),
  155-174.
• Sheehy, L. (2003). Dingle, P., Goal Setting,
  Education, and Sustainability Living Smart in
  the City of Fremantle University of Australia.
• Yergin, D. Conservation The key energy source,
  In R. Stobaugh D. Yergin (Eds.) Energy future
  Report of the Energy Project at the Harvard
  Business School. New York Random House, 1979

Kat Donnelly, PE kdonnell_at_mit.edu June 3, 2008
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Policy and Behavior Interventions
Slide 4
Kat Donnelly, PE kdonnell_at_mit.edu May 20, 2008