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SMART THERMOSTATS MAY NOT SCALE UP: An important new study finds that “smart” thermostats do not have a statistically or economically significant effect on energy use.

The problem occurs when the technology is “scaled up” and distributed to a broader population, John List, an economist at the University of Chicago and one of the lead authors of the study, circulated by the National Bureau of Economic Research Monday, told Breanne in an interview.

This is what List describes as a “voltage drop,” or the phenomenon of something failing to achieve its intended objectives upon its expansion (as well as the title of his new book). List, who is also the chief economist for Walmart and has worked for other companies, such as Uber and Lyft, is known as a pioneer of field experiments in econometrics.

The findings: Popular smart thermostat devices, such as the ecobee and the Nest, advertise annual savings of up to 26% and 27%, respectively, on consumers’ annual heating and cooling bills.

But the new study—which examined data from 1,379 households over a period of 18 months—found major discrepancies between these statistics, which assumed certain behaviors, and their actual use by the general public.

Instead of saving energy, in fact, researchers found the devices actually slightly increased electricity and gas consumption, by 2.3% and 4.2%, respectively.

In the case of home thermostats, the problem wasn’t necessarily one of usability: In fact, researchers observed, nearly all users with the smart devices programmed them almost immediately, and many did so with energy savings in mind.

The problem was how often, and to what extent, users deviated from the devices’ programmed schedules: Users were more likely to override the devices’ scheduled setpoints in ways that used more energy – i.e. when cooling, they set temperatures colder; when heating, they set them warmer.

Ultimately, researchers found “little to no evidence” that the smart thermostats reduced household energy consumption.

And, “[viewed through] the lens of climate mitigation, our results provide little justification for the amount of subsidies directed towards smart thermostats; such technologies have no impact on energy use and associated greenhouse gas emissions,” the study concludes.

When designing the devices, engineers modeled their estimates based on best case scenarios, List explained.

“If Commander Spock was given one of these, he would install it and use it correctly. But unfortunately, most households are like Homer Simpson,” he told Breanne. “They receive the technology and they go in and they undo the good stuff— in this particular case, they undid the presets, or they undid the defaults that came from the manufacturer. And when households did that, they undid all the ‘good stuff,’ and engineers’ estimates of what we would save in terms of energy.”

That’s a big problem for policymakers who rely on engineers’ estimates: According to the EPA, 170 energy providers currently subsidize the purchase of smart thermostats, and more than half of households in 20 states are currently eligible for a rebate on such devices.

The Inflation Reduction Act also offers consumers up to thousands of dollars in financial incentives in exchange for making certain energy-efficient upgrades.

The study is ultimately a “cautionary tale about policymakers, and about us as voters and constituents,” List said. “Let's make sure that when they claim these things will save the world and help everyone, that they're truly talking about policy-based evidence—and what I mean by policy-based evidence, [I mean], what does that policy look like in the real world?”

“And then we can be much more confident that what we're saying about the Inflation Reduction Act, or any kind of subsidy or tax, is an actual real effect that will happen in the real world,” he said.

Without that, it’s nearly impossible to gauge whether the products can work at scale: List said that the government must develop a “science of scaling” to avoid wasting taxpayer money on interventions that don’t work.

“It's one thing to invent a technology, it's another to get people to buy it,” List said. “It's third altogether, to get them to use it in both a cost-effective and energy-efficient way. And that's what happened in our particular experiment.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

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UK TO SLASH WHOLESALE PRICES OF BUSINESS ENERGY BILLS: The British government announced today that it will cap wholesale electricity and gas costs for businesses this winter in an effort to contain skyrocketing prices that threaten the survival of some businesses in the country.

Wholesale electricity prices will be capped at roughly $239 per megawatt hour (MWh) and gas at around $85 pounds per MWh, beginning October 1, officials said.

“We have stepped in to stop businesses collapsing, protect jobs and limit inflation," British Finance Minister Kwasi Kwarteng said of the cap.

The cost of the plan for Britain is unclear, Reuters reports, though Citi forecasters put the total somewhere between 25 billion and 30 billion pounds over the next six months.

"The difficulty with giving cost figure[s] is that this will depend on where the price of energy goes over the winter, and that's very difficult to forecast so I can't give you an absolute cost," said British Business Minister Jacob Rees-Mogg. "It will be in the tens of billions of pounds unquestionably," he added.

HERTZ SIGNS UP FOR 175K GENERAL MOTORS ELECTRIC VEHICLES: Car rental outfit Hertz, which plans for a quarter of its fleet to be electric by the end of 2024, said it intends to order up to 175,000 EVs from General Motors over the next five years.

The company announced its agreement with GM yesterday, which includes acquisition of Chevrolet, Buick, GMC, Cadillac and BrightDrop EVs across vehicle categories, from trucks to luxury sedans.

With the agreement, “Two iconic American companies that have shaped the evolution of transportation for more than a century are coming together to redefine the future of mobility in the 21st century," Hertz CEO Stephen Scherr said.

The EV sector just got a major boost from Democrats’ Inflation Reduction Act, which expanded the federal EV tax credit for purchasers and lifted a sales cap that locked some manufacturers’ models out of eligibility for the credit, but automakers are struggling with higher costs for materials and other supply chain issues. Some industry leaders have warned of a high likelihood that those problems get worse as demand increases.

PROGRESSIVE POLICY INSTITUTE BACKS PERMITTING REFORM: Congress should pass the Manchin-Schumer permitting reform proposal to best serve the green energy transition that Biden and Democrats seek, according to a new report out today from the Progressive Policy Institute.

Authors Paul Bledsoe and Elan Sykes assert that a “perverse” review and permitting process being carried out for the purpose of environmental protection is, ironically, impeding protection of the environment by preventing renewable energy projects from being stood up in a timely way (Average permitting time for renewable energy generation projects is 2.7 years, while for the transmission projects necessary to carry that renewable energy to consumers, it’s 4.3 years).

Congress can speed things up and cut down on the “often unnecessary and duplicative government reviews and nuisance lawsuits” causing such delays by setting harder two-year timeline goals and expanding categorical exclusions, as the Manchin-Schumer outline provides.

The Republican permitting bill also proposes those reforms, but the legislation “only indirectly and insufficiently improves problems with renewables or transmission siting while taking a much more aggressive stance on oil and gas development on public lands,” the report argued.

Don’t leave out gas: The Manchin-Schumer proposal as it exists now would support quicker approvals of fossil fuel projects, too, and natural gas explicitly.

That kind of diversification is necessary, Bledsoe and Sykes said, to serve global emissions reductions.

“Viewed with skepticism by some on the left — who view any new fossil fuel infrastructure as anathema — the growth of U.S. natural gas exports should be viewed as the best available course of action given the current circumstances of global energy markets,” they wrote.

Permitting language incoming: Final bill text for the Democrats’ permitting reforms, which to this point only exists to the public as a one-page summary of provisions, is supposed to be released today, Manchin said yesterday during a press conference in which he criticized Republicans for declining to get on board with the Democratic-led effort.

Sen. Shelley Moore Capito, who was lead sponsor of the GOP permitting bill, said she and her colleagues couldn’t be expected to back a bill they haven’t seen.

DENMARK DONATING TO CLIMATE CHANGE DAMAGE FUND: Danish development minister Flemming Moller Mortensen ​​announced a contribution of 100 million Danish krone, or roughly $13.4 million, toward a fund providing financial support for poorer countries to pay for losses and damages tied to climate change.

It is unfair that the world's poorest nations have to pay for climate change-related incidents despite contributing the least to carbon pollution, he said.

With its contribution, Denmark becomes the first U.N. member state to contribute to loss and damage funding. Scotland, which is not a U.N. member independently, announced it would provide to the fund last November as it hosted the COP26 climate change conference.

A WARNING ABOUT STRANDED OIL TANKER: NGOs are asking donor governments to quickly deploy funding to offload oil from a stranded off the coast of Yemen to avoid an environmental disaster.

Human Rights Watch and U.K.-based Save the Children are asking governments, including the United States and oil-rich countries in the Middle East, to provide funding necessary to offload 1 million barrels of oil from the FSO Safer, which has been stranded since 2015. Concerns are that the vessel could puncture or break apart and release oil into the Red Sea.

The Netherlands, United States, and Germany are scheduled to announce a successful fundraising operation for offloading the tanker today during the U.N. General Assembly, the Associated Press reported.

SEASON THREE OF “PLUGGED IN”: Former FERC chairman Neil Chatterjee joins Breanne to discuss a summer’s worth of energy concerns on this season’s inaugural episode of “Plugged In,” including the supply crisis in Europe caused by Russia’s war and its shutdown of gas via Nord Stream 1, grid concerns in California and the rest of the U.S., and pressures the Biden administration is facing to incentivize more domestic clean energy production. Listen to the episode here.

The Rundown

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Calendar

THURSDAY | SEPTEMBER 21

10:00 a.m. 366 Dirksen The Senate Energy and Natural Resources Committee will hold a hearing about battery and non-battery technologies for energy storage.

MONDAY | SEPTEMBER 26

The 6th annual, five-day National Clean Energy Week kicks off in Washington, D.C.