Harvey Michaels on Grid Optimization for Societal Benefit

Harvey Michaels is a Massachusetts Institute of Technology Sloan Business School lecturer. He teaches a popular course on Energy Management and Artificial Intelligence. He is also the Director of MIT's Clean Heat Transition Project. In this episode of Flanigan's Eco-Logic Ted and Harvey reflect on his career in energy management, for years at the forefront of energy efficiency and energy management as president of Xenergy and Nexus Energy. Now his mission at MIT is "to support student career objectives and to design and manage initiatives to create societal, economic, and carbon benefits."

Utility rates are discussed, and Harvey makes clear the need for rate reform. Why do utilities continue to offer flat electricity rates that send no signals to consumers? As other industries have done, such as airlines, Why not set dynamic rates that give consumers accurate price signals? Utility grids are inefficiently managed. There are times when power is very cheap. Flat rates -- like the average 33 cents per kWh in Massachusetts -- retard the adoption of beneficial electrification. What is needed, he makes clear, are rates that reflect marginal costs of power delivery... so that heat pumps and electric vehicles and other forms of beneficial electrification can be cost-effectively purchased and universally adopted drawing power at low cost periods and boosting utilities' load profiles.

Harvey and Ted discuss the nexus between customer action and utility policy. On one hand, AI and its machine learning is allowing consumers to near-automatically make smart energy management decisions and to lower their costs and environmental impacts. AI can take complex energy management and pricing signals to optimize on usage. Meanwhile, Harvey makes clear the need for policy reforms to combat climate change.

Yes, Harvey explains, that the utility sector is in a period of retrenchment. Politics is the challenge of the day. But from challenging times spring forth innovation. AI provides powerful decision-making capabilities, means of optimizing energy use to meet today's challenges. New forms of grid services such as virtual power plants and other controllable loads, provide means to meet consumer and utility objectives. While optimistic, Harvey is concerned about the urgency of the climate crisis. He is impatient for society to truly "connect the dots" and responsibly address energy management and carbon mitigation needs head on, to use the tools at hand and to meet our broad and critical societal objectives.