Working From Home Is Here to Stay: How Can Utilities and States Adapt to the Impact on Energy Use and Greenhouse Gas Emissions?

Energy systems have served us well in the United States, driving unprecedented economic growth while supporting population and technological advancements. However, when COVID-19 shifted much of our work activity from offices to employees’ homes, it affected the grid and nationwide utility operations. Demand for electricity and gas rapidly changed. We began to see a transition in energy use that not only shifted peak demand across the day, but also shifted where and how energy was being used. Once a powerhouse of energy consumption, businesses and city centers shuttered, shifting energy use away from office buildings and toward residential neighborhoods.

And now, as we establish a “new normal” of daily habits and routines, utilities must determine which changes will continue and how to adapt.

Working Remotely is Here to Stay

Experts agree there is no going back to “the way things were.” The massive shift of employees working from home is here to stay.

Before the pandemic, only 3.4% of the U.S. workforce worked from home, but that number surged to 42% by August 2020, less than six months after the start of the pandemic. In a new report, the National Bureau of Economic Research predicts that 20% of all working days will be conducted at home even after the pandemic ends. 

Remote Work’s Impact on Energy Use and Greenhouse Gas Emissions

In 2020, U.S. energy-related CO₂ emissions declined by 11%[1] and overall electricity consumption plunged by 20% or more. But at the same time, utilities reported increased residential demand since people were spending more time at home[2].

While remote work can reduce CO₂ emissions and transportation costs for employees with longer commutes, “a day of working from home could increase household energy consumption by between 7% and 23% compared with a day working at the office,” according to the International Energy Agency (IEA). Energy consumption for daytime lighting, heating and cooling, and plug loads has shifted away from employers and on to employees and their energy bills as they spend more time at home.

In New York, the Independent System Operator noted a 2-18% decrease in overall energy consumption[3], while Columbia University researchers found a 23% increase in average apartment-level electricity consumption during the Monday-to-Friday 9am-to-5pm window in the same period[4].

Beyond the increased energy usage, spikes in residential demand can create other nasty side effects; In California, 2020 rolling blackouts were exacerbated by customers who spent more time indoors at home and increased their cooling demand during an August heat storm[5]. And in 2021, as we started to return to “business as usual,” energy usage began to increase. A recent study on electricity use found that the afternoon energy demand peak rose by 13% in Arizona in 2021, with overall residential energy use increasing by more than 10%. These rapid changes have caused utilities to struggle with managing load, creating power outages and a strain on grid infrastructure.

 How can States and Utilities adapt to the New Normal?

The rapid changes in energy consumption caused by remote work create additional challenges for utilities to provide energy safely and reliably. But remote work also presents a tremendous opportunity to reduce GHG emissions, while offering customers more choice and control over their energy use. So where should utilities start when navigating this new terrain?

• Utilities can support their commercial and industrial customers while reducing their own Scope 3 emissions by encouraging work-from-home days and the reduced commutes they offer.
• Utilities can offer more virtual services to customers, who may now prefer digital interactions.
• Utilities can also provide additional support to customers who may be experiencing abnormally high bills at home. They should reach out and take advantage of this unique opportunity to interact with their customers as they seek additional solutions to reduce energy use during the workdays and the weekends.

Whether they’re working from home permanently or have shifted temporarily to a more homebound lifestyle, residential customers are looking for ways to take control of their energy use and their bills. And this is where utilities can really shine: Residential energy efficiency and demand response programs offer opportunities for customers to eliminate leaks throughout their home, improve their HVAC systems, and even change their habits to use less energy during peak periods.

To manage changes driven by the shift to a work-from-home economy, utilities can benefit from working with a trusted partner like Franklin Energy to design and implement the programs they need to evolve with the new energy reality.

Contact us to learn more about our innovative program offerings that drive personalized engagement, and maximize community and grid benefits.

[1] U.S. energy-related CO2 emissions declined by 11% in 2020 - Today in Energy - U.S. Energy Information Administration (EIA)

[2] Working from home can save energy and reduce emissions. But how much? – Analysis - IEA

[3] COVID-19 and the Electric Grid: Load Shifts as New Yorkers Respond to Crisis - NYISO

[4] New Data Suggest COVID-19 Is Shifting the Burden of Energy Costs to Households - Coronavirus Coverage (columbia.edu)

[5] What caused California's recent blackouts? | Utility Dive