Demand Response

I read an interesting article on how power companies will start getting in to demand response.  That is where they manage the grid for peak loads.  The goal is to move loads from peak times to keep the grid from being overloaded (and hence force brownouts).  The incentive to them is to avoid the costs of having to build plants that may not run at full capacity (until need at peak).

The consumer will most likely start to see tiered pricing because of this..its inevitable with smart meters. This will give them an incentive to move their loads as well.  After all you don't want to be running the dishwasher unnecessarily at 1pm if you know the electricity costs more. The problem is how do consumers know what the costs are at any time during the day?  Commercial customers that use a lot of electricity won't be the issue.  They already have agreements in place to reduce their energy consumption if notified by the utility.  A residential consumer might have a general idea about rates and act accordingly but it certainly won't really have anything to do with demand response.

The solution is to give them more information in real time so they can make decisions. A web portal with current usage and rates would go a long way.  They could get an automated phone call or text message with a notice about a demand response event (a really hot day for example) so they could defer some of their usage.  Even better would be to automate the process.  There has to be something on the appliance end of things and a way to communicate with it though.  GE is focusing on this with their new appliances.  Imagine a washer that is smart enough to say I'm not starting right now because rates are too high (or the utility sent out demand response alert).  I'll start in two hours and save you some money.

I saw a Carnigie Mellon study from 2006 that said if there was a 1% shift in peak usage it would result in a system savings of 3.9 billion dollars...not chicken feed by any stretch of the imagination.  So get ready it's coming.  I believe there will be a lot of opportunity in this space.