Shopping for energy
How a new power grid will give consumers more buying power
Our nation’s century-old electric grid—“the grid”—is one of the largest interconnected systems on earth. It consists of more than 9,200 electric-generating units with more than 1 million megawatts of generating capacity connected to more than 300,000 miles of transmission lines.
It has served Americans extremely well, providing adequate and affordable energy to businesses, factories and homes with most of us never really giving it much thought until our electricity bill shows up or our power goes out during a basketball playoffs game. Just about everyone has heard the saying “knowledge is power.” But now, with billions of dollars being invested in smart-grid technology, power will soon have knowledge.
The American Recovery and Reinvestment Act of 2009, signed into law in February by President Obama, dedicated $4.5 billion for smart-grid research, development, demonstration and deployment. Here are some of the ways these dollars will be spent: making the grid system more responsive to peak demand to minimize disruptions and fluctuations responsible for power outages and brown-outs; enhancing the security to protect it from potential terrorist attacks; providing a better system for accommodating renewable energy sources; and researching and developing technology that allows Americans the ability to buy electricity competitively.
These are exciting advances in a power-delivery infrastructure that hasn’t changed much since it was originally designed and put into place during the 1950s and 1960s. The system is now well beyond its design life and beginning to fail us more frequently.
Modernizing America’s electric system will require substantial capital investment over the next several decades. Our government’s vision for a modern electric grid is to make it reliable, secure, economical, efficient, environmentally friendly and safe. As President Obama stated, “The investment we’re making today will create a newer, smarter electric grid that will allow for broader use of alternative energy.”
Making a deal
In these times, the more interesting of these aspirations relates to economic conditions. An economic grid operates under the basic laws of supply and demand, resulting in fair prices and adequate supplies. What this means for consumers is that they will be able to purchase electricity based on a more sophisticated level than the current “time-of-use” pricing-rate programs offered by electricity providers today.
Consumers will decide if and when to use electricity based on the available rate, and real-time pricing and intelligent appliances will make it happen. It is similar to waiting for the price of gas to go down at the pump before filling up the car’s gas tank, only the appliances will automatically turn on or off based on pre-programming. Linked to the Internet, grid-friendly appliances can be provided real-time information on electric pricing per kilowatt hour and a homeowner could tweak energy use accordingly.
A clothes dryer, for example, could be programmed to wait for the right price before it turns on and finishes drying your socks and underwear. Thermostats, water heaters, dishwashers and even coffee makers could be designed to take advantage of fluctuating prices.
Homeowners would adjust their settings to decrease power consumption and save money during peak demand. Of course, consumers could override the controls at any point. Whirlpool, a major player in the appliance-manufacturing market, recently announced that by 2015 all of the company’s appliances would have embedded digital intelligence to make them responsive, transactive (day trading!) smart-grid devices.
Americans love electronic gadgets and are already very savvy using technology to find bargains. As comfortable as most people are with searching the Web for the lowest price for a pair of sneakers and how most everyone loves to save money, adding “bargain” electricity to their shopping list has a great chance of catching on quickly.