This article summarizes perspectives on both sides of the demand charge issue. Based on this review, it proposes practical initiatives to address key concerns about residential demand charges.
Integrating distributed resources into the smart grid.
The remedy for America’s gravest economic woes may lie in a smart grid that can deliver vast amounts of clean, renewable energy while enhancing our energy security and democratizing our energy system. Although regulatory questions and technical challenges might dominate the industry’s short-term focus, the smart grid’s driving forces parallel America’s long-term national interests—a fact that should guide ongoing technology strategies and investment decisions.
Smart grid technology allows energy consumers to actively participate in energy markets by deploying homemade distributed power (such as wind and solar) into the American marketplace and by exercising demand response options to control their own energy costs—for example, by scheduling dishwasher and laundry activities during off-peak hours. A fully integrated smart grid will foster the emergence of regional markets for distributed resources that can transform every American into an energy entrepreneur and every home into a power plant.
A growing number of smart grid technology and service providers are now marketing proven technologies that meet the challenges of integrating distributed resources. But the fulcrum of this new intelligent power grid will be distributed resource management systems capable of integrating, allocating and directing inputs and demand from smart cars, meters, smart appliances and home-generated solar, wind and geothermal power.
Economy, Security and Independence
The rising interest and massive investment in the smart grid space is now broadly accepted as the most transformative event to hit the electric power industry since the construction of America’s electric grid in the 1930s. Smart grid allows enhanced management of supply and demand in real time, including increased integration of renewable energy resources, and distributed generation, and customer participation in the energy marketplace. As illustrated in Figure 1, smart grid is now a growing global reality.
In general parlance, the term “grid” refers to the transmission and distribution system— i.e., the system of power lines, substations and transformers that brings electricity from power plants to end-use consumers. Smart grid visionaries are increasingly looking beyond the infrastructure—as critical as it is—to the broader potentials of grid intelligence.
The smart grid can be a critical component in solving four grave national challenges: a stagnant economy, energy reliability, energy dependence and national security. Investing in smart grid technologies will not only enable our transition to a cleaner energy portfolio composed of more reliable and resilient domestic energy sources, it will usher in a new era of prosperity.
America’s dependence on foreign oil cost our country almost $1 billion per day in 2010. Add to that staggering number the national risks from dependence on finite, carbon-based fuels that need to be tanked halfway around the globe. Our foreign oil reliance threatens the stability of our economy, our national security and our international leadership and prestige. The costs to