Demand Response - Smart Grid Application

Smart Grid Application

Smart grid applications improve the ability of electricity producers and consumers to communicate with one another and make decisions about how and when to produce and consume kWh. This emerging technology will allow customers to shift from an event based demand response where the utility requests the shedding of load, towards a more 24/7 based demand response where the customer sees incentives for controlling load all the time. Although this back and forth dialogue increases the opportunities for demand response, customers are still largely influenced by economic incentives and are reluctant to relinquish total control of their assets to utility companies.

One advantage of a smart grid application is time-based pricing. Customers who traditionally pay a fixed rate for kWh and kW/month can set their threshold and adjust their usage to take advantage of fluctuating prices. This may require the use of an energy management system to control appliances and equipment and can involve economies of scale. Another advantage, mainly for large customers with generation, is being able to closely monitor, shift, and balance load in a way that allows the customer to save peak load and not only save on kWh and kW/month but be able to trade what they have saved in an energy market. Again this involves sophisticated energy management systems, incentives, and a viable trading market.

Smart grid applications increase the opportunities for demand response by providing real time data to producers and consumers, but the economic and environmental incentives remain the driving force behind the practice.