Comparisons To Demand Response
When the decision is made to curtail load, it is done so on the basis of system reliability. The utility in a sense "owns the switch" and sheds loads only when the stability or reliability of the electrical distribution system is threatened. The utility (being in the business of generating, transporting, and delivering electricity) will not disrupt their business process without due cause. Load management, when done properly, is non-invasive, and imposes no hardship on the consumer.
Demand response places the "on-off switch" in the hands of the consumer using devices such as a smart grid controlled load control switch. While many residential consumers pay a flat rate for electricity year-round, the utility's costs actually vary constantly, depending on demand, the distribution network, and composition of the company's electricity generation portfolio. In a free market, the wholesale price of energy varies widely throughout the day. Demand response programs such as those enabled by smart grids attempt to incentivize the consumer to limit usage based upon cost concerns. As costs rise during the day (as the system reaches peak capacity and more expensive peaking power plants are used), a free market economy should allow the price to rise. A corresponding drop in demand for the commodity should meet a fall in price. While this works for predictable shortages, many crises develop within seconds due to unforeseen equipment failures. They must be resolved in the same time-frame in order to avoid a power blackout. Many utilities who are interested in demand response have also expressed an interest in load control capability so that they might be able to operate the "on-off switch" before price updates could be published to the consumers.
The application of load control technology continues to grow today with the sale of both radio frequency and powerline communication based systems. Certain types of smart meter systems can also serve as load control systems.
The largest residential load control system in the world is found in Florida and is managed by Florida Power and Light. It utilizes 800,000 Load Control Transponders (LCTs) and controls 1,000 MW of electrical power (2,000 MW in an emergency). FPL has been able to avoid the construction of numerous new power plants due to their load management programs.
Read more about this topic: Load Management
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