Smart Grid: Demand Flexibility

Demand Flexibility
Automation can provide customers the ability to shift demand to a later time, without impacting service quality.

A report by the Rocky Mountain Institute, says that ‘demand flexibility’ can provide significant value for customers and the grid.

According to ‘The Economics of Demand Flexibility‘, automation can provide customers the ability to shift electricity use to a later time, without impacting service quality.

According to the report: “Residential demand flexibility can avoid US$9 billion per year of forecast U.S. grid investment costs— more than 10% of total national forecast needs—and avoid another US$4 billion per year in annual energy production and ancillary service costs.”

US$13 billion in avoided investment

“Utilities can potentially avoid $13 billion per year in forecasted grid investment needs by just making simple residential loads flexible and responsive to price signals,” according to James Mandel, a principal in RMI’s electricity practice and one of the author’s of the report. “With a projected $50 to $80 billion of investment needed annually for the grid in the next 15 years, demand flexibility takes a big bite out of those numbers.”

Customers could save between 10% – 40%

Customers can benefit too by saving between 10% and 40% on their utility bill, with savings totalling up to US$250 million yearly per utility territory analysed – these being Commonwealth Edison, Illinois; Alabama Power Company; Hawaiian Electric Company (HECO) and Salt River Project, Arizona.

“The total nationwide market is even bigger than our four analyzed scenarios,” said Mark Dyson, another coauthor of the report.

“Some 65 million customers in the U.S. already have access to time-varying rates today. Many of them could be saving money right away by opting in to these rates and adopting simple intelligent controls to make loads flexible.”

“The grid is rapidly evolving, and with it, many long-held assumptions about electricity supply and demand must be revisited,” said Dyson. “In this new, unfolding era, demand flexibility should prove a low-cost, powerful capability that truly benefits both customers and the grid.”