Is smart grid technology too smart?

• 12 years ago (2011-08-03)
• David Flin

North America 998 Renewables 752

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Studies by the Massachusetts Institute of Technology (MIT) suggest that new technologies intended to increase use of renewable energy could destabilise the power grid if they are not matched with careful pricing policies.

Utilities have started equipping their customers’ homes with new meters with internet connections and increased computational capacity. One application of these smart meters is to give customers real-time information about fluctuations in the price of electricity, to encourage them to defer energy-intensive tasks until supply is high or demand is low. This is intended to ensure maximum utilisation of erratic renewables such as wind, reducing the need for back-up generators.

However, research from MIT’s Laboratory for Information and Decision Systems indicates that this policy could backfire. If too many people set appliances to turn on when the price of electricity crosses the same threshold, it could cause a huge spike in demand. Fortunately, the research also demonstrated that some relatively simple types of price controls could prevent huge swings in demand, but that stability would come at the cost of some of the efficiencies that real-time pricing is intended to provide.

Researchers found that if consumer response to price fluctuation is large enough to significantly alter patterns of energy use, then price variations well within the normal range can cause dangerous oscillations in demand. However, the researchers’ model indicates that partially shielding consumers from the volatility of the market could tame those oscillations. Minimising the risks of giving consumers real-time pricing information also diminishes the benefits. MIT researchers are looking at ways to improve the trade-off.