Thursday, April 30, 2009

Smart Grid and variable tariffs

President Obama's $787 bn fiscal stimulus contains significant investments in the emerging field of smart electricity grids (or more generally smart infrastructure), which uses smart meters (with computers to relay real-time the electricity consumption to the despatch center) for balancing out demand-supply imbalances. NYT has this description of an experiment by Chicago-based electricity utility, Commonwealth Edison,

"John Kieken of Manhattan, Ill., used to turn on the lights and run the washing machine, air-conditioners and other electrical appliances in his 106-year-old farmhouse whenever he wanted. At the end of the month he would get a bill from Commonwealth Edison, the big Chicago-based utility, and write a check.

Now he is in continuous conversation. He watches a Web page that gives him an estimated price for electricity at the current time, and he treats a kilowatt-hour as if it were a pound of hamburger or a shirt on a department store shelf; if it is on sale, buy now, and if not, wait. He routinely turns off an air-conditioner if the price rises too high, and if the price sinks low enough he turns off his oil furnace and heats with electricity instead... He has discovered that at odd times at night, the utility will pay him to use electricity, a quirk previously obvious only to wholesale customers."

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