This post is part of a collection on the electric power sector. See the post Electric Feel: how to flip the power sector on its head for more.
In order to provide reliable energy flow to the grid, utilities must produce (slightly) more electricity than is being consumed at any given moment. If the system is too close to equilibrium, sudden spikes in consumption will cause ‘brownouts,’ which are so called because of the dimming effect they have on lights.
Update: An interconnected system like our power grid provides both resilience and susceptibility. The Oil Drum recently updated an article that was originally published in January 2008 called, The Failure of Networked Systems. David Clarke’s main thesis is that the petro-dependent world we live in creates an illusion of stability, while actually being precariously balanced.
There is a critical angle for piles of sand–a level of steepness that the slope cannot go beyond without sand starting to roll down the slope. Imagine that, as you add sand, you colour red all of the areas of the pile that achieve this critical angle (and are thus on the verge of an avalanche). You will notice that the red patches appear as tendrils running down the side of the pile. As you add sand to the pile it gets higher and wider – the pile gets steeper and more little tendrils of red appear. Eventually you will see the tendrils of red start to interconnect.
If you drop a grain of sand on a red area then you will precipitate an avalanche. If the red area is interconnected with other red areas then all these areas will be drawn into the avalanche. If the red area is isolated, then the avalanche will be confined to one red tendril running down the side of the pile.

The area affected by the Northeast Blackout of 2003
That’s how a series of random, though common, events brought down the electric grid providing power to more than 55 million people in the Eastern United States and Canada in 2003.
But this article isn’t about the problems brownouts pose, it’s about the solution: demand response.
Because reliability is a key tenant of the utility business model, they do a lot to prevent any type of blackout. Luckily, electricity demand can be predicted according to expected weather, day of the week, time of year, etc. In order to meet this demand fluctuation, utilities must build power infrastructure capable of meeting peak-of-the-peak demand, which leads to an astonishing amount of capital investment which lays idle for most of the year.

Electricity demand is predictable.
Electricity consumption usually peaks in the early evening. Consumption is constantly watched and the amount of energy let onto the grid is adjusted accordingly. Utilities gather a lot of data to make estimates of the demand at any point in the current day. Power companies also charge more for peak power in part to pay for the peaking power plants and in part to incentivize use at another time of day.

“It's tough to make predictions, especially about the future.”
Utilities are good at making these predictions because it is critical to their business, but they don’t like wasting capital on power plants which only run 4 hours a day. There is, however, an elegant solution. If the peak hours of demand are 4:00-6:00pm, minimize power use during that period. In the Energy Policy Act of 2005 the U.S. Department of Energy was mandated to study demand response and report on its benefits.
The basic idea is that if we can level off the peak electricity demand and shift part of that load to other parts of the day (preferably the low-load nighttime) we will 1) pay less for power, and 2) build fewer peaking power plants. In the same way that you may use an automated timer to water your lawn at night instead of during ‘peak play’ hours of daylight, we’ll run the dishwasher, drying machine, etc at night instead of the early evening when there are thousands of other people doing it too.
A friend of mine operates a ski resort in New Hampshire that pumps water uphill into a reservoir at night when electricity is cheap and runs the water through a turbine during the day when power is expensive to offset its own electrical costs. For more on pumped-storage hydroelectricity, click here. The idea is basically the same with demand response, if something isn’t a priority, wouldn’t you prefer to wait and pay less to do it at night? This can be achieved through automation, like your water sprinkler mentioned above, or by behavioral changes.
Filed under: centralized, electricity, demand side management, utilities