The fully networked smart grid offers plenty of benefits to both utilities and consumers, including dynamic energy pricing that can potentially keep the grid from, say, collapsing on ultra-hot days when demand is high. That's because after seeing that increased demand has made running the AC incredibly expensive, customers might choose to be a little hot in the name of saving a few bucks. This also means, theoretically, that intermittent sources of power like solar and wind aren't wasted. But could dynamic energy pricing, instead of being a utopian dream of market efficiency, actually bring down the power grid?
A new report (PDF) from MIT says it's possible--if utilities aren't careful. Researchers at MIT’s Laboratory for Information and Decision Systems recently illustrated the problem: It's around midnight and demand is low, which means that electricity prices are also low. But if too many people try to take advantage of these low prices at the same time, a massive spike in demand could result, potentially causing the power grid to collapse.
Customers want to take advantage of low prices whenever they can--if they didn't, dynamic energy pricing wouldn't work. But if consumers respond to price fluctuations strongly (which they have to do in order to make any sort of difference in demand), the grid could grind to a halt.
"For the system to work, supply and demand must match almost perfectly at each instant of time," says Mardavij Roozbehani, an MIT research scientist, in a statement. "The generators have what are called ramp constraints: They cannot ramp up their production arbitrarily fast, and they cannot ramp it down arbitrarily fast. If these oscillations become very wild, they'll have a hard time keeping track of the demand. And that's bad for everyone."
There are ways around this. Power companies could potentially offer energy price updates hourly instead of every few minutes. But while this protects the grid from dangerous oscillations, it also minimizes the usefulness of dynamic energy pricing--because sometimes, demand and energy availability do fluctuate quickly.
One potential solution that Roozbehani suggests: having customers give utilities information about how they would respond to price fluctuations at different times of day and, and then customizing pricing accordingly. This would, of course, require a lot of extra work on the part of utilities. But ultimately, it could protect them--and us--from an unstable grid.
[Image: Flickr user widerbergs]