It’s baking in New York City, with temperatures hitting over 100 degrees (feels like 105 with the humidity), and excessive heat warnings are telling people to avoid strenuous activity outside. Over 10,000 people have checked in to “Heatpocalypse” on FourSquare. On these blazing summer days you should be thinking about everything your utility is doing to prepare for the Heatpocalypse and also taking note of just how important it is for utilities to invest in smart-grid technology.
Your utility actually spends years getting ready for days like this. When scorching heat sends people indoors to ratchet up their air conditioners, the demand for power spikes and constrains the grid in many regions. The grid needs to operate in a constant balance of supply and demand, so when demand zooms way up, utilities have a few stop gap measures to meet that load.
One way utilities meet these peaks, is by using on-demand generators. For example, PJM, a regional transmission organization serving a population of 51 million, commonly starts generators to control regulation as often as hundreds of times per day. On Thursday the Midwest Independent Transmission System Operator (MISO), which is responsible for the bulk power in a dozen states in the Midwest, issued an emergency alert and said the raging temperatures had stretched the load on its generators far more than it had predicted, reported CNN.
Just the day before, on Wednesday, MISO said that power demand had risen to its highest point ever in history at 103,975 MW, above the last record in the summer of 2006. Thanks to the trends of global warming and extreme weather, as well as population growth, it seems like these new demand records are just going to keep coming, so the power grid will be even more taxed in the future.
The answer to the already stretched power grid isn’t just to add more power generation, even if its clean power. It’s to build out the infrastructure of the smart grid to the point where utilities have many more options for shedding those power loads, doing it efficiently, and doing it in real time. Some utilities already do so-called demand response, where they ask companies, and even residential customers, to turn down power consumption of devices and appliances turning peak times.
But the reality is that demand response is largely a manual process right now. It could be far more automated — if smart, network connected thermostats and appliances, and energy algorithms could cut power loads for you (and you also saved money on it) then it would be far more effective. Adding more energy storage technology onto the grid would also help store on-demand power that could be available when demand spikes, reducing the need for generators.
Adding IT to the smart grid, just at the distribution automation portion (not connected to the home) will be a $10 billion revenue market by 2014, according to Pike Research. Smart meter infrastructure is another huge market, and Pike Research reported that global smart meter shipments were 17.4 million units for the first quarter of this year. For companies and VCs, that’s pretty hot.