Dynamic Pricing, Smart Grid, Demand Response Key to Energy Future

Innovative smart grid and energy technology solutions can help achieve economic and environmental goals if customers have access to dynamic pricing. That message, and the role competitive markets play in these innovations, was front and center in remarks from national policy leaders at the recent National Town Meeting on Demand Response and Smart Grid. 
 
“Creating a smart grid is an essential part of the energy revolution,” said Congressman Ed Markey (D – MA) in a keynote address, before predicting that smart meter deployment will rise ten-fold over the next decade. “A global revolution in clean energy is needed, and competition between all for leadership in new energy will create jobs.”
 
Innovative new smart grid technologies are already springing up across the country, spurred on by competition. “Because we have organized markets, we are ahead in our ability to bring technology and demand response to consumers,” said Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission, during a roundtable on the future of smart grid policy. Wellinghoff cited PJM Interconnection’s 9,000 megawatts of dispatachable demand and Plug-in Hybrid Electric Vehicle pilot program, as well as Constellation NE’s VirtuWatt technology.

Even though innovations are occurring, regulatory certainty is needed to unlock innovation’s full potential. “A comprehensive energy policy is possible,” said Wellinghoff, “but we do need a price on carbon and comprehensive view on transmission and renewables.” This sentiment echoed COMPETE Co-Chair Federico Pena’s recent statement on the White House Clean Energy Summit.
 
A roundtable discussion illustrated that empowering consumers to make smart energy choices through access to energy data is key to smart grid implementation. “Information is at the center of energy efficiency, smart grid and demand response,” said Chris King, Chief Strategy Officer of eMeter. “It all comes together with the consumer.”
 
This engagement is best achieved by demonstrating the benefits of demand response to users. “We call consumer education ‘W.I.I.F.M.’- what’s in it for me,” said Steve Delp, Chief Operating Officer of Best Buy, during the consumer roundtable. “Utilities must engage consumers in a similar way to educate on the value of demand response.”
 
Ultimately, it all comes down to dynamic pricing, which unlocks economic benefits for consumers and helps energy suppliers provide innovative energy management solutions. “Dynamic pricing is moving into states much more slowly than demand response, but it unlocks tremendous value for consumers,” said Peter Fox-Penner, Chairman Emeritus of the Brattle Group, during the future of smart grid policy roundtable. “Static data limits services to provide, but better data can enable a ‘service menu” of innovative services.”
 
National energy demand is expected to rise in coming years as a result of economic growth and advancements in technologies like electric vehicles and consumer electronics. Fortunately, demand response and energy efficiency – technologies that thrive in competitive markets – reduce consumer energy demand and the need for new generation.