The idea is simple: supply people with smart meters that give real-time information on electricity use and price. Armed with the new information, consumers might opt to plug in their laptop in the middle of the night instead of, say, the middle of the day. As a bonus, the system would lead to more use of renewable energy sources like the wind and sun.
But there’s a hitch. If everybody aims to use cheap electricity, the slow time in the middle of the night becomes the high demand time. In the worst case, everybody’s laptops start recharging, refrigerator compressors kick on, dishwashers start up and so on, at the exact same moment. At least so say M.I.T. researchers in a paper presented at a recent meeting of the Institute of Electrical and Electronics Engineers.
Instead of charging on the cheap, you get a huge spike in demand and, potentially, a blackout. That’s because electricity must be produced at the same second it is consumed and utilities must precisely match supply and demand.
One solution would be to give consumers imperfect or non-instantaneous price information, though that kind of defeats the original purpose. But it does keep the smart grid from outsmarting itself.
Two problems: not everyone will plug in their devices midnight when the price is lowest, and the system can give a piece of loading info or even change the price to let people know demand is too high to make a price hike necessary even in the middle of night. This story would be a perfect field case for elasticity.