When electricity demand is set to surge—say, from a new power-hungry data center—the default response from a utility is often to build a new (and expensive) power plant and other infrastructure.
A new report released by a cross-industry coalition called Utilize argues that we can make better use of existing power on the grid instead. Roughly half of the total capacity goes unused most of the time because the grid was built to meet spikes in demand. But as technology has shifted, it’s become easier to unlock that extra power.
Smart thermostats, for example, can pre-cool your house when demand is lower. EVs can charge at optimal hours (and, in some cases, send power back to the grid when it’s needed.) Networks of home batteries, being rolled out by startups like Base Power, can also store power when demand is low and then provide it later. Data centers and other large power users can use load flexibility, moving their power use to certain times of the day. Sensors, software, and other new tech can help transmission lines carry more power.
A mix of these solutions added together, along with others, can free up more power for new uses, from data centers and factories to millions of drivers charging new EVs. If new electric demand can be added without a major new investment in infrastructure—and more customers are actually sharing the same fixed costs—the cost of electricity can go down for everyone. The same solutions can also make the grid more resilient in extreme weather.
“We’ve heard a lot about affordability of electricity in the last year,” said Utilize executive director Ian Magruder at a press conference yesterday. (The group includes members like Google, Carrier, and Tesla.) “We think that there are a lot of solutions being proposed, but our view is that this solution of grid utilization is one of the only near-term solutions that can meaningfully reduce the cost of electricity at scale in short order.”
The report modeled what could happen at a typical midsized utility, and then calculated what the approach could mean nationally. By increasing grid utilization by 10% as electricity demand increases, the report says that consumers could save between $110 billion and $170 billion on electric bills over the next decade. That’s on top of savings that people could get from participating in specific utility programs that pay consumers to use appliances or charge EVs at certain times.
Virtual power plant programs already exist throughout the country, and there are a variety of ways that they can scale up. Base Power, for example, owns the batteries that it deploys at homes (consumers save on electric bills and have backup power if the grid goes down, while Base Power makes money by selling the power it stores back to utilities). Utilities lead other programs. Hyperscalers could also help.
