A report issued by the White House on future investments in the nation’s smart grid highlighted several analyses authored by economists at The Brattle Group on smart grid technologies and dynamic pricing.
The report, “A Policy Framework for the 21st Century Grid: Enabling Our Secure Energy Future,” outlines specific recommendations to strengthen the Energy Independence and Security Act of 2007 and the Obama Administration’s investments into the smart grid, which will support long-term investment, job growth, and innovation. The report, prepared by the Subcommittee on Smart Grid of the National Science and Technology Council, Committee on Technology, provides a framework to improve and modernize the current grid to better position the country as a leader in the 21st century economy and a front-runner in the clean energy revolution. The framework outlined is supported by four key aspects: (1) enable cost-effective smart grid investments, (2) unlock the potential of innovation in the electric sector, (3) empower consumers and enable informed decision making, and (4) secure the grid from cyber-security threats. A 2008 study on demand response, authored by Brattle principals Marc Chupka, Peter-Fox Penner, and senior associate Ryan Hledik, is featured in the report to support the need for innovation in demand response programs and rate design. The Brattle study found that investing in technologies that better manage energy use during the highest demand periods and increase energy efficiency could alleviate the need to build 90 gigawatts or more of power plants by 2030. In addition, a 2009 analysis by Brattle principals Sam Newell and Ahmad Faruqui on dynamic pricing benefits in New York state was highlighted in the report to bolster the idea that demand response can better manage peak load times. The Brattle study found that the cost to serve peak load times in the state is more than the average cost over the year, due to maintaining capacity that is seldom needed. Other studies and analyses on the benefits of smart grid authored by Brattle economists Johannes Pfeifenberger, Sanem Sergici, Dr. Faruqui, Dr. Newell, and Mr. Hledik are also referenced throughout the report. To view the White House report in its entirety, please visit their website. To view the Brattle reports cited, please follow the links below.