Dynamic power pricing and demand response

Marianne Hedin over at Pike Research writes today about the potential for dynamic pricing to combine with automated demand response in a one two punch. She points to a successful pilot at Oklahome Gas & Electric that has led to a three year program targeted at 150,000 customers in which participating customers get an Energate smart thermostat that can respond to price signals according to customers’ settings.

Smart appliances with two way communication are really the key piece of combining demand response with dynamic pricing because a HVAC unit could be programmed to adjust its temperature settings based upon pricing. And it puts both the utility and the customer in the driver’s seat. The utility can shift prices north to alter consumer behavior and the consumer has the option to choose how it wants to respond and if it wants to participate in the demand response program, given the pricing signal.

Ultimately, Hedin points out that dynamic pricing could help utilities justify their investments in the smart grid, which some have complained are only producing a tsunami of metering data without a clear path to energy efficiency or a more stable grid.