Smart Energy Distribution and Consumption: Information Technology as an Enabling Force

J. Rabaey, E. Arens, C. Federspiel, A. Gadgil , D. Messerschmitt, W. Nazaroff, K. Pister, S. Oren,  P. Varaiya, Center for Information Technology Research in the Interest of Society (CITRIS).

The deregulation of the electrical-energy distribution in California, combined with the increasing cost of natural gas, has brought energy back to the front-page news. In this white paper, we establish how the effective use of large-scale integrated information-technology systems, combining a wide range of networked devices ranging from tiny sensor and actuators to distributed databases and compute servers, dramatically improves the efficiency of the energy-generation, distribution, and consumption infrastructure, and streamline the interaction between these three components. These Societal-scale Information Systems are bound to have a revolutionary and quantifiable impact on the economics and logistics of the energy-provision chain. As described below, as little as a 1 percent load reduction due to demand response can lead to a 10 percent reduction in wholesale prices, while a 5 percent load response can cut the wholesale price in half. This effect is central to the implementation ofshort-term, low-cost demand reduction techniques. A proof-of-concept demonstration is proposed to illustrate the impact of the proposed techniques.