Smart Homes and the Grid

You may have heard the narrative that bitcoin miners are a flexible load on the power grid; flexible because they can curtail their electricity usage when demand spikes on the grid, and load because they consume electricity. While you may think the opposite of flexible load is inflexible load, the opposite is actually inflexible generation.

Grid operators can control the majority of our electricity supply because of the flexibility of power plants. If more electricity is needed, an operator can simply notify a power plant, who would then burn the necessary coal or natural gas to spin the generator that produces electricity. Once demand comes back down, the power plant can turn off their generators to balance supply.

Unfortunately, renewable energy is intermittent, which also makes it inflexible. A grid operator can’t tell a wind farm to produce more electricity when they need it because the wind farm can’t control the wind, but they can tell a bitcoin miner to curtail their load. The more inflexible the generation, the more flexible the load must become.

It makes me wonder if we will see a similar effect with smart homes, smart meters, and distributed batteries. No one wants a grid operator having control over their lights or AC, but smart thermostats, heat pumps, EV charging stations, and batteries will give more flexibility and cost-savings to the retail customer, while (in theory) giving grid operators more control on the load side. Overall, the end result should be a smart grid.

Octopus Energy is already giving their customers a piece of this “smart grid” technology. They supply EV chargers that know when electricity rates will be the cheapest—which also tends to be when demand on the grid is at its lowest—so your car will only get charged during those hours. Similarly, the company sells electric heat pumps that can start heating a home when it’s most cost-effective, say, two hours before you come home from work. As your home becomes smarter, so should its use of energy. Multiply that by millions of homes around the country, and perhaps we will see a much more reliable and healthy grid.


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