Electrical Energy Regulation and “Smart Grids”

Although electrical energy supply stems from a vastly complex process, the need for a greater understanding has led to its simplification. The process has been broken down into a series of market designs.  Even though an infinite number of market designs exist, the electrical energy supply process has been narrowed into three fundamental parts: load, distribution, and generation/demand.

Smart grids play an important role by balancing supply and distribution through controlling the load requirements. The goal of the smart grid is to serve as a balancing mechanism for load and generation with a smaller generating capacity. This method has served the U.S. for well over a century and is expected to continue to play an integral role in the energy supply to consumers.

The current big debate regarding smart grids revolves around price signals; what is the correct price signal? Moreover, who should receive them? The truth of the matter is that while smart grids will greatly help stabilize the electrical energy grid, they could also increase the end cost for consumers. These are points that absolutely need to be debated and a logical resolution must be defined prior to the creation of any market design.

One possible option to help decrease cost to the consumer is a real-time smart meter. Smart meters eliminate the need for a person to go house to house reading meters, which in itself turns a valuable profit. This saves time, fuel, and vehicles, with the major driver being capacity – but what does that mean?

Capacity and energy are not synonymous. Electrical energy exists in the moment, with its value being determined by fuel, variable operations, and maintenance cost. Capacity, on the other hand, is determined by the hardware of generation; it is the ability to turn another energy source into electrical energy and move it to the end user.

Consumers, as well as energy companies, are quickly coming to the realization that the electrical grid is a complex system containing complex interactions. Implementing simpler and more stable methods such as smart grids will prove beneficial to all parties involved. If you are interesting in learning more about smart grids and how you can get involved with the booming energy industry, contact FootBridge Staffing today!