Jon Wellinghoff,
Chairman, FERC
October 9, 2009 - The smart grid will play a major role in rolling out renewable energy like wind and solar, the top U.S. power regulator said on Wednesday.

Demand response, the heart of the "smart grid" concept of a power system that can respond immediately to changes in supply and electricity prices, could account for a fifth of U.S. electricity, Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, said in an interview.

The market treats contracts to cut demand as a power source, jocularly called a 'negawatt'.

Cutting demand by a few minutes or seconds also could let the U.S. grid cheaply incorporate renewable sources like wind and solar that otherwise would need backup from plants that stayed idle most of the time.

"I don't think we need shadow generation," Wellinghoff said, using the industry term for the backup power stations, which substantially raise the cost of a power supply based on alternative energy.

Alternative energy is currently such a small part of U.S. generation that a cloudy afternoon is almost irrelevant, but California aims to get a third of its electricity from renewables by 2020, and Hawaii aims for 40 percent by 2030, levels at which the intermittency could be a major issue.

Intelligent power meters linked to the grid and appliances could shift power in two ways: evening demand over the course of the day by doing tasks at new times, such as running the dishwasher in middle of the night, and responding to sudden changes in supply, such as a computer turning up the thermostats in a neighborhood's refrigerators for a few minutes while clouds pass over a solar power plant.

Vast swaths of the country, including the southeast and much of the southwest, don't yet have a market necessary for such a system, but some 75 percent of the country's electricity load could do it, making the goal of 20 percent possible. "I think there is potential to get there by 2020," he said.