It turns out that the conventional way of distributing electricity is all wrong. I am talking about electricity distribution of the kind government does from the power plant to the consumers.

One of the main issues is that all the resources, the cables, the transformers, the hubs and so on, are built in order to support the peak load. But the peak load is rarely reached. In 2009, for example, 15% of the generation capacity was used less than 88 hours per year in Massachusetts. 88 hours per year! Out of the 8760 hours that a year has. Obviously, we are doing a lot of work that’s not needed.

However, we can’t really just cut down on the resources because if we do, those 88 hours of peak load will just blow everything up and we don’t want that to happen either.

Thus people have come up with an ingenious idea: control the electricity provided to the consumers such that they do not all get a large amount at the same time, thud reducing the peak load. This is done by a central hub that studies the usage pattern of different houses in the locality and schedules electricity to them accordingly. The hub can also ask the home owners to provide additional data. For example, people are usually flexible about exactly when they want to use power-consuming electric devices. So for example, the hub could ask the home owners to send a list of devices they want to use on a given day and the flexibility they are willing to accept. Next, the hub can decide the amount of electricity to provide to each house at a given time, the aim being to make sure that not many of the houses run heavy load devices at the same time.

Many other things can be done. Anything that can potentially bring down the peak load by 1-2% will save the governments a lot of money.