Mass response to price signals via Smart Meters can cause mass blackouts

From PV Magazine
Smart meters can jeopardize grid reliability
By:  Mirco Sieg/Shamsiah Ali-Oettinger
July 27, 2015

Electricity consumers who respond to fluctuating price signals by means of smart meters can in turn cause mass blackouts. The researchers at the University of Bremen warn of the possibility of a “collective avalanche mechanism“.

Since the beginning of 2010, newly built or completely renovated buildings in Germany have to be fixed with smart meters. This is to allow electricity consumers to “switch on or off” in accordance with current generation capacity and electricity prices. The idea is to help households and business entities save energy costs. The University of Bremen, however, seems to have found a glitch in this idea.

The researchers at the Institute for Theoretical Physics at the University of Bremen have simulated what can potentially happen when smart meters on a massive scale react collectively to electricity price signals. The result: the smart meters end up providing a new artificial electricity market, which can cause the electricity supply to crash. This in turn endangers the security of supply.

The good old example of washing machines was put forth as an example by the researchers. When households program their washing machines to turn on when the smart meter shows a cheaper electricity price, then this so-called “collective avalanche mechanism” can occur. This can cause an extreme burden on the grid. Blackouts as a result of the unexpected overload have not been ruled out.

Utilities should be warned

Prof. Dr. Stefan Bornholdt of the university asserted that the standard theory of demand and supply becomes nullified when a massive number of consumers respond to a cheaper price. “Of course everyone wants to do their laundry when the price is at its lowest,” he added.

From the point of view of the researchers, the mass implementation of smart meters is a “quick solution that has not been thought out thoroughly until the end”. Utilities need to be warned of this. “In the university’s computer simulations, different variables were fed in according to how real people would logically react in given situations,” Bornholdt added. The individual consumer does not know how his behavior, when exponentiated, in given situations can affect the electricity supply. “Unfortunately, the utilities do not know this yet either,” the professor added.

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