From MIT's Technology Review: Lifeline for Renewable Power

In one of the more advanced pilot projects testing such a system, the Minneapolis-based utility Xcel Energy and several vendors are investing $100 million to install a smart-grid infrastructure in Boulder, CO. These days, a 115-person Xcel crew is out full time, installing two-way electric meters at 50,000 houses. Homeowners are getting software that lets them view and manage their energy consumption on the Web, and some of their appliances are being fitted with switches that will let the utility shut them off remotely during periods of high demand.

Smart-grid technologies could reduce overall electricity consumption by 6 percent and peak demand by as much as 27 percent. The peak-demand reductions alone would save between $175 billion and $332 billion over 20 years, according to the Brattle Group, a consultancy in Cambridge, MA. Not only would lower demand free up transmission capacity, but the capital investment that would otherwise be needed for new conventional power plants could be redirected to renewables. That's because smart-grid technologies would make small installations of wind turbines and photovoltaic panels much more practical. "They will enable much larger amounts of renewables to be integrated on the grid and lower the effective overall system-wide cost of those renewables," says the Brattle Group's Peter Fox-Penner.