Energy; or Electricity and How We Consume It

So I read this article a while back about how we need to vastly improve our network of energy distribution. Naturally, I object. I think it's a wonderful idea, but there is another solution that isn't even being talked about. Better yet, you can combine them both...

Here's my plan. Currently about 7% of the energy produced at a power plant is lost in the grid. Not too bad actually, but 7% is enough to satisfy 21 million people in the US. That's 7 times the population of Chicago proper...

The problem is this. With traditional sources of energy such as gas and coal plants you need to build the generation stations big enough to handle peak demand. Peak demand is something like the hottest day in summer when everyone is running their AC. Low points are 2 AM in the morning when no one is using electricity. Ideally you would have medium sized generators that ran all the time, but because of peak demand the power companies have to bring plants online occasionally to fill demand. They're called peak plants. In fact I've seen some of them. ComEd actually has jet engines it can turn on to spin turbines and meet peak demand. They're cool... but that can't be cheap. Electrical demand has to be matched exactly. There is no fudge margin. Excess gets wasted and if enough isn't produced then things start to fail.

In comes renewables. They aren't very reliable in terms of output. If the wind slows down around a wind turbine farm so does energy production... by a factor of the difference of the cubes, so quickly (an 8 knot wind produces half the power of an 11 knot wind). If a cloud passes over a solar array it produces less energy. Thus, the aforementioned article calls for a newer smarter grid to deal with these things. I agree, it's a good idea to start work on this. But is that the whole solution?

What if most homes (or at least newly constructed homes) had a bank of batteries tied to their own renewable energy generators plus a plug in hybrid car? The car is in this case is essentially just more battery storage potential. Basically, if most homes had a decent battery storage capacity they could store the excess energy from power plants during the night when none is being used. Plus, with the renewables they would offset the peak demand. Think about it. When is peak demand? Midday when it's hottest and the sun is the brightest. So peak is reduced by the usage of renewables, and trough point demand is raised because everyone is charging their cars and banks of batteries. The demand for electricity is now much more flat.

Power plants could becomes smaller, run more consistently, and be more efficient. Then again, no one wants to pay for anything up front. We seem to be more content with paying higher costs indefinately than paying more initially.