An observation of Griddy during the Texas disaster shows that we should be
very careful in designing a real time price mechanism that’s applied to consumers. In the worst case this can take the form of passing all the risk and cost onto consumers who cannot handle this. This is particularly pernicious for HVAC, because during outages this puts consumers in the un-enviable position of deciding between their savings and not freezing/boiling to death.
Some loads can be moved, such as ev charging, but others cannot. The issue is that a lot of consumer load is less shiftable than you suppose. House heating (presumably we’d electrify this, because global warming) cannot be deferred for too long, and most households go through a hot water tank a day. These loads can be deferred for short periods of time, but proposing that people go without hot water or temperature control for even moderate periods of time is a political non starter. From an infrastructure standpoint it’s also worth mentioning how many people die and how many buildings get ruined by even a few days without power during severe weather events, which is often exactly when prices would rise.
A holistic view of the situation shows that while there is some smart grid stuff we can do, we still need to provide a guaranteed minimum worth of power generation no matter what. Ideally this would come from grid level storage so that we can run everything off renewables, but we’re just not there yet. The reality is that until we get there, the choice is between nuclear power and some other form of fossil fuel, typically natural gas. I think on the whole we’d be well served to commission one last set of nuclear power plants to get us through this crisis, and plan on decommissioning them in 2050 or so once grid level storage makes them obsolete.