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Mark Biondetti
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I am a retired financial writer.
  • Arista Power's Power on Demand: The Most Realistic Way to Reduce Peak Demand 0 comments
    Jul 25, 2011 11:58 AM

    I came across an interesting column over the weekend that will give you an inkling of the tremendous potential market for  Arista Power's (OTCBB:ASPW) Power on Demand peak-demand shaving system.

    The column, titled "McKinsey Considers Next-Gen Smart Grid, Gets It Mostly Wrong,"  originally appeared on Forbes.com on April 18, 2011It was written by William Pentland, Senior Energy Systems Analyst at Pace University and Co-Founder and Managing Editor of Clean Tech LawBusiness.

    The gist of the column is that McKinsey & Co., a top-of-the-line management consulting firm, and many other energy analysts are missing the boat when they talk about "demand side management" of electric power. Pentland says that too many analysts argue and expect that consumers and managers of businesses will be willing and able to shift their demand for electricity during peak demand periods through load shifting and energy efficiency and conservation.

    Pentland argues that reducing peak demand at the consumer level by changing the way businesses operate is an uphill and probably losing battle. "There are many reasons why consumers tend to use power more heavily during specific hours of the day," wrote Pentland. "Most people depend on electricity to produce value. Computers, copy machines, scanners, faxes and countless other marvels of the modern workplace are engines of productivity. There are limits to how many we can turn off at any given time without having adverse impacts on productivity."

    How refreshingWilliam Pentland obviously understands the real world, in which managers of businesses fight every day to run an efficient, profitable enterpriseThey arrive in the morning and turn on lights and machinery, and that creates a spike in power demand from the gridAre we really going to them they can't turn on their machinery when they need to, or that they can't run all of their machines at one time, or that they have to stagger their employee shifts just to reduce peak electric demand?

    The real long-term solution to reducing peak demand, Pentland argues, is on-site power generation and storage -- and I agree with him.

    This is exactly what Arista Power's Power on Demand system provides and it's why I believe there will be such a huge market for this innovative new product. Utilizing wind, solar and also energy drawn from the grid during periods when energy costs are low together with custom-designed, on-site storage system, Power on Demand provides a commercial business with a power source to draw from when electricity demand reaches certain "peak" levelsIn doing so, Power on Demand reduces the sky-high demand charges imposed by electric utilities when power demand spikes, even for brief periods. Even if a commercial business requires that peak demand for only ten minutes in the course of a day, utilities will charge the customer for the capacity to deliver that peak amount of power for the entire monthIn some cases, demand charges can account for up to 70% of a commercial electric bill.

    What Arista Power is saying to large commercial users of electricity is this: you do not have to change the way you operate your business to reduce onerous demand chargesThis is a powerful argument and, as William Pentland's column indicates, it's also the most efficient, productive and realistic way to reduce peak electricity demand.

     You can read Mr. Pentland's column in its entirety hereblogs.forbes.com/williampentland/2011/04/18/mckinsey-considers-next-gen-smart-grid-gets-it-mostly-wrong/

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