EXCERPT FROM INTRO, COMPLETE PAPER ATTACHED.

The world has a huge appetite for electric energy, consuming thousands of billions of kilowatt-hours (kWh) annually, a figure that continues to climb as more countries become industrialized. The world’s electric consumption has increased by about 3.1 percent annually between 1980 and 20061), and is expected to grow to 33,300 billion kWh by 2030). The world’s electricity consumption for 2008 was 16,790 billion kWh so by 2030 the world demand for electricity is expected to have almost doubled. Currently a significant amount (about 10 percent) of electric energy produced by power plants is lost during transmission and distribution to consumers. About 40 percent of this total loss occurs on the distribution network. In 2006 alone, the total energy losses and distribution losses were about 1,638 billion and 655 billion kWh, respectively. *A modest 10 percent reduction in distribution losses would, therefore, save about 65 billion kWh of electricity. That’s more electricity than Switzerland’s 7.5 million people consumed in 2008 and equates to 39 million metric tons of CO2 emissions from coal-fired power generation .*

As the demand for electricity grows, new power plants will have to be built to meet the highest peak demand with additional capacity to cover unforeseen events. The peak demand in a system usually lasts less than 5 percent of the time (i.e, just a few hundred hours a year). This means that some power plants are only needed during the peak load hours and their potential is utilized relatively infrequently. By active demand management on the distribution system, through demand response and VVO, the peak demand on the whole electric grid can be reduced. This eliminates the need for expensive capital expenditure on the distribution, transmission, and the generation systems. Even very modest reductions in peak demand would yield huge economic savings. For the United States in 2008, for example, the non-coincidental peak demand (i.e, the separate peak demands made on the electrical system recorded at different times of the day) was about 790 GW. *With every 1 percent reduction in the peak demand there would be a reduced need to build a 7,900 MW power plant.*