News release: “…Simply put, energy is the amount of electricity that’s consumed by every device, light or appliance that’s plugged in and turned on. Whereas capacity is the maximum output the power system can deliver to meet the demand for energy. On a moment-by-moment basis, utilities and system operators ensure there’s enough available capacity to serve homes, schools, hospitals, businesses and industries and still have some left in reserve. But during times of peak demand, like on hot summer days when air conditioners are blasting, and cold winter nights when heating is needed most, a lack of capacity can result in brownouts (a drop in voltage or power supply to reduce energy load) or blackouts. Historically, capacity needs have been met by building new power plants and transmission lines. But today, capacity markets and demand response are alternatives. In a capacity market, participants can bid for additional energy supply or demand reduction resources. With demand response, end users can provide relief to the system by reducing their consumption during periods of peak demand…A key benefit of EPRI’s Integrated Grid concept is that it provides a framework for utilities to map out the capital investments and operational changes needed to successfully integrate distributed energy resources and demand-side technologies.”

• See also this related article from the Urban Institute – Do we have the energy for low-income energy policy?