Some researchers currently think that if we can shift the times at which we use energy, the whole system will become more efficient. As it stands now, during the very hottest part of the very hottest day, everyone wants to run their air conditioners, putting an enormous amount of strain on our energy grid. To compensate for the increased demand, peaking power plants, kept on notice for these particular occasions, are put into action. Because these plants are used so infrequently, it often doesn't make economic sense to make them as efficient as possible. These are the dirtiest of the dirty plants.
What if we didn't need these plants? What if we could somehow "smooth out" our energy usage so that during the very hottest part of the very hottest day, our energy demand isn't all that different from a normal part of a normal day? What if ordinary appliances already in our homes could be used to regulate our energy usage? They could turn on and off throughout the day to store some of the excess energy and go without when there's a dearth.
This idea isn't new. It was first proposed in a paper written in 1980 by Fred Schweppe . Schweppe and his colleagues devised a concept that they called FAPER, or Frequency Adaptive Power Energy Rescheduler. (It's "frequency adaptive" because it uses the frequency of the transmitted power as an indication of strain on the energy grid.) In this early paper, they proposed that some appliances, like hot water heaters or refrigerators, can be turned on and off throughout the day in response to an excess or shortage of power on the grid. Currently, these appliances turn on and off to maintain a certain temperature range, with no regard to the energy supply. Since the end user doesn't really care when the hot water heater is on, so long as the water maintains some minimum temperature, the grid can talk to the hot water heater and coordinate the best times to heat the water.
For instance, a typical hot water heater maintains a temperature between 120 and 140 degrees Fahrenheit. The way they're made now, if the water inside is sitting right at the middle, at 130 degrees, it won't turn on until the temperature drops. If, however, new heaters incorporate FAPER technology, and there's an excess of energy on the grid, the heater would turn on anyway, effectively storing the excess energy. Later on, during peak energy usage, the water heater wouldn't need as much energy. When everyone wanted to run their air conditioners, we wouldn't also need to power the water heater.
When the price of oil dropped in the mid-80s, the need for this sort of application
dropped with it. FAPERs were shelved and research money was funneled to other fields. With the price of oil increasing over the past 10 years, the concept of the FAPER has been revived as part of the "smart grid" that President Obama, among others, is such a large champion of. This type of communication between the consumer and the power plant is only the start of a smart grid. With increased coordination between the power user and the power supplier, the need for spinning reserve decreases. Power plants can be eliminated because during the hottest part of the hottest day, we can focus on powering the air conditioners – and ignore the water heaters for a bit. It's not sexy – just engineering.
 F.C. Schweppe, et al. "Homeostatic Utility Control." IEEE Transactions on Power Apparatus and Systems. vol. PAS-99, iss. 3, pp. 1151 - 1163, (1980).