I always thought that it would be a better alternative to peak-demand power plants to have a variable-demand industry connected to the base-load power plant.
Rather than firing up the peak-demand plants when load rises, just keep the plant humming along at the same rate and throttle back the cement producer, or biomass gasifier, or fertilizer plant, or aluminum smelter, or paper mill, or desalinator, until the grid load comes back down. Any industry that can singlehandedly soak up all the excess power on additional production would do.
Yes, we'd just need some kind of signal that was proportional to demand. If the demand was high, the signal would also be high, so that consumers would know it was time to cut back on consumption. And likewise, for producers, a high signal would indicate that it was time to bring on extra capacity. Of course, we'd want the signal to be something meaningful that people wouldn't ignore. It would be best if the whole signaling infrastructure was decentralized, so that producers and consumers could act according to their own needs without coordinating through a central authority. It seems like there may be a startup opportunity in there somewhere.
You just described how Nest is using their data and how utilities are trying to use Time Of Data metering to signal pricing to consumers (using smart meters).
Also, most if not all industrial electricity users have load shedding agreements with utilities; in the event of demand spikes, those industrial users are required to curb their power use within X number of minutes.
They already do that. There just isn't any industry that can singlehandedly soak up all the excess power (subject to constraints of proximity to power plants, distance from cities, etc). There's a chance electric cars will change this.
Paper mills are pretty good at providing large amounts of instantaneous interruptible load. I'm sure there are others, but you're probably right, soaking up ALL the excess baseload in a baseload only grid i would be a challenge.
Energy storage, using electric car batteries as grid smoothing utilities is an interesting approach. Grid sized flow batteries[1] are another interesting option.
Rather than firing up the peak-demand plants when load rises, just keep the plant humming along at the same rate and throttle back the cement producer, or biomass gasifier, or fertilizer plant, or aluminum smelter, or paper mill, or desalinator, until the grid load comes back down. Any industry that can singlehandedly soak up all the excess power on additional production would do.