SACRAMENTO (Reuters) - The long-awaited "smart grid" for U.S. power could play a major role in rolling out renewable energy like wind and solar, the top U.S. power regulator said on Wednesday.

Demand response, the heart of the "smart grid" concept of a power system that can respond immediately to changes in supply and electricity prices, could account for a fifth of U.S. electricity, Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, said in an interview.

The market treats contracts to cut demand as a power source, jocularly called a 'negawatt'.

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