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Electricity is priced wrong. (discuss.tchncs.de)

submitted 1 year ago by [email protected] to c/[email protected]

44 comments fedilink hide all child comments

cross-posted from: https://discuss.tchncs.de/post/127188

Have you ever heard of “net metering”?

It means that if your electric company gives you net metering, you can connect a generator or solar panels to your house and sell excess electricity back to the utility at the same price that they bill you for.

Sounds great right?

No, actually its a major problem for the utility.

The reason is that power plants take a significant amount of time to throttle up or down. If everyone in the area has solar power feeding back into the power grid, sudden changes in sunlight can cause major fluctuations and destabilize the power grid.

So what is the solution?

Dynamic pricing. Some areas already do this. How it works is that the price you pay (or receive) for electricity depends on the conditions on the power grid at the moment, updating as fast as possible.

When the grid has a deficit of power at the moment (maybe a power plant is struggling to throttle up to meet demand) the price goes way up.

If the grid has a surplus power at the moment, the price goes down, even going negative.(meaning you must pay to dump your power into the grid, or be paid for consuming excess power)

What this does is create an economic incentive for people to invest in equipment that actually stabilizes and supports the power grid.

For example if you have an electric car charging in your garage, it knows the price of power, and it can start charging faster when the price drops, or it can dump its battery power back into the grid when the price is high. The battery in your car is actually earning money as it sits idle!

Same with solar panels. Even if the installation doesn’t have batteries, the system can choose to stop selling power to the grid when it isn’t wanted.

Likewise, your heated pool can choose to absorb electricity when the price is low.

This is the future of the renewable energy economy in my opinion.

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[–] [email protected] 11 points 1 year ago (4 children)

Dyamic pricing is risky: it's all sunshine and rainbows until suddenly something happens and it's $9,000/kwh.

The hardest part you'd have is convincing anyone to take the downside risks for... what, exactly?

There's no upside for the consumer here unless 'investing in more stuff for your solar panels' is in some way a useful thing.

Dumping electricity into a hole in the ground (your pool) is pretty much the LEAST green thing you can do with it.

This sounds like the consumer should spend their own money to fix the grid's inability to cope with changes and the oncoming future, rather than put the impetus on the billionaires that already own the infrastructure but aren't willing to update it.

[–] [email protected] 3 points 1 year ago* (last edited 1 year ago) (1 children)

If the price hits $9000, somethings very wrong and theres a blackout coming. In which case, having everyones electric car suddenly respond and start SELLING $9000 electricity might just stabilize the power grid and bring the price back down ASAP. Thats the point.

[–] [email protected] 2 points 1 year ago

Correct. The whole point is having simple mechanisms at home to turn on and off energy uses depending on pricing and need. Even discharge your batteries into the grid if needed.

[–] [email protected] 2 points 1 year ago

The pricing should definitely have limits. I could see the rates being something like $0.05 at the lowest and and $0.50 at the highest. It would still be worth it to min/max your electricity bill but if you absolutely needed to use something at peak, you're not going to go broke over it.

[–] [email protected] 2 points 1 year ago

For those of you who thought the $9000/kwh was a random number. This actually happened for a short time in Texas after a winter storm took down most of the grid in 2021.

I'm all for dynamic pricing and other financial incentives to encourage more efficient use of power but there definitely needs to be some sort of insurance against black swan events taking peoples life savings while they try not to freeze .

[–] [email protected] 1 points 1 year ago (2 children)

The upside for the consumer, if you don’t care about reducing fossil fuel use, is that any home with a battery system will have built in uninterruptible power for the fridge, lights, grandma’s breathing machine, etc, in the event of a blackout.

Dumping energy into the pool has nothing to do with whats green, its an emergency measure in the event that the power grid has a sudden excess of energy must be dumped before power plants get damaged, which does happen.

[–] [email protected] 3 points 1 year ago (1 children)

That's an incentive for having batteries, what's the incentive for dynamic pricing?

[–] [email protected] 1 points 1 year ago* (last edited 1 year ago)

Dynamic pricing is the mechanism that controls the distributed network. Instead of giving the utility some direct control over your equipment, your stuff monitors the price and adjusts its behaviors accordingly.

Which you have control over, if you want it to behave differently than the default settings.

[–] [email protected] 1 points 1 year ago

My focus in the first post, though admittedly being unclear, was that this proposal is expensive.

I spent $20,000 on solar panels and all the related equipment required to make it grid-tied. I did not buy the batteries, because to provide sufficient backup power for the house I would need two of the $10,000 batteries enphase sells along with additional hardware and install costs - would have moved the $20,000 solar install to ~$45,000.

The math wasn't really in favor of more than doubling my cost, even though I'm not somewhere that does net metering: as you suggest, I'm actually paid demand pricing for any excess generation, same as any commercial plant would be.

The idea isn't bad, it's just that the expectation that the consumer of power/home owner should invest this heavily into stabilizing the grid doesn't make sense unless either the grid owners or the government are actively spending the money but even then this still feels like a solution that should be made upstream of my house since power storage at scale is going to be cheaper than expecting everyone to purchase high-capacity lithium batteries.

[–] Kaiser 7 points 1 year ago (1 children)

I like the idea until you start talking about paying to dump power back onto the network in times of low demand.

[–] [email protected] 4 points 1 year ago (1 children)

Why do you say that? It’s proven in areas with dynamic pricing, at least at large scale.

https://www.pv-magazine.com/2022/07/27/tesla-big-battery-begins-providing-inertia-grid-services-at-scale-in-world-first-in-australia/

Tesla isn’t the only one doing this.

[–] Kaiser 2 points 1 year ago (1 children)

I worry about the potential costs as home based renewable energy becomes more popular that any savings could be wiped away for adding energy to the network, but I guess it all depends how much much the fee would be. I’d be okay with it if the power company invested in something g like this to try and minimize the time where consumers would be paying to produce electricity https://en.m.wikipedia.org/wiki/Gravity_battery .

[–] [email protected] 4 points 1 year ago (1 children)

Your home equipment will be aware of the current price and automatically adjust its behavior for maximum profit, which also happens to be maximum grid stability.

[–] [email protected] 0 points 1 year ago (1 children)

If that forces all my appliances to be 'smart' then that's a no for me.

[–] [email protected] 0 points 1 year ago

You can choose not to participate. If a fixed price contract is available then great, you can go on business as usual. If not, you’ll probably change your mind the first time it costs $50 to dry 1 load of laundry during a heat wave…

[–] Dick_Justice 6 points 1 year ago (5 children)

"When the grid has a deficit of power at the moment (maybe a power plant is struggling to throttle up to meet demand) the price goes way up."

The whole concept is definitely intriguing, but I worry that this would disproportionately create negative conditions for the poor. Rich people would hardly notice... I'm talking about people who have money falling out their pockets and suck up electricity all day and all night powering their high-end lifestyles versus people who live paycheck to paycheck. I hate to think of even MORE people having to decide between buying groceries and gas versus paying the electric bill. It could conceivably damage entire communities, unless I'm missing something (which is entirely possible, lol, I'm not very smart).

[–] [email protected] 4 points 1 year ago (1 children)

The energy company I’m with in the UK offers this type of dynamic pricing. I’m not on that tariff, but the setup is a great idea.

The pitch is that they give you notice , sometimes half hour sometimes more, of price shifts. Then you can chose to maybe do you laundry later or sooner depending what’s going to be better. One of their use cases is even to have a rig where an electric car battery can supply energy to the house. You charge your car when power is cheap / free, run your home from the car’s battery when it gets high.

They even have an API that some people use to automate tasks to take advantage of the price shifts.

Done well it’s excellent, but definitely needs an ethical mindset behind it. Fortunately in the UK, Octopus Energy is nothing if not ethical, but they are very much notable by this difference!

[–] [email protected] 0 points 1 year ago (1 children)

Thats great, but the pricing needs to be faster. 1 second updates or faster

[–] [email protected] 1 points 1 year ago (1 children)

I disagree. You need dynamic pricing but it needs to be manageable. Let’s say you start a cycle on the washing machine then a few minutes in the price suddenly jumps to an extreme high - that’s not manageable.

Giving users some warning throughout the day of price shifts actually meets the point of dynamic pricing better, too. The point is to get more power used when there is excess and less when supply is struggling. That doesn’t happen if people don’t get the chance to plan, even if that planning is only 30 minutes notice.

[–] [email protected] 1 points 1 year ago* (last edited 1 year ago)

Every appliance will be controlled by the grid pricing. This isnt even a technical challenge, you can already walk into home depot and buy an internet connected “smart” dryer that will reorder fabric softener from amazon when you run out. A bit of reprogramming, and it can intelligently moderate its energy usage accordingly with the grid pricing. Price spike? Turn off the heating element and wait a few seconds until conditions improve.

This is the action that stabilizes (and lowers) the grid price. Every single thing thats consuming or generating electricity can respond in real time to keep the power grip functioning perfectly.

[–] [email protected] 2 points 1 year ago

Better pricing will make electricity cheaper for everyone.

[–] [email protected] 2 points 1 year ago* (last edited 1 year ago)

Growing pains. The more efficient the power grid becomes, the less energy will cost for everyone. For now lets say that customers who want to install equipment that earns profit must agree to subsidize low income customers. As time goes on and the distributed systems mature, the price of bulk energy becomes so low that it doesn’t matter anymore.

[–] [email protected] 1 points 1 year ago

Many technologies and other societal changes can create disproportionately negative conditions for the poor. For example not having a phone, not having a car, not having Internet access. Please do not blame the technology. Blame inequality instead.

[–] [email protected] 1 points 1 year ago

I think a better solution is to add this as an option for the power providers we have now. Allow those who want to min/max their energy bills (and have the equipment for it) do so as an opt-in. Poor people who cannot afford the new equipment can still opt-in and only use electricity for times when it is cheap. People who don't care and don't have automation doing the work for them can live life just like they would have, with set rates for their electricity.

[–] bazsy 2 points 1 year ago (2 children)

I understand the need for better balancing the power generation and usage and it will be even worse as the unpredictable renewable sources keep increasing.

Dynamic pricing is just one solution and I would support it when home batteries become more affordable and sustainable. Grid scale energy storage has more benefits than each home having individual batteries while the production scales up.

Another approach would be dynamic load adjustments. The concept of "packetized" energy in general is very appealing but it would need standardization and utility support.

[–] [email protected] 1 points 1 year ago

unpredictable renewable sources

Weather forecasts are a thing.

[–] [email protected] 0 points 1 year ago* (last edited 1 year ago)

dynamic pricing will accelerate the development of both large and small scale energy storage systems. Its a capitalist/free market solution that incentivizes everyone (everyone from states to power plant operators to local governments to individuals) to contribute to improving renewable energy infrastructure.

[–] SpyDallyCandour 2 points 1 year ago (1 children)

Octopus energy in the UK https://octopus.energy/octopus-smart-tariffs/ has a variety of different "smart" tariffs on offer from raw market price (Agile) to EV specific tariffs. I've been with them for years as they're one of the few energy companies here that seem to have a clue and have been consistently cheaper than most of the competition. We do seem to have a much better energy market in the UK compared to the US, but the system is still pretty bad. (see the whole debacle about energy prices during the winter)

I was in an odd situation last year of being on a cheap fixed import rate, but a market rate for export, and I was at one point being paid £1/kwh to export our solar and paying 26p for import. You can even be paid to use energy occasionally with the market rate tariff when the cost of energy flips negative.

We've got a Powerwall too and can charge the battery at night and return it to the grid during peak hours. I don't do that at the moment as the rates aren't worth it for the tariff we're on (Flux). Instead while it's sunny we can just remain off grid and export our excess using the battery to cover the evening.

I'd love for a way to drive the powerwall charge/discharge behaviour with an API, it would let me make the powerwall charge up when energy prices were lowest in any given 24h window and discharge our surplus when grid prices were at their highest. Tesla had a plan to do this (managed by octopus) but they shut it down earlier in the year, probably due to crazy winter we just had... I'd still prefer some control over it though as I have a better idea of what our usage could be if I want to intervene.

[–] [email protected] 2 points 1 year ago

Its cool that you have those options

[–] kiwifoxtrot 1 points 1 year ago (3 children)

It should be on the utility to handle the swings in load and generation. If it takes some time for your plant to start up, why isn't there some sort of short term storage? Dynamic pricing causes solar to have a very low return and will cause us to continue to rely on fossil fuels longer. Utilities handle swings in load normally. A great example is there's a massive peak of electric use in England during commerical breaks on the BBC. Everyone has gotten up to put the kettle on...

[–] [email protected] 1 points 1 year ago* (last edited 1 year ago)

I believe the short term storage should be distributed. For one thing, moving electricity long distances over power lines is wasteful. If much of the energy is being generated, stored, and consumed locally, the power lines are carrying (and wasting) less energy.

[–] [email protected] 1 points 1 year ago (1 children)

And responding to those swings is a major challenge and expense for the utility

[–] [email protected] 1 points 1 year ago

But isn't it far more efficient to solve this centrally instead of having hundreds of thousands of households solve this over and over? The complexity of such a system alone would be enormous. Just imagine how many different setups will be handled and mis-handled by amateurs, and the grid still has to deal with all that shit.

[–] [email protected] 1 points 1 year ago

There are no commercial breaks on the BBC, and it is (or at least used to be) a phenomenon in the whole country, not just England.

[–] [email protected] 0 points 1 year ago

Its cool that you have those options

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