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Yesterday I got a card from my utility saying that I could buy power from renewable sources for an extra $0.013/kWh - a good enough cause, and I'll probably do it. However, of more interest was that they had statistics on the average electricity use per household, something like 750 kWh/ month for my area. My usage is about 300 kWh/ month - pat on the back to me for using compact fluorescents, etc.
However, I would claim that my conservation efforts are not being adequately rewarded, and wouldn't be even were I operating under some sort of "net metering" system. My thinking is as follows: Suppose during a summer spike in electricity usage, 50% of the households reduce their power consumption by 50%, i.e., a reduction of 25% for the whole network. This reduction would in all likelihood remove the strain from the grid, reducing the need to run peaker generators and/or by power from the grid. Thus, the conserving households have done a tremendous service, not only to themselves (saved money by conserving plus kept the utility from having to buy expensive power), but for the non-conservers as well (power prices kept lower). This is sort of a "tragedy of the commons" but in reverse - a group of individuals does an act that saves the commons a good chunk of change. However, even under a net metering scenario, the consevers would not be rewarded. Sure their power prices are a bit lower, but so are those for the non-conservers.
How can this be changed to reward the conservers? By what I would call "Extrapolated Power Pricing." This doesn't require fancy new meters or anything. It simply asks the question "what would electricity cost if EVERY household used as much electricity as you did last month?" My guess is that this would be a pretty strong function of an individual's usage, increasing very rapidly as consumption goes above the average household's usage. Households would then be charged based upon this extrapolated usage, with extra charges for households above average forming a pool that would be rebated to the conservers proportional to how much below average their usage was. At least initially, conservers would actually make money on this scheme, which they should, since they are doing a service to everyone.
The problem with the current system, and even net metering, is that conservation still remains mainly a virtue with a very small monetary reward. As such, it will never catch on with even the majority of the public - they simply don't care enough to try to reduce their monthly bills by a few bucks. Incremental electricity usage has a very real cost, and those who actively seek to reduce their usage should be given real rewards to recognize the service they provide to all customers.
This could of course be done with net metering - start the day with a monetary credit the equivalent of 10 kWh based upon projected demand for that day, which is then eaten up more or less quickly according to the actual overall demand. However, I don't really think there is that much of a need to get that fancy - smarter billing that truly rewards conservation might well do as much good.
I like the $200 rebate, and it has not caused us any discomfort. Sorry, I don't have the actual tier rates at hand, but it rises pretty steeply. At 130%, we pay 26 cents /kwh for our marginal use, compared to about 19cents average, and baseline is less than that.
First of all, consumers would have a real incentive to replace that 20 year old AC with a new model or a ceiling fan. The utility and state would have plenty of money to invest in renewables. Renewables companies would get plenty of money for research, to hire people etc..
Take that on the background that CA is generating 3GW of renwable capacity with a 1 cent rate hike.
The scheme you mention minimizes peak-load pain. It does not solve the underlying problem. In medicine people are trying very hard to get away from treating the symptoms and towards treating the condition. Why can't we do the same in the energy arena?
In additional you would reward perverse behaviour: buying a Honda generator and powering out of that, which would be worse for global warming, peak oil etc.
Active demand management is actually key because one of the major obstacles with renewable energy is its intermittency: the wind doesn't blow all the time, the sun sets, etc.
The electricity system is hugely inefficient because California has a peak demand at 5pm on weekday, which is about 2.5 times its demand at 4am (it might even be 3 times).
Ontario is no different (and, strangely, Ontario's peak is abou 35GW, and California's about 55GW?-- I've found no good explanation, as yet, how a province of 11 million people can consume 60% as much power as a state with over 30 million people and a GDP/head 50% higher (at least)).
Ontario now faces summer peaks (used to be January peak, but there is more air conditioning around, and summers are hotter than they used to be-- a combination of warmer weather and the Toronto heat sink effect).
In the good old days, we sold power in summer to New York City (when it was expensive) and bought it back from Niagara Mohawk in winter (when it was cheap). Now our terms of trade have almost reversed.
So active demand management can save a lot of money, and a lot of resources. And since Ontario's baseload is nuclear, but its peak load is coal (Nanticoke was the largest coal-fired station in N. America, over 3000MW), you can save a lot of carbon that way, too.
I have yet to see a proof for that assertion. You may well remember that Europeans are paying twice the price for their gas when compared to the US. We do not see riots in the streets of Europe but a lot of small cars.
If I look at my own utilities bill, the larger portion of it is for natural gas use in winter, not for electricity. My bill will not go up much overall if you doubled the electricity part. I would assert that is true for most people except those who commit the crime against nature of heating with an electric space heater. Those are the folks we are asking to change their ways.
I see Honda generators as a minor problem. Your average survival nut might take up with the nuissance of operating one but the typical 3rd floor apartment dweller will not. It is kind of noisy, smelly and the CO gives you these awful headaches... not to mention the weekly oil change, the repair downtime (so now you need two or large batteries...), the hate crimes of the neighbours... This one definitely falls into the "Some people are crazy some of the time but all people are never crazy all of the time" category.
"The electricity system is hugely inefficient because California has a peak demand at 5pm on weekday, which is about 2.5 times its demand at 4am (it might even be 3 times)."
How is that going to change if I raise the electricity prices? At best I will get people to switch from AC to ceiling fan, thus lowering peak demand. In order to decrease peaks due to AC use, CA is doing the one right thing: invest in PV.
I think we agree about a lot, otherwise.
It is the very inefficiency of electricity demand (peak 3X bottom) which necessitates the system that is required to produce it. Effectively capacity planning has to accomodate peaks, and idle expensive capacity for long periods*.
If you equate marginal cost of consumption to marginal cost of system to provide it, then the consumer will optimise consumption relative to cost of provision. That's basic economics.
*it's really all a bit more pernicious than that-- wind power in particular is disfavoured because it is intermittent. To the extent that you can match load to available supply (and avoid starting and running expensive gas and coal-fired reserve capacity) you could have more renewables in the mix, and less CO2 in the emissions.
Electricity is fundamentally less discretionary than driving as a consumer item. Here in the UK, those who use electricity to heat do so because they do not have gas as an option (either because they cannot afford to switch, they rent, or there is no gas mains connection)-- gas is about half as expensive as a heating/water heating fuel as electricity.
Doubling the domestic electricity bill of the average American (living in California or New York-- those living in places like Georgia pay much less, AFAIK) is going to hit those on small or fixed incomes the hardest.
It's worth remembering that when the Chicago heat wave hit, it killed those who didn't have air conditioning, or didn't feel they could afford to run it.
On the perverse incentives, most Americans don't live in apartments, I don't think. At that level, it would pay Mr. or Mrs. middle class householder to buy a Honda generator and run it, at that level of electricity prices.
Forgive this physicist for his criticism of this statement. What necessitates production facilities for electricity is the law of energy conservation. If you want to do work somewhere, you need energy from somewhere else. The ratio between minimum and maximum load of the power generation facility has nothing to do with it.
"If you equate marginal cost of consumption to marginal cost of system to provide it, then the consumer will optimise consumption relative to cost of provision. That's basic economics."
If you try to force people to take a cold shower they will simply kick your butt. That is a simple matter of human psychology.
"wind power in particular is disfavoured because it is intermittent."
Only if all you have is nuclear power plants which don't like to run on anything else than "full steam ahead". For the ultimate goal, to cut greenhouse gas emissions, the loss of cost efficiency in gas and coal fired plants does not matter, unless ALL you are interested in is money. From your line of argument I can only conclude that you are still caught up on decade old "cost/profit" thinking. In which case none of my technical arguments will impress you. Egotism is not impressible by technically sane decisions if they violate its only self interest.
"Here in the UK, those who use electricity to heat do so because they do not have gas as an option"
The first problem in the UK is poor building insulation. Basically every home can be fitted with oil heating, which is at least 2.5 times more energy efficient than electrical heating. It is up to the government to make sure these measures are being implemented.
"Doubling the domestic electricity bill of the average American (living in California or New York-- those living in places like Georgia pay much less, AFAIK) is going to hit those on small or fixed incomes the hardest."
People on small fixed incomes are victims of partisan politics in Congress which has not raised the minimum wage in a decade and a half. You are mistaking a symptom of failed domestic social politics in the US with an energy problem. As such, you are at best, naive, at worst, I would have to accuse you of abusing one problem to delay the solution of another. That would be tactics worthy of Chimp's party.
"It's worth remembering that when the Chicago heat wave hit, it killed those who didn't have air conditioning, or didn't feel they could afford to run it."
One might add that a lot of people could have been saved if US emergency rooms were properly funded and people without health insurance would not be afraid of calling an ambulance at the first sign of trouble. I have been waiting for six hours in an emergency room without seeing any progress at all. Have you? Frequently people with heart attacks are made to wait 12 hours. Needless to say... a lot of them die or suffer irreperable harm.
It looks like you don't have the slightest clue of what is going on in the US.
It happened that they were already getting about 30% of their electricity production from renewables, and their residential users were less than 30% of their electricity consumption, so even if every residential user enrolled in the program, ¡they would do nothing at all!