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PostPosted: Aug 13, 2014 5:04 pm 
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Electricity generation and delivery systems are expensive, most of that expense is capital and generally speaking a system that makes and delivers 1 MWe, costs as much to build and maintain whether it delivers 1 MW for 1 hour (1MWh/day) or 1 MW for 24 hours (24MWh/day).

What if we get the future that most forum participants hope for; where MSR/LFTR produces 90% of our electricity? Given that the marginal cost of production from the same assets is very low (less than a $1/MWh), would it make more sense to switch to a capacity based billing system where one pays for the average peak household or industrial demand set each year? Under such an arrangement we could use at much electrical energy as we liked so long as our peak demand remains the same. It would better align the cost of service to the consumer with the real costs of delivering that service.


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PostPosted: Aug 13, 2014 5:51 pm 
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Lindsay wrote:
Electricity generation and delivery systems are expensive, most of that expense is capital and generally speaking a system that makes and delivers 1 MWe, costs as much to build and maintain whether it delivers 1 MW for 1 hour (1MWh/day) or 1 MW for 24 hours (24MWh/day).

What if we get the future that most forum participants hope for; where MSR/LFTR produces 90% of our electricity? Given that the marginal cost of production from the same assets is very low (less than a $1/MWh), would it make more sense to switch to a capacity based billing system where one pays for the average peak household or industrial demand set each year? Under such an arrangement we could use at much electrical energy as we liked so long as our peak demand remains the same. It would better align the cost of service to the consumer with the real costs of delivering that service.


That's the sensible version of "electricity too cheap to meter."


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PostPosted: Aug 13, 2014 6:27 pm 
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This system is difficult to integrate with existing markets - unfortunately that means in the current system where the electricity supply is controlled by big business it would be impossible to implement.


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PostPosted: Aug 13, 2014 9:18 pm 
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Cthorm wrote:
That's the sensible version of "electricity too cheap to meter."
In many ways it is. That whole "Electricity too cheap to meter" phrase has quite an interesting history that I recommend everyone look into. The speaker was actually talking about the prospect of future fusion power where fuel costs would indeed be too cheap measure, or at least so he believed.
http://en.wikipedia.org/wiki/Too_cheap_to_meter


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PostPosted: Aug 13, 2014 9:20 pm 
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E Ireland wrote:
This system is difficult to integrate with existing markets - unfortunately that means in the current system where the electricity supply is controlled by big business it would be impossible to implement.
Not at all, it's an industry that I have worked in for many years and today many network distribution companies, the ones that own and operate the wires and transformers between the nearest grid substation and your home bill network charges to industrial and commercial customers by their average annual peak demand, so it's not a new concept to the industry. That said this billing practice is not normally seen at the retail domestic consumer level because the metering is energy only metering, not energy and demand metering normally seen on commercial and industrial connections.

As far as the money goes, electricity companies really don't care how you allocate costs and tariff structures to consumers so long as they receive the revenue expected for their assets over time. To the best of my knowledge there is no technical or commercial barrier a demand based billing structure aside from a need to upgrade domestic metering which is already underway in many places under the guise of smart metering.


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PostPosted: Aug 14, 2014 1:34 am 
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Problem is, you have to wait before you get 90% of your electricity from nuclear, before you do this.

Even then, there are likely huge infrastructure costs in doing this. Demand is already pretty stable in most regions, it is statistically levelled. Some use a lot, others use little. The maximum combination of such demand is what you design infrastructure for. If everyone is using a lot, then the grid capacity goes up. That's expensive, even if the electricity costs nothing.


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PostPosted: Aug 14, 2014 4:27 am 
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Well if there are no problems from the grid operators you could implement this partially in a mixed system.

For instance a reactor owner could lease out the kilowatts to domestic suppliers over the existing grid.
Now that we have smart meters owners could have a 'baseload' power value and then be charged on a normal basis for power over that level.

So for instance I would only lease a single kilowatt and accept that I would be charged for the power I use when I boil my kettle - over the one kilowatt limit.
This can occur no matter what the energy mix is.


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PostPosted: Aug 14, 2014 10:59 am 
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So, would this be similar to cell phones and data plans? A household/business would sign up for a certain monthly/quarterly electrical usage for a fixed rate, and any consumption beyond would be charged at a different rate??


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PostPosted: Aug 14, 2014 11:21 am 
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Sort of - except you would not care how many kWh was used as long as it was used at less than one kilowatt (or similar).

So the meter would bill power consumption below the prepurchased kilowatt as zero watts.
In a mixed system you might have problems determining who bought what electricity when though.

This really requires a vertically integrated system to function properly.


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PostPosted: Aug 14, 2014 12:41 pm 
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Jim L. wrote:
So, would this be similar to cell phones and data plans? A household/business would sign up for a certain monthly/quarterly electrical usage for a fixed rate, and any consumption beyond would be charged at a different rate??
The most likely approach would go something like this, your smart meter measures peak energy consumption as kWh/half hour block (48 blocks a day) that also coincide with the grid or system peak, calculates the average of the last 100 coincident peaks over the preceding 12 months, and from that calculation bills you accordingly.

There are variations on that theme, you could sign up for a certain capacity that the consumer nominates and pay a higher rate is you exceed your nominated capacity. One could run a combination of coincident peak and anytime peak, which is probably the smartest option, so let's say your average peak is 2 kW which translates into a $100/month power bill if your household peaks when the grid peak (coincident peak). If for some reason you never hit the coincident peak, you still need to pay something, so maybe your set the off-peak capacity charge at half the normal rate, so it you manage to miss all the coincident peaks, but still peak at 2 kW you pay half price of $50/month instead of the more normal $100/month. This last piece eliminates the free riders, someone who could under a coincident peak pricing scheme get away with paying an extremely low amount by simply turning off everything during peak grid demand periods.

Real-time grid or system peak data would be available to people and household power controllers via the internet, making it possible to aggressively manage household loads during grid or system peaks for those willing to tolerate the inconvenience.


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PostPosted: Aug 14, 2014 12:53 pm 
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E Ireland wrote:
This really requires a vertically integrated system to function properly.
You could separate the T&D portion which just becomes part of the $/kW charge, and have independent retailers holding capacity contracts with generators or more likely Gentailers, who generate the electricity that they sell to retail customers. Which leaves open the option of having the T&D part sitting on its own as fully regulated natural monopolies.

(T&D = Transmission and Distribution)


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PostPosted: Aug 14, 2014 1:30 pm 
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I am more in favour of using a simpler 'Economy 7' type two meter scheme.

You could even use a conventional meters.
Essentially you would have a conventional electromechanical meter with a backstop (so it can't turn backwards) and a biasing current on it that is equivalent to the rotation load from your nominated load (for argument I say 1kW) - so that if the meter is measuring less than 1kW it would simply stay still.

2 meters would enable you to set 'off peak' and 'on peak' overrun rates.

The problem with the coincidence measurement shown above is that it becomes rather difficult for the average person to understand (I am having trouble with it myself) which is hardly conducive to consumers making smart decisions.

Additionally if you must use electronic meters it could just be programmed remotely with the nominated load of the property and ignore any load below that.


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PostPosted: Aug 14, 2014 6:52 pm 
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Lots of possibilities but it is clear that we have problem brewing with the current system in California. Solar customers pay for the net electricity they use. (If it happens to be negative they get paid at wholesale rate). But this means if I install enough solar to meet my needs I pay nothing to the grid. I am not willing to disconnect from the grid though because it provides absolutely essential service for me in time shifting my generation from summer noon to winter evenings. This service is actually pretty expensive. If say 75% of the customers do this then the remaining 25% must pay not only for their service but also for the grid services provided to the 75% who are "free of the grid" and get "all their electricity from solar".
Clearly we have to change the pricing scheme. A big percentage of the system cost is the capital costs at peak hours. So it seems reasonable to charge based a high rate for peak hour usage. We are likely to face blackouts and near blackouts in California (they are advertizing all the time about reducing your power consumption during flex alerts) during which time power should be priced even higher.

I could see industrial customers paying for a capacity share of a generator and transmission system and even offering a similar arrangement to consumers. Though I expect for the majority of consumers an energy charge that varies with peak loading will make more sense than a power capacity charge.


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PostPosted: Aug 17, 2014 8:42 am 
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Who is going to invest in this business that only gives a return during the "peak" hours? Will the rates be so high to get the necessary return as to be exorbitant?

Will the utilities be run by private organizations or public? With public, I could see rate bases being good for the common good. With private, the stockholders must be considered.

The Nuke plants that they are building in Georgia are pretty expensive. Despite the rhetoric that I've heard multiple times that building LFTRs will be cheap, I'll bet the capital costs will still be high. The turbine, generator, auxiliaries, substation and political gifts to the public do not come cheap. The combined cycle option will cost even more. The capital costs and interest charges will need to be paid back. I'd think the investors would not want to see any product given away for free.

If this is a "merchant" plant, the investors will want every penny. They will be out to maximize returns. They will scream at any Public Utility Commission (PUC) that comes up with a rate structure that gives things away for free. They will enlist the aid of the conservative groups who will howl about government regulations and welfare electricity. There will be a spate of articles about the death of capitalism and the usual nonsense.

Another aspect to this is innovation. A cheap product does not encourage innovation. We are speaking of LFTRs, a conceptual product worked on long ago at Oak Ridge. Will free electricity ever encourage the beancounters to loosen their pockets for new ideas? This is happening right now with the cheap natural gas. Necessity is the mother of invention. Few new nukes are being built in the US due to the gas supply. No innovative new nuke plants are being constructed due to cheap natural gas. Free electricity would have the same effect.

Yeh,....to cheap to meter is too high a price to ever be built.


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PostPosted: Aug 17, 2014 11:20 am 
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Eino wrote:
A cheap product does not encourage innovation.


Precisely. We have arrived at an uneviable situation in the development of our societies. Electricity is a central good without parallel. Nearly every activity depends on a reliable and affordable flow of electricity. Hence, governments decree that electricity will be generated by regulated monopolies whose rates will be determined by a public service commission elected by the people. This naturally limits the profit that an electricity-generating utility can make.

Profit attracts investors in all sectors, and electricity generation, being a field of limited profit, does not attract much capital, particularly capital with an appetite for risk. Instead, such capital seeks activities that offer the promise of great profit because they have limited capital expenditures and the potential for exponential market growth...like software.

The government doesn't regulate software because much of it is unnecessary or simply a reflection of vanity. Who needs a public service commission to tell Facebook how much money they can make?

So what happens is risk-tolerant investors pursue investments in fields that really aren't that important for society's development because the government has restrained the ability of corporations to make impressive profits in fields that really are important to people's lives, like electricity generation.

So we end up getting Angry Birds 3 instead of thorium reactors.


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