A New Electricity Pricing Paradigm?

General discussion of thorium and nuclear energy.
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Re: A New Electricity Pricing Paradigm?

Post by Lindsay » Aug 25, 2014 11:59 pm

E Ireland wrote:
Lindsay wrote:The real cost of the shift is going to time of use (ToU) metering at the domestic level as old meters are being replaced, it is not a large cost, especially if done en-mass as the new domestic metering standard.
The risk of time-of-use charging is that it potentially catches people out when the time of use happens to be the time they happen to be boiling the kettle or cooking a cooked breakfast or some-such - when their load will be far smaller if the measurement happened to have taken place 90 seconds later.
It doesn't work that way, in systems that I'm familiar with, coincident peak demand is measured in kWh/half hour or average kW over a 30 minute period which doesn't penalise anyone for having a cup of tea. If you boiled cup of cold water every minute to make 30 cups of teas in 30 minutes, that would make a difference and you'd pay accordingly, BUT ONLY IF YOU DO THIS WHEN THE ENTIRE SYSTEM IS RUNNING A COINCIDENT PEAK.
E Ireland wrote:There is nothing to stop customers selling their excess energy to a third party if they wish to and are willing to pay the distribution charges (that would be induced because you would need additional capacity to allow the electricity to be routed to a different location at those times) - just that I expect it would be nowhere near worth it.

A flat tariff allows optimised distribution since you don't have to handle load centres shifting all over the place - and we appear to be chasing marginal gains that will likely be lost in the noise of all the various small inefficiencies inherent in consumer purchasing.
Meanwhile the social benefits of a simple transparent scheme that for most people would simply be a fixed direct debit are enormous.
Energy is so cheap as to be almost worthless.
Power is expensive.
Consumers would not on-sell power, they'd simply use less and that electricity is available to another consumers at the marginal production cost of $5/MWh provided that is outside of the observed coincident peak period. For example a grid connected aluminium smelter could drop consumption to a low level say 33% of normal during coincident peaks to minimise their cost of electricity and ramp up outside of those peak periods to maximise production from low cost electricity at $5/MWh, significantly reducing the cost of finished aluminium. The MSR based power stations don't care, because their alternative in this scenario is to reduce production during off peak periods, which results in only a very small reduction in total generation costs.
E Ireland wrote:A flat tariff allows optimised distribution since you don't have to handle load centres shifting all over the place.
Load centres are geographic in nature and don't tend to move quickly, consumers will tend to change their behaviour to avoid cost, but the load centres will be wherever the load is which will be based on industry or people of some mix of the two. That change in behaviour will take time to fully develop and then become fixed, until the next major structural change in electricity prices.

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Re: A New Electricity Pricing Paradigm?

Post by E Ireland » Aug 26, 2014 2:58 am

A grid connected aluminium smelter would likely be adjacent to the power plant - which means electricity is even lower than the $265/kW given in my earlier calculations. You would be looking at $140/kW or so which translates to roughly $16/MWh. This electricity price is so low that it is highly doubtful that marginal reductions to even lower prices would overcome your reduced capacity factor. That amounts to an energy cost saving of roughly $130/t which has to be offset against your reduced utilisations and your reduced efficiency (throttling smelters has historically tended to cause huge problems). You might have difficulty keeping the potlines molten and since the coincident peak on any given day is inherently unpredictable you could lose ~5-10% of your production avoiding he blocks of time that are likely candidates.
Additionally the peak electricity price is going to end up being enormous to defray the entire capital cost of the generators at that time - so you may not actually save that much money on your average electricity rate.

Additionally $5MWh is so cheap it seems unlikely anyone would throttle back -at that price its worthwhile to use an electric furnace to sterilise my household wastewater and boil it off as steam to avoid the sewerage charge. Let alone more sane things like heating my pool(which these very low charges allow me to afford). It seems unlikely that off peak prices would ever fall below ~$10/MWh because the consumption possibilities become enormous at that level.

And load centres do move in this model as I don't have a smelter in my garden. You will require excess transmission capacity in almost all cases.

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