what really gets me, is when the CPUC proposes plans to punish energy savers by increasing the base billing rate and then reducing the per KW charge. It's the exact opposite of what we need to encourage for reduced power consumption. Also, the ANTI solar campaigns that the CPUC has launched are really egregious. I'm surprised CA would allow such a thing as the new NET 3.0 crap.
This is pure regulatory capture. Plain and simple.
Look at the proposals of the past few years to see it. These proposals say things like helping under served communities or combating wealth inequality, but similar to “Save the children” bills, the titles rarely have any relevance to the content. Every proposal has been about nothing other than protecting and increasing utility company profits.
From my view as a consumer and constituent, the government has failed. The simple fact that we allow for profit companies to manage and profit from essential utilities is ridiculous. That we are allowing these companies to write laws that increase their profits at the expensive of society and the environment is a tragedy.
Simply put, sdge, pge, and friends, need to be non profits run by the government. CA state should nationalize these companies and reduce profits to zero while actually promoting roof top solar.
The equipment cost is getting closer and closer to just being able to remove your meter and go on your own. I keep watching them drop, and wonder at what point i'll just pull the trigger. Especially the last year, inverters and 48V batteries are really starting to come down.
Like HOAs this is something to keep an eye on when moving; what required utilities exist (for example, around here you don't even need to connect to sewer and water if you're on the outskirts and have at least an acre).
This is actually something that will end up being a ballot proposition in a place like California, and I suspect it will be very popular. Much easier to sell than reforming the CPUC appointments or sunsetting investor owned utilities.
There are isolated instances of this, but it is not all that common. Nearly all Californians can go off-grid, if they want to and can afford the costs.
But CPUC is already appointed by the Governor. And they control the prices.
I remember when Gray Davis got recalled. The prevailing opinion was that (dramatically) increasing vehicle registration costs pushed that over the finish line.
The fact that they've managed to keep virtually all of the outrage directed at the utility companies is an amazing PR success for the Governor.
Just so that I'm very clear in my points, my anger and outrage is directly entirely at CPUC. I don't expect companies to have my best interests in mind, but I do expect the government to serve me and not PG&E, SDG&E, etc.. shareholders. Naive as that may be.
Is grid solar always cheaper? I could see that, I could also see that not being the case in the short term if the power lines need to be replaced (or buried in California because of wildfires). It seems harder to do coordinated actions politically rather than let consumers buy products.
Everyone is, because the grid is built out of smaller grids.
You and some number of your neighbors are connected to a transformer, some number of those transformers are connected to a larger transformer, and so on up the chain until you have an actual large grid.
Okay, but this thread is talking about billing, right? That's the point of talking about costs. How many people in California are paying their electricity bills to a utility that covers just their neighborhood, and nobody else?
The thread was talking about non-rooftop solar overloading the grid. But you don’t have to go straight from non-rooftop to multi square mile power plant - you can have an intermediary that would reduce grid stress and not increase it.
Residential generation is 0.06$/kwh. Residential storage is 0.20$/kwh.
My power from the utility is 0.53$/kwh.
If you look at power price increases in CA, you get a pretty good ROI today going solar+battery. But amortized battery prices are going to drop by 75% in the next 5 years (e.g. lifecycle improvement + cost reductions). If you have the capital, it’s going to be a no brained to go residential solar provided you are allowed to disconnect from the grid.
I happily have two solar systems and I have wondered this for a long time. Why can't I buy electricity generated from PV panels that an energy provider operates without putting those panels on my house? Why isn't the price to buy solar generated electricity from my utility company comparable to buying from a roof top solar company? I would assume that installing bespoke aftermarket systems one house at a time would not have a cost advantage over a project built to scale? I don't want to operate my own utility, just buy cheaper greener power.
Solar is only cheap during the day. For the rest of the time, you still need other power plants, especially because during peak hours of 4-9pm, there's no solar.
During peak solar, California have so much power that it is exported [0]. But you can't turn off natural gas generators, because they're slower to ramp up and down. With so much solar, gas has to be able to quickly ramp up to meet peak power. This is a problem they call the duck curve [1].
California doesn't need more solar, it needs more batteries. That's why the residential power buyback plan changed to incentivize batteries rather than just allowing 1:1 rates (new NEM 3.0). You probably got solar panels before that, as that changed just this year. With the old NEM2 1:1 rates, you're using the grid as a free battery during the night.
The 'save the children' crap started decades ago when utilities demanded a lot of extraneous, huge ugly bright scary warning labels, extra disconnect boxes, and so on. The goal was to make it as ugly and expensive as possible to discourage residential installs.
Further, an inspection by the local government inspector wasn't sufficient. See, you've also got to get the electric company to inspect the system as well, and they'll demand things not spec'd in the state/national code...or they won't allow the system to be connected.
This shit is even going on at the grid level. Our regional electrical grid organization admits that their approval process for grid-scale solar or wind connects can take a decade. They insist that much planning is needed for "reliability."
> increasing the base billing rate and then reducing the per KW charge
(Almost) every utility should do this. It more accurately reflects the real cost structure of grid maintenance, which doesn't depend on how much energy you use so much as on your peak usage during peak hours. In a world where home solar installations are common it's especially important, since you don't want people relying on the grid for backup power during period of low sun without paying anything to maintain that infrastructure. That's unsustainable in the long term.
> I'm surprised CA would allow such a thing as the new NET 3.0 crap.
The CA legislature actually required that a change be made with AB 327. The details were ultimately up to CPUC, but CPUC was attempting to meet the broad goals of the legislature in making this change.
Additional power produced during times of peak solar insolation is not very useful to the grid because of all the existing solar and is most useful during the late afternoon and early evening when demand is high but solar output is low. Maintaining the grid costs money independent of the cost of electricity generation and under the old rules solar customers were effectively subsidized by non-solar customers. Since non-solar customers are on average poorer than solar customers (owning your home is generally a per-requisite after all) this amounted to a regressive transfer.
EDIT: Fixed wording in sentence about customer cross-subsidy
The rates are laundering the costs of paying everyone market rates for their houses burned down in wildfires. I agree that’s really fucking weird but what can I do?
If you feel very strongly about politics in California, you know, run for an elected office.
What if the new economics of solar mean that maintaining the wires actually costs more than producing the power? Who should pay more of those costs so that your preferred customer can pay less?
Why only a nominal charge for deliver? Delivery is the most expensive part of the while thing! In particular reliable delivery - unless you intend for the power to shut off every night.
Because PG&E buys wholesale energy at 2-4c/kwh and distributes it broadly for 28-50c/kwh. why should it cost that much for delivery on the local set of wires?
Seems like a lot of complexity that can be solved by simple spot pricing for electricity. With spot pricing you can decouple solar and battery storage, as battery owners can make a profit by storing electricity when it's cheap and selling it when it's expensive. Solar power owners can just sell to the grid at market rate.
Yeah this would be the way to go. Intelligent, automatic, prioritized, voluntary, per-household (or even per-device) load shedding with no central planning required.
It's not just possible, it's actually done in practice.
You pay a lower rate and allow the utilities to shut off your power during peak demand. Usually people will have two meters - a regular one at full price, and a lower priced one that's connected only to heat pumps.
It's marketed as "let us control your thermostat for lower electric rates".
This was done in Texas. You could get power at pass thru rate. The freeze came and griddy, a pass thru supplier begged everyone to switch because the rates would explode due to market demand pricing. Those who didnt switch got charged thousands because it's straight pass thru pricing.
Some who knew how this worked just turned off their breakers or switched to generators. Those who refused complained to the state, and then of course the rest is history.
This is an issue where there just weren't sane defaults.
Some people will want power to be turned off at the slightest increase in price.
Most people will tolerate a small increase in spot pricing over the normal state of affairs, but would like to be disconnected if, say, electricity more than doubles over what would be normal for that time of day.
Other people will tolerate huge increases in price-- and should be able to opt into this behavior after careful acceptance of disclosures.
Indeed, having different thresholds where demand goes away is essential for spot markets to work. Otherwise, the only change in demand is from those actively watching the spot rates (either through automation or manually). It makes sense to provide a minimal level of that automation "built into" the product.
A house will not cool down immediately. It will cool down rather slowly in most cases (or at least if it's well built). There are also various ways to store thermal energy or use alternative, non-electric heat sources.
If the price goes up 10000x there will be blackouts in any case regardless if spot pricing is used or not. Spot pricing will _reduce_ blackouts.
I'll ride out a house that's 55F for a few hours to avoid paying 100x rate for electricity.
Having the choice is better: you can have everyone decide based on their situation what reflects what they want. Otherwise, demand doesn't go away and the choice between who uses 100% of the power they want to use and who uses 0% is left to arbitrary choice.
That's so ridiculously American but fortunately 55 °F/13 °C isn't life threateningly cold. Winter Storm Uri was though. Being uncomfortable for a few hours for a couple thousand dollars, sure, make your choice. Being forced to choose to be in debt for the rest of your life, vs dying from cold exposure though? Just seems cruel to poor people. Which I guess is what passes for amusement for the rich.
If there's insufficient power after a disaster for all homes to be heated, you have to make a decision about where the power goes somehow. If you just let everyone demand all the normal amount of power, you're going to have to completely turn off a bunch of customers and the decision is going to be pretty arbitrary.
Obviously regulators should make sure these are very, very rare events (by requiring sufficient overprovisioning and redundancy vs. failure scenarios).
There are all kinds of market outcomes in a situation like this that we might not like (and might take actions to fix to some extent). But without a market and price mechanisms involved in allocating the scarce resource, you're going to get worse outcomes.
The problem with unrestricted spot pricing is that it's easy to end up with a surprise bill due to circumstances beyond your knowledge or control. E.g. the heating system fails in the apartment complex next door, so everyone plugs in space heaters. Your bill goes up also due to the increased demand. They can get insurance to cover this sort of eventuality -- can you?
I know two ways to fix this. First, obviously, you didn't say "unrestricted". There are various ways to restrict spot pricing to alleviate these issues, e.g. guarantee each home a particular amount at a fixed rate, and overages are at spot rates. Second, the "knowledge" angle can be attacked -- if you know that's happened, you can turn down your thermostat.
In Nordpool the prices are set the day behind so there's no surprise bill. If the spot price goes up one actually should pay more, which incentives reducing electricity consumption.
I think your apartment complex example is not that realistic as it won't affect the spot price. Something more like a war will..
Yeah, and then I can buy some insurance / hedges against the spot prices of electricity, day trade my air conditioner, and complete the financialization of my life.
I don't think spot pricing for electricity is all that simple.
I don't think it's really reasonable for households to pay the raw spot pricing. Someone else (utility company? government?) should be backstopping the prices for them. Time of use pricing based on typical prices seems reasonable enough.
For large industrial consumers, sure; let them pay based on actual costs, and they'll adjust their peaks to save money, which helps even out the supply/demand, which is great.
For electricity producers, spot pricing isn't really enough either, though. There needs to be some compensation for available capacity as well as generation.
I agree that it makes sense to try to decouple solar and storage though. Storage's ability to move capacity from peak generation to other times is valuable and should be compensated, and there's no reason to tie it to generation.
The majority of consumers at home would against spot pricing like that. California already has time-of-use pricing. Peak hours are 4-9pm when there's no solar. Peak usage is people coming home from work, turning on their lights, stoves, hot water, ovens, air conditioning, etc. Are they supposed to not do that?
Raising those rates too much would just be raising rates for everyone, just so those who are rich enough to afford solar panels and batteries make more profit.
I'm not expert in the system in California, but usually consumers are already paying the average spot price (plus some significant margin, which takes into consideration the demand profile of the consumer). Switching to spot pricing would not raise rates, and if consumer would adapt slightly to spot prices the average rate would actually decrease.
I keep an eye on the day-ahead market prices (which determine the hourly prices for time of day contracts) here in Belgium.
It turns out that the energy price charged by a traditional contract matches the peak price of a typical day, plus a healthy profit margin. This makes sense because most electricity is consumed when prices peak.
So switching to a time of day contract does not actually raise your effective price per kWh, at least here in Belgium. Instead, it more or less keeps the same price for peak time, while giving you access to much cheaper energy off-peak.
At least on all supply side. Including residential.
On demand side, I think fixed price contracts could be allowed. It is then up to those contract providers to buy enough future contracts at lower price to generate profit. Or just ride it out and hope their math was correct.
Don't forget that the CA energy market is highly regulated and isn't a free market, so there will always be haggling over anything that reduces the revenue of the utilities (as they don't really get to set prices).
This is harder than folks give credit. Folks want to leverage their own solar power for cheap, clean power; but they still want the availability of the grid for those moments when the sun isn't shining and the batteries are dry. The grid is expensive, and these folks are trying to avoid paying their share because the pricing scheme assumes that availability is highly correlated with actual usage.
The more self reliance individual customers have, the harder it is for generation plants to stay profitable. Break equilibrium stuff by adding more solar and seeing how it gets sustainably fixed might not be a terrible idea, but it is hard.
Yeah, the other side of the debate has legitimate points about free riders. This article dismisses them mostly by calling them names like "investor owned".
That isn't abundantly clear in the article. They don't cite a position paper by any MUDs, and there does not seem to be anything stopping MUDs from having community solar in practice already, as SMUD does.
Even if the article doesn't articulate that, if you follow energy policy in California that becomes clear very quickly. Almost no municipal utilities supported revising Net Metering, which ended up reducing the solar energy credits for residential systems by 75%.
One reason for them being called investor owned is many people own solar systems based on leases which means you don't own the panels on your house, the company that installed them does. This is to distinguish between owned by the consumers of power vs corps.
If this was actually above board and helpful, they wouldn't need any kind of coalition to do it, they would just build solar and sell it. But no, they are trying to do the easy part, and let the hard part fall on others.
And it doesn't help that they have requirements relating to the income of the end consumer! That's a sure sign of something that isn't useful on its own, rather they have other goals.
The specifics in CA are, the utilities want rich customers to subsidize the grid costs for poor customers. That is, you will pay for your grid connection based on your income, not usage.
If they go through with that I am going to feel so cheated. I live in a 1br apartment, in a dense city, using 2kwh a day, and they want me to subsidize people who literally own property??
IMO the grid connection cost should be based on the value of the property and billed to the property owner, not based on the income of each connection and billed to each person renting an apartment.
You already do, sorry to tell you. If you live in coastal, urban California you already pay way higher marginal costs to cover the baseline usage of people who live in the interior of California, regardless of whether those people are insanely rich or not.
Not sure what you mean. There is a fixed cost involved, and then a flat variable rate for kWh consumed. If I halve my usage from 60kWh/month to 30kWh/month, I would still be stuck paying $57/month (which is almost double my current bill, and averages to almost $2/kWh).
Basically I will be forced to pay at least $50/month ($600/year) for a hookup in an area where electricity has been built out for a century+.
There are something like 100,000 units in the same situation, so my provider will be raking in $60m/year for a grid that is already built, just for my city alone.
Ah, I see what you are saying. That wasn't really what I was even getting at though. Because of the tier/baseline system, even the marginal rate you pay per joule is way higher in coastal California, to subsidize interior California. That's before we even start looking at the fixed charges.
The grid has maintenance costs, especially in California, where there is a lot of deferred maintenance that needs to be done. Distribution costs (which don't really scale with usage) are about 50% of the average monthly bill. Is the grid worth $50/month to you? It certainly is to me, and a $30-50/mo grid bill would be in line with the monthly connection costs for Gas and Water, which don't use the silly usage-only billing method that Electric does.
I don't use gas except for the stove, so if they charged me anymore than $10/month for gas I'd tell them to get away from me with their toxic waste. Currently I pay about $5/month there.
I don't pay for water, it is grouped by the building. Which is exactly what I'm suggesting for electricity -- multi unit buildings should have a single connection cost, not one per tenant.
If it would be up to free market, you would be paying for supplying electricity from your solar panels to the grid during day (because there is nowhere to store it) and paying for feeding electricity of the grid during the night (because somebody must make it)
Nobody would pay to supply to the grid. If it came to that, panels would have an automatic shutoff, or some device that burns off excess electricity by doing pointless work.
That's odd, because traditionally, daytime generation is the hardest for utilities to keep up with, especially with factories (induction motors), offices, and residential HVACs - all of which are used less outside the day shift (before sunset).
So much so that many time of use programs are most expensive from 10am-7pm (DST)
The investor owned utilities generally make money off transmission, thus they prefer large solar farms that are generally far away and located in ecologically sensitive areas.
You should be sympathetic to the random company because it keeps the lights on for millions of people. If a handful of people have the ability to say "I've taken care of ME, so I'm not going to engage with society anymore", then they may put an impractically large burden on their neighbor who lacks the capital to build their own solar. You should also be sympathetic to the fact that the folks with their own solar still want to be attached to the grid without paying for its upkeep and that's not fair.
You absolutely, 100%, do not want free market economics on power! This is a necessity that has a huge capital cost meaning you are often given only a single company that can supply you with energy. You do NOT want that to be a free market. You want the government to protect your rates, which they do.
You are talking as if this is an impasse. There are other things they can do, like fast expiring credits, or give users an ability to charge their car for free at work, when they can generate equivalent power at home, but don't let credits rollover.
This is not a consumers vs producers zero-sum issue. There are always more uses for cheap power. Desalination, agriculture, extracting water from air etc. The cheaper the energy we can produce, the better off everyone will be.
It's not an unsolvable impasse, but it's tricky. Just the technological mechanisms for your example proposals are rather hard; the economic and social problems are even harder.
> This is not a consumers vs producers zero-sum issue.
It's not zero sum, but if we externalize the entire cost of the infrastructure onto people who cannot deploy solar, it will be very inequitable; that's been the default path we've been on.
And it's going to be an issue of significant debate what exactly is equitable and good policy.
Meh. Aren't there industrial, agricultural and public customers for electricity? Already, electricity in CA is among the expensive in the country. We do want to save the planet, right?
So the solution is to charge more the people who already pay for their solar? Who now only get 8$ for 300$ for any additional electricity they produce(NEM 2.0, best case, or get 4c worth of electricity for every 1$ of electricity they produce in NEM 3.0)
I don't think you're understanding my comments. I didn't defend current policy. I merely pointed out there's a big set of tradeoffs to be made and in the end it's a normative choice.
Someone has to pay for transmission and distribution in residential areas. If the choice is "residential users without solar panels bear the full cost," you end up with apartment dwellers and the poor paying for all the infrastructure. Hence, IMO you have to do something and think carefully about policy to have reasonable outcomes and avoid unnecessary complexity.
It's not zero sum, but it is a complicated social, technical, and economic problem. If we reach a good compromise, we should expect that few will be happy with it.
> The cheaper the energy we can produce, the better off everyone will be.
This is a good point. But it only holds if the benefits of the cheaper energy accrue to society in general. It does not hold if it goes entirely to the ones who have built the means of generation. Which ironically, unlikely almost every other economic situation, is the small indie consumers! The big players and the grid operators are the ones that get squeezed out and, as a result, causes harm to the majority of normal individuals.
To be fair, it's possible to fix the pricing scheme.
I currently pay a bit over $40/month for a natural gas connection and a bit under $0.40/month (total) for the actual gas consumed by our stove top, our only gas appliance. (We'll probably go induction eventually, but it works for now.)
Of course, I don't generate gas and sell it back to the utility, but the point still stands that the electric utility could fix their pricing to correctly charge for availability and usage.
The sun does not shine at night, even in California. Summer is often accompanied by a loss of wind power. Energy sources that can be regulated are direly needed, depending on location, countries tgat decarbonized use either hydropower, geothermal or nuclear plants as a backup. Batteries are still too expensive for the needs of an industrial society, plus you have to replace them often.
While the sun does not shine at night in California, the energy usage of HVACs (the top consumer in the average house) is also about ¼ the need of in the daytime.
Hot water usage (2nd highest amp draw) is also reduced shortly after sunset.
Laundry dryers (3rd highest amp draw) is also typically reduced during the night.
Off the grid cabins frequently use a hybrid setup, where a (typically) propane generator refills the batteries during extreme load or whenever they dip below n%. It's handled by a smart system that can optimize for house temperature, minimum propane or electricity used, etc.
This works very well because you rarely need it and propane has a fixed, predictable cost. Unfortunately, it doesn't work in CA due to their rules about generators.
I think the most dishonest thing about the boosters of small-scale solar is that we need their long tail of small batteries to cover peak hours in late summer. The large-scale batteries are doing the job perfectly well. The large-scale battery guys have installed way more batteries than whatever community-based, open-source, vehicle-to-grid thing you are imagining. Here's my graph of California's state of charge: https://observablehq.com/@jwb/caiso-state-of-charge
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[ 2.9 ms ] story [ 188 ms ] threadLook at the proposals of the past few years to see it. These proposals say things like helping under served communities or combating wealth inequality, but similar to “Save the children” bills, the titles rarely have any relevance to the content. Every proposal has been about nothing other than protecting and increasing utility company profits.
From my view as a consumer and constituent, the government has failed. The simple fact that we allow for profit companies to manage and profit from essential utilities is ridiculous. That we are allowing these companies to write laws that increase their profits at the expensive of society and the environment is a tragedy.
Simply put, sdge, pge, and friends, need to be non profits run by the government. CA state should nationalize these companies and reduce profits to zero while actually promoting roof top solar.
https://signaturesolar.com/complete-all-in-one-off-grid-sola...
Worse… they have no incentive to disconnect you since the connection costs zero and they are guaranteed revenue.
I remember when Gray Davis got recalled. The prevailing opinion was that (dramatically) increasing vehicle registration costs pushed that over the finish line.
The fact that they've managed to keep virtually all of the outrage directed at the utility companies is an amazing PR success for the Governor.
You and some number of your neighbors are connected to a transformer, some number of those transformers are connected to a larger transformer, and so on up the chain until you have an actual large grid.
Residential generation is 0.06$/kwh. Residential storage is 0.20$/kwh.
My power from the utility is 0.53$/kwh.
If you look at power price increases in CA, you get a pretty good ROI today going solar+battery. But amortized battery prices are going to drop by 75% in the next 5 years (e.g. lifecycle improvement + cost reductions). If you have the capital, it’s going to be a no brained to go residential solar provided you are allowed to disconnect from the grid.
During peak solar, California have so much power that it is exported [0]. But you can't turn off natural gas generators, because they're slower to ramp up and down. With so much solar, gas has to be able to quickly ramp up to meet peak power. This is a problem they call the duck curve [1].
California doesn't need more solar, it needs more batteries. That's why the residential power buyback plan changed to incentivize batteries rather than just allowing 1:1 rates (new NEM 3.0). You probably got solar panels before that, as that changed just this year. With the old NEM2 1:1 rates, you're using the grid as a free battery during the night.
[0] https://www.eia.gov/electricity/gridmonitor/dashboard/electr...
[1] https://en.wikipedia.org/wiki/Duck_curve
Further, an inspection by the local government inspector wasn't sufficient. See, you've also got to get the electric company to inspect the system as well, and they'll demand things not spec'd in the state/national code...or they won't allow the system to be connected.
This shit is even going on at the grid level. Our regional electrical grid organization admits that their approval process for grid-scale solar or wind connects can take a decade. They insist that much planning is needed for "reliability."
You mean more than it does by mandating it on all new single- and multi-family dwellings?
(Almost) every utility should do this. It more accurately reflects the real cost structure of grid maintenance, which doesn't depend on how much energy you use so much as on your peak usage during peak hours. In a world where home solar installations are common it's especially important, since you don't want people relying on the grid for backup power during period of low sun without paying anything to maintain that infrastructure. That's unsustainable in the long term.
The CA legislature actually required that a change be made with AB 327. The details were ultimately up to CPUC, but CPUC was attempting to meet the broad goals of the legislature in making this change.
Additional power produced during times of peak solar insolation is not very useful to the grid because of all the existing solar and is most useful during the late afternoon and early evening when demand is high but solar output is low. Maintaining the grid costs money independent of the cost of electricity generation and under the old rules solar customers were effectively subsidized by non-solar customers. Since non-solar customers are on average poorer than solar customers (owning your home is generally a per-requisite after all) this amounted to a regressive transfer.
EDIT: Fixed wording in sentence about customer cross-subsidy
If you feel very strongly about politics in California, you know, run for an elected office.
Put solar upstream in place 1, allow it to be removed downstream at place 2.
People at place 2 could subscribe to solar from place 1 and get it at cost + a nominal delivery charge.
More you use something, cheaper per used thing it gets. As cost is amortized over more units.
You pay a lower rate and allow the utilities to shut off your power during peak demand. Usually people will have two meters - a regular one at full price, and a lower priced one that's connected only to heat pumps.
It's marketed as "let us control your thermostat for lower electric rates".
Some who knew how this worked just turned off their breakers or switched to generators. Those who refused complained to the state, and then of course the rest is history.
https://en.wikipedia.org/wiki/Griddy
Some people will want power to be turned off at the slightest increase in price.
Most people will tolerate a small increase in spot pricing over the normal state of affairs, but would like to be disconnected if, say, electricity more than doubles over what would be normal for that time of day.
Other people will tolerate huge increases in price-- and should be able to opt into this behavior after careful acceptance of disclosures.
Indeed, having different thresholds where demand goes away is essential for spot markets to work. Otherwise, the only change in demand is from those actively watching the spot rates (either through automation or manually). It makes sense to provide a minimal level of that automation "built into" the product.
If the price goes up 10000x there will be blackouts in any case regardless if spot pricing is used or not. Spot pricing will _reduce_ blackouts.
Having the choice is better: you can have everyone decide based on their situation what reflects what they want. Otherwise, demand doesn't go away and the choice between who uses 100% of the power they want to use and who uses 0% is left to arbitrary choice.
Obviously regulators should make sure these are very, very rare events (by requiring sufficient overprovisioning and redundancy vs. failure scenarios).
There are all kinds of market outcomes in a situation like this that we might not like (and might take actions to fix to some extent). But without a market and price mechanisms involved in allocating the scarce resource, you're going to get worse outcomes.
I know two ways to fix this. First, obviously, you didn't say "unrestricted". There are various ways to restrict spot pricing to alleviate these issues, e.g. guarantee each home a particular amount at a fixed rate, and overages are at spot rates. Second, the "knowledge" angle can be attacked -- if you know that's happened, you can turn down your thermostat.
I think your apartment complex example is not that realistic as it won't affect the spot price. Something more like a war will..
I don't think it's really reasonable for households to pay the raw spot pricing. Someone else (utility company? government?) should be backstopping the prices for them. Time of use pricing based on typical prices seems reasonable enough.
For large industrial consumers, sure; let them pay based on actual costs, and they'll adjust their peaks to save money, which helps even out the supply/demand, which is great.
For electricity producers, spot pricing isn't really enough either, though. There needs to be some compensation for available capacity as well as generation.
I agree that it makes sense to try to decouple solar and storage though. Storage's ability to move capacity from peak generation to other times is valuable and should be compensated, and there's no reason to tie it to generation.
Raising those rates too much would just be raising rates for everyone, just so those who are rich enough to afford solar panels and batteries make more profit.
It turns out that the energy price charged by a traditional contract matches the peak price of a typical day, plus a healthy profit margin. This makes sense because most electricity is consumed when prices peak.
So switching to a time of day contract does not actually raise your effective price per kWh, at least here in Belgium. Instead, it more or less keeps the same price for peak time, while giving you access to much cheaper energy off-peak.
https://theconversation.com/whats-behind-15-000-electricity-...
They were exposed to electricity spot prices and got bit hard when they spiked during a winter event that overloaded the grid.
On demand side, I think fixed price contracts could be allowed. It is then up to those contract providers to buy enough future contracts at lower price to generate profit. Or just ride it out and hope their math was correct.
The more self reliance individual customers have, the harder it is for generation plants to stay profitable. Break equilibrium stuff by adding more solar and seeing how it gets sustainably fixed might not be a terrible idea, but it is hard.
I don't know anything about the specifics of CA.
If this was actually above board and helpful, they wouldn't need any kind of coalition to do it, they would just build solar and sell it. But no, they are trying to do the easy part, and let the hard part fall on others.
And it doesn't help that they have requirements relating to the income of the end consumer! That's a sure sign of something that isn't useful on its own, rather they have other goals.
IMO the grid connection cost should be based on the value of the property and billed to the property owner, not based on the income of each connection and billed to each person renting an apartment.
Which is ridiculous.
Basically I will be forced to pay at least $50/month ($600/year) for a hookup in an area where electricity has been built out for a century+.
There are something like 100,000 units in the same situation, so my provider will be raking in $60m/year for a grid that is already built, just for my city alone.
I don't pay for water, it is grouped by the building. Which is exactly what I'm suggesting for electricity -- multi unit buildings should have a single connection cost, not one per tenant.
I'd rather have an induction stove, a second heat pump, and an infrared fireplace in my only mildly cold se climate.
I pay $360 a year in base charges, and not even in February, when effectively trying to make it worth it does my usage exceed the base charge.
Then the are another 900 townhomes just like me. Yay for perverted utilities markets.
Why should I be sympathetic to the profits of some random company?
Let the market figure it out. Suppressing community solar is suppressing the free market. It's not right.
https://www.euractiv.com/section/energy/news/eu-must-address...
So much so that many time of use programs are most expensive from 10am-7pm (DST)
You absolutely, 100%, do not want free market economics on power! This is a necessity that has a huge capital cost meaning you are often given only a single company that can supply you with energy. You do NOT want that to be a free market. You want the government to protect your rates, which they do.
This is not a consumers vs producers zero-sum issue. There are always more uses for cheap power. Desalination, agriculture, extracting water from air etc. The cheaper the energy we can produce, the better off everyone will be.
> This is not a consumers vs producers zero-sum issue.
It's not zero sum, but if we externalize the entire cost of the infrastructure onto people who cannot deploy solar, it will be very inequitable; that's been the default path we've been on.
And it's going to be an issue of significant debate what exactly is equitable and good policy.
Yes, but someone has to pay for transmission and distribution into (and out of) residential areas.
Someone has to pay for transmission and distribution in residential areas. If the choice is "residential users without solar panels bear the full cost," you end up with apartment dwellers and the poor paying for all the infrastructure. Hence, IMO you have to do something and think carefully about policy to have reasonable outcomes and avoid unnecessary complexity.
It's not zero sum, but it is a complicated social, technical, and economic problem. If we reach a good compromise, we should expect that few will be happy with it.
This is a good point. But it only holds if the benefits of the cheaper energy accrue to society in general. It does not hold if it goes entirely to the ones who have built the means of generation. Which ironically, unlikely almost every other economic situation, is the small indie consumers! The big players and the grid operators are the ones that get squeezed out and, as a result, causes harm to the majority of normal individuals.
I currently pay a bit over $40/month for a natural gas connection and a bit under $0.40/month (total) for the actual gas consumed by our stove top, our only gas appliance. (We'll probably go induction eventually, but it works for now.)
Of course, I don't generate gas and sell it back to the utility, but the point still stands that the electric utility could fix their pricing to correctly charge for availability and usage.
Hot water usage (2nd highest amp draw) is also reduced shortly after sunset.
Laundry dryers (3rd highest amp draw) is also typically reduced during the night.
This works very well because you rarely need it and propane has a fixed, predictable cost. Unfortunately, it doesn't work in CA due to their rules about generators.