4 ms·

There is another approach that could also alleviate some of the pressure. Instead of keeping the consumer price fixed and allowing the utility to control your

There is another approach that could also alleviate some of the pressure. Instead of keeping the consumer price fixed and allowing the utility to control your load, you can allow the consumer price to float. Most of these markets have a 24hr-ahead clearing price for energy. I think you aught to be able to expose retail consumers to fluctuations based on the day-ahead market to let people make their own choices for energy usage. Given that exposure, enough consumers will change their behavior to soften the variability in price. It might also make distributed energy storage Just Work (TM) if individual battery owners have a vector to profit from supporting the grid.

nerdponx 7y ago
In the USA I thought the price already floated based on market rates. Yes, absolutely this is the way to go. It works well for gasoline, for instance.
- brandmeyer 7y ago
  Retail consumer prices don't float in most markets. Some markets have time-of-use pricing for some part of the year, but even those have a fixed peak/off-peak rate that is fixed well in advance.
minikites 7y ago
>I think you aught to be able to expose retail consumers to fluctuations based on the day-ahead market to let people make their own choices for energy usage. What prevents an electric company from significantly raising prices for a day to catch people off guard? I can't exactly switch electric companies to punish them.
- benj111 7y ago
  The UK can manage to have competing power companies, so its clearly possible.
- Hello71 7y ago
  what prevents them from significantly raising rates permanently?
  - minikites 7y ago
    People would notice, protest, lobby government for regulation, the usual methods of expressing civil discontent. I'm talking about a situation where people don't notice until after the fact.
  - brandmeyer 7y ago
    There are other futures markets that are bootstrapped off of the day-ahead market. Weeks/months out are used to schedule maintenance operations. Years out are used to schedule construction/decommissioning. So if the extended market prices are high enough, then this acts as a signal to add generation and/or distribution capacity. Likewise, if the extended market prices are low enough, this acts as a signal to retire capacity that has a higher operating cost/lower profit margins.
- aqme28 7y ago
  Isn't that basically what Enron did to California? Theoretically they are already doing this, just not to retail customers.
  - solarkraft 7y ago
    Yep. In Germany, afaik, we have Aluminium plants that are very precisely regulated like this.
- brandmeyer 7y ago
  You can't switch electric companies, but you can choose to switch off your load (or increase your source), thus denying them revenue or increasing their payments to you. It also gets harder to game this system as distributed generation gets better penetration. The optimal thing to do as a residential energy provider is also naturally stabilizing for the grid. If a cabal of generators acts to restrict supply and artificially raise the price, then everyone who isn't a member of the cabal makes a killing selling energy into the market. Its also hard for a cabal to squeeze residential providers out of the market through lower prices. Distributed generation is a small fraction of any individual provider's income. In most cases, a residential provider is paying for their system over several years. So in order to squeeze them out, a cabal would also have to sustain a campaign of artificially low prices for a span of years in order to have an impact. Distributed generation means that there is a pool of small independent suppliers whose rational choice always acts to counter the actions of any oligopoly that attempts to form.

nerdponx 7y ago

In the USA I thought the price already floated based on market rates. Yes, absolutely this is the way to go. It works well for gasoline, for instance.

brandmeyer 7y ago
Retail consumer prices don't float in most markets. Some markets have time-of-use pricing for some part of the year, but even those have a fixed peak/off-peak rate that is fixed well in advance.

minikites 7y ago

>I think you aught to be able to expose retail consumers to fluctuations based on the day-ahead market to let people make their own choices for energy usage. What prevents an electric company from significantly raising prices for a day to catch people off guard? I can't exactly switch electric companies to punish them.

benj111 7y ago
The UK can manage to have competing power companies, so its clearly possible.
Hello71 7y ago
what prevents them from significantly raising rates permanently?
- minikites 7y ago
  People would notice, protest, lobby government for regulation, the usual methods of expressing civil discontent. I'm talking about a situation where people don't notice until after the fact.
- brandmeyer 7y ago
  There are other futures markets that are bootstrapped off of the day-ahead market. Weeks/months out are used to schedule maintenance operations. Years out are used to schedule construction/decommissioning. So if the extended market prices are high enough, then this acts as a signal to add generation and/or distribution capacity. Likewise, if the extended market prices are low enough, this acts as a signal to retire capacity that has a higher operating cost/lower profit margins.
aqme28 7y ago
Isn't that basically what Enron did to California? Theoretically they are already doing this, just not to retail customers.
- solarkraft 7y ago
  Yep. In Germany, afaik, we have Aluminium plants that are very precisely regulated like this.
brandmeyer 7y ago
You can't switch electric companies, but you can choose to switch off your load (or increase your source), thus denying them revenue or increasing their payments to you. It also gets harder to game this system as distributed generation gets better penetration. The optimal thing to do as a residential energy provider is also naturally stabilizing for the grid. If a cabal of generators acts to restrict supply and artificially raise the price, then everyone who isn't a member of the cabal makes a killing selling energy into the market. Its also hard for a cabal to squeeze residential providers out of the market through lower prices. Distributed generation is a small fraction of any individual provider's income. In most cases, a residential provider is paying for their system over several years. So in order to squeeze them out, a cabal would also have to sustain a campaign of artificially low prices for a span of years in order to have an impact. Distributed generation means that there is a pool of small independent suppliers whose rational choice always acts to counter the actions of any oligopoly that attempts to form.