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> distributed generation, reduces transmission infra costs Distributed generation does reduce transmission costs slightly, but nowhere near in line with the am

> distributed generation, reduces transmission infra costs Distributed generation does reduce transmission costs slightly, but nowhere near in line with the amount of credit being given. Transmission costs mostly scale with the maximum power demand and the reliability needed, not with actual power delivered. Billing for distribution and grid reliability with a usage-based charge made sense when the power company was an absolute monopoly, but it doesn't with distributed power. Grid connectivity and distribution should be billed as a flat rate, or based on the size of the mains connection. That would be more in line with the actual costs.

jandrese 4y ago
IMHO this is where the incentives are poorly aligned. The power companies should be offering incentives for people to install home battery systems but only if they are configured to act as a virtual peaker plant. IE the power company gets to decide when the battery is discharged to the grid. Maybe the power company buys the batteries and the homeowner pays the install cost. The homeowner gets a backup that works when the power is out, and the power company doesn't have to build and run expensive peaker plants and can further defer upgrading the backhaul lines. Total cost is higher than grid scale battery backup, but since the price is split it should be cheaper for the utility and also the grid scale battery storage doesn't help the backhaul problem. In the past the problem was that we simply were not making enough batteries so the market price was too high, but with battery production rapidly ramping up this should be practical if not now then within just a year or two.
- deleted 4y ago
  [deleted]
- ec109685 4y ago
  They can do that with pricing. E.g. when the grid most needs the power, price the surplus accordingly. I think NEM 3.0 has some provisions for that where power in the 4pm to 7pm block (or close to that) is bought back at a high rate.
  - jandrese 4y ago
    I've seen stories of isolated pockets of California where they do this and the people on the program are making out like bandits, paying off their battery systems in just a couple of years and raking it in after that. This has to be cost the power company an arm and a leg. It seems like it just won't be sustainable.
    - jacquesm 4y ago
      No, it's not making the power companies money. It's perfectly sustainable, the only thing you need for this to work is the local interconnect. The power company should charge a marginal transmission fee, instead they are trying to take power at a fraction of the cost and then add their own profits. If I can roll out an extension cord to my neighbor rather than to sell my excess power to the grid and then have my neighbor buy it at 7 times my price then I'll do just that. The power company doesn't have an automatic right to a business model or profits.
- justapassenger 4y ago
  > Maybe the power company buys the batteries and the homeowner pays the install cost. It’d be extremely inefficient use of company resources. It’s much cheaper and reliable to build and maintain in centralized facilities.
  - jandrese 4y ago
    From what I've seen of grid tied battery systems this has not been the case. Install costs are substantial although the market has been pretty small thus far. I'm not an insider though, I can only go on official statements and watching what the industry actually does.
  - toomuchtodo 4y ago
    Evidently not. https://electrek.co/2022/08/22/small-vermont-utility-builds-fleet-4000-tesla-powerwalls/ https://electrek.co/2022/08/22/small-vermont-utility-builds-... https://electrek.co/2020/10/07/tesla-batteries-save-vermont-electricity-ratepayers-3-million/ https://electrek.co/2020/10/07/tesla-batteries-save-vermont-... https://greenmountainpower.com/rebates-programs/home-energy-storage/powerwall/ https://greenmountainpower.com/rebates-programs/home-energy-...
nathan_jr 4y ago
A flat rate based on size of main conn sounds reasonable; however, what is being discussed today in CA is an income based rate structure. https://timesofsandiego.com/business/2023/04/10/sdge-seeks-major-reform-of-residential-electric-rates-with-flat-rate-plan/ https://timesofsandiego.com/business/2023/04/10/sdge-seeks-m...

jandrese 4y ago

IMHO this is where the incentives are poorly aligned. The power companies should be offering incentives for people to install home battery systems but only if they are configured to act as a virtual peaker plant. IE the power company gets to decide when the battery is discharged to the grid. Maybe the power company buys the batteries and the homeowner pays the install cost. The homeowner gets a backup that works when the power is out, and the power company doesn't have to build and run expensive peaker plants and can further defer upgrading the backhaul lines. Total cost is higher than grid scale battery backup, but since the price is split it should be cheaper for the utility and also the grid scale battery storage doesn't help the backhaul problem. In the past the problem was that we simply were not making enough batteries so the market price was too high, but with battery production rapidly ramping up this should be practical if not now then within just a year or two.

deleted 4y ago
[deleted]
ec109685 4y ago
They can do that with pricing. E.g. when the grid most needs the power, price the surplus accordingly. I think NEM 3.0 has some provisions for that where power in the 4pm to 7pm block (or close to that) is bought back at a high rate.
- jandrese 4y ago
  I've seen stories of isolated pockets of California where they do this and the people on the program are making out like bandits, paying off their battery systems in just a couple of years and raking it in after that. This has to be cost the power company an arm and a leg. It seems like it just won't be sustainable.
  - jacquesm 4y ago
    No, it's not making the power companies money. It's perfectly sustainable, the only thing you need for this to work is the local interconnect. The power company should charge a marginal transmission fee, instead they are trying to take power at a fraction of the cost and then add their own profits. If I can roll out an extension cord to my neighbor rather than to sell my excess power to the grid and then have my neighbor buy it at 7 times my price then I'll do just that. The power company doesn't have an automatic right to a business model or profits.
justapassenger 4y ago
> Maybe the power company buys the batteries and the homeowner pays the install cost. It’d be extremely inefficient use of company resources. It’s much cheaper and reliable to build and maintain in centralized facilities.
- jandrese 4y ago
  From what I've seen of grid tied battery systems this has not been the case. Install costs are substantial although the market has been pretty small thus far. I'm not an insider though, I can only go on official statements and watching what the industry actually does.
- toomuchtodo 4y ago
  Evidently not. https://electrek.co/2022/08/22/small-vermont-utility-builds-fleet-4000-tesla-powerwalls/ https://electrek.co/2022/08/22/small-vermont-utility-builds-... https://electrek.co/2020/10/07/tesla-batteries-save-vermont-electricity-ratepayers-3-million/ https://electrek.co/2020/10/07/tesla-batteries-save-vermont-... https://greenmountainpower.com/rebates-programs/home-energy-storage/powerwall/ https://greenmountainpower.com/rebates-programs/home-energy-...

nathan_jr 4y ago

A flat rate based on size of main conn sounds reasonable; however, what is being discussed today in CA is an income based rate structure. https://timesofsandiego.com/business/2023/04/10/sdge-seeks-major-reform-of-residential-electric-rates-with-flat-rate-plan/ https://timesofsandiego.com/business/2023/04/10/sdge-seeks-m...