4 ms·

Because infrastructure can handle a finite number of users based on their connection types. If you’re running a 50kW kiln (or more realistically 4 x 12kW) in y

by Retric 3y ago

Because infrastructure can handle a finite number of users based on their connection types. If you’re running a 50kW kiln (or more realistically 4 x 12kW) in your back yard then your annual use may not be that high but the grid needs to handle larger demand spikes. Paying per kWh alone doesn’t adjust for the relevant infrastructure.

s1artibartfast 3y ago
So your argument is that it is a proxy for use variability, and that determines how much the grid needs to be overbuilt. I'm not sure that either of those are solid assumptions,but worth some thought.
floatrock 3y ago
Demand charges (peak kW rather than kWh) are very common in commercial and industrial. It's very rare a residential house has a 50kW kiln, so those kinds of spikey loads basically balance out over a subdivision. Although interestingly, an unintended side-effect of aggressive time-of-use pricing is the entire subdivision has programmed their air conditioners or EV chargers to turn back on right at 9pm when peak pricing ends. That kind of unintended mass-coordination DOES create sometimes-problematic high demand spikes.
- mcbishop 3y ago
  Ultimately, there's a need for customer-specific real-time pricing that's responded to by behind-the-meter "power control systems"... managing flexible loads, in a way that doesn't negatively affect occupants.
AnthonyMouse 3y ago
> If you’re running a 50kW kiln (or more realistically 4 x 12kW) in your back yard then your annual use may not be that high but the grid needs to handle larger demand spikes. Paying per kWh alone doesn’t adjust for the relevant infrastructure. There are two alternatives here. One is that your spiky demand doesn't correlate with others, in which case it's irrelevant because although 50kW is a lot for one house it's really not a big deal for the power grid. The other is that it does correlate with other spiky demand, at which point you charge everyone a higher price per kWh at those times.
- Retric 3y ago
  Charging based on regional demand works great on the production side, but residential, industrial, and commercial experiences different peak times. Thus distribution demand at the level of substations don’t necessarily correlate well. You could model things with individual per customer rates per minute, but charging based on connection sizes is a lot simpler.
  - s1artibartfast 3y ago
    It isn't clear that connection size is correlated with any production costs whatsoever, and if it is, what the degree of that cost is. If the goal is simply to gouge customers, independent of use or cost, you might as well charge by height.
    - Retric 3y ago
      Distribution costs and production costs are different things. The grid itself needs to be paid for as does electricity production. A random neighborhood that wants a huge number of Christmas lights isn’t an issue from the production side, but it can be a real issue in terms of distribution without using enough kWh to pay for that infrastructure.

by Retric 3y ago

s1artibartfast 3y ago

So your argument is that it is a proxy for use variability, and that determines how much the grid needs to be overbuilt. I'm not sure that either of those are solid assumptions,but worth some thought.

floatrock 3y ago

Demand charges (peak kW rather than kWh) are very common in commercial and industrial. It's very rare a residential house has a 50kW kiln, so those kinds of spikey loads basically balance out over a subdivision. Although interestingly, an unintended side-effect of aggressive time-of-use pricing is the entire subdivision has programmed their air conditioners or EV chargers to turn back on right at 9pm when peak pricing ends. That kind of unintended mass-coordination DOES create sometimes-problematic high demand spikes.

mcbishop 3y ago
Ultimately, there's a need for customer-specific real-time pricing that's responded to by behind-the-meter "power control systems"... managing flexible loads, in a way that doesn't negatively affect occupants.

AnthonyMouse 3y ago

> If you’re running a 50kW kiln (or more realistically 4 x 12kW) in your back yard then your annual use may not be that high but the grid needs to handle larger demand spikes. Paying per kWh alone doesn’t adjust for the relevant infrastructure. There are two alternatives here. One is that your spiky demand doesn't correlate with others, in which case it's irrelevant because although 50kW is a lot for one house it's really not a big deal for the power grid. The other is that it does correlate with other spiky demand, at which point you charge everyone a higher price per kWh at those times.

Retric 3y ago
Charging based on regional demand works great on the production side, but residential, industrial, and commercial experiences different peak times. Thus distribution demand at the level of substations don’t necessarily correlate well. You could model things with individual per customer rates per minute, but charging based on connection sizes is a lot simpler.
- s1artibartfast 3y ago
  It isn't clear that connection size is correlated with any production costs whatsoever, and if it is, what the degree of that cost is. If the goal is simply to gouge customers, independent of use or cost, you might as well charge by height.
  - Retric 3y ago
    Distribution costs and production costs are different things. The grid itself needs to be paid for as does electricity production. A random neighborhood that wants a huge number of Christmas lights isn’t an issue from the production side, but it can be a real issue in terms of distribution without using enough kWh to pay for that infrastructure.