4 ms·

The cynic in me has to ask: what does PG&E stand to gain from making houses more energy-efficient?

by yen223 14y ago

j-g-faustus 14y ago
They can claim that they take the environment seriously. Of course, if they are successful in reducing overall energy consumption, they will increase the cost of energy to cover their costs and maintain their profit margin.
whatusername 14y ago
Not sure about the US energy market -- but here in Aus -- the profit is in the baseload kilowatts and not in the peaks. Your cheap Coal plant can produce electricity really cheaply - but when demand spikes you need to fire up the higher cost on-demand generators. You can still sell this electricity - but you may even make a loss on it at the margins.
- curiousdannii 14y ago
  In fact, one quarter of electricity bills goes to 40 hours of peak demand per year! http://theconversation.edu.au/air-conditioning-is-peaking-out-time-to-rethink-cool-comfort-10598 http://theconversation.edu.au/air-conditioning-is-peaking-ou...
  - yen223 14y ago
    Having stayed in Melbourne for a while, I am honestly not surprised. Melbourne's climate is normally rather mild, but their short summer periods are brutal.
eidorb 14y ago
The network is built to cope with a peak demand that only occurs for a relatively small amount of time. By reducing the peak demand they can delay the capital expenditure of upgrading the network a number of years.
sutterbomb 14y ago
In many states in the US, there are energy targets that must be met or the provider is subject to penalties. Opower is a startup who's entire business model (at least to start) was to work with utilities on hitting these targets. I could be wrong, but I think they were actually the first to use this peer comparison model in this space.
- davetron5000 14y ago
  sutterbomb's post is 100% correct. Energy companies are often under strong regulator pressure to reduce consumption or to reduce consumption of specific fuel types (e.g. coal). Compared to wind or solar, a voluntary reduction in use by customers is a much more cost-effective means of meeting such regulations.

The cynic in me has to ask: what does PG&E stand to gain from making houses more energy-efficient?

by yen223 14y ago

The cynic in me has to ask: what does PG&E stand to gain from making houses more energy-efficient?

They can claim that they take the environment seriously. Of course, if they are successful in reducing overall energy consumption, they will increase the cost of energy to cover their costs and maintain their profit margin.

whatusername 14y ago

Not sure about the US energy market -- but here in Aus -- the profit is in the baseload kilowatts and not in the peaks. Your cheap Coal plant can produce electricity really cheaply - but when demand spikes you need to fire up the higher cost on-demand generators. You can still sell this electricity - but you may even make a loss on it at the margins.

curiousdannii 14y ago
In fact, one quarter of electricity bills goes to 40 hours of peak demand per year! http://theconversation.edu.au/air-conditioning-is-peaking-out-time-to-rethink-cool-comfort-10598 http://theconversation.edu.au/air-conditioning-is-peaking-ou...
- yen223 14y ago
  Having stayed in Melbourne for a while, I am honestly not surprised. Melbourne's climate is normally rather mild, but their short summer periods are brutal.

eidorb 14y ago

The network is built to cope with a peak demand that only occurs for a relatively small amount of time. By reducing the peak demand they can delay the capital expenditure of upgrading the network a number of years.

sutterbomb 14y ago

In many states in the US, there are energy targets that must be met or the provider is subject to penalties. Opower is a startup who's entire business model (at least to start) was to work with utilities on hitting these targets. I could be wrong, but I think they were actually the first to use this peer comparison model in this space.

davetron5000 14y ago
sutterbomb's post is 100% correct. Energy companies are often under strong regulator pressure to reduce consumption or to reduce consumption of specific fuel types (e.g. coal). Compared to wind or solar, a voluntary reduction in use by customers is a much more cost-effective means of meeting such regulations.