Tag Archives: energy

Dynamic electrical pricing demands dynamic price data.

The power industry has begun its long-anticipated shift towards demand-based pricing of electricity. Dominion Power, my electric company here in Virginia, has two basic rates: winter and summer. Although the math is a bit complicated, electricity costs about 50% more in the summer than in the winter, averaging 12¢ per kilowatt hour. (One can also pay for sustainably sourced energy, as I do, and this raises these rates by 1.3¢ per kilowatt hour.) While this price system is very simple, it is also bad, because it fails to respond to consumer demand or the realities of electrical generation.

Here’s an explanation of the problem and the proposed solution: open electrical rate data.

Excess Demand

On a very hot day—say, north of 100°F—everybody wants to keep their house at 72°. This requires a great deal of electricity, which means that Dominion has to generate a great deal of electricity. And that’s fine, because people are paying per kilowatt hour. If they want to pay $1 an hour to keep their house cool, that’s their prerogative. They pay, and Dominion uses the money to run their plants. But this all starts to fall apart when Dominion nears its maximum capacity.

As demand approaches capacity, Dominion is faced with a dilemma. Like most power companies, Dominion probably has a standby boiler in their coal-based power plants. This is not normally fired up, because it’s the oldest, polluting-ist boiler that they have. This boiler falls well below the modern standards of efficiency within state and federal regulations. Turning it on might increase by tenfold the power plant’s emissions of regulated pollutants, and guarantees that they’re going to be paying fines. At 10¢ per kilowatt hour, running their modern boilers is a profitable enterprise, but running the ancient, standby one is a money-losing endeavor.

In order to avoid brown-outs—demand exceeding capacity, resulting in insufficient amounts of power being delivered to customers—Dominion has to start up this nasty old boiler, even though they might only be needed to provide power to a few thousand customers. The incremental cost of serving these few customers is enormous, but necessary to keep the whole enterprise going.

Worse still, imagine if the temperature continues to climb. Demand spikes further. More power is needed than Dominion can generate or buy from other power companies (who are dealing with the same problem). Brown-outs or rolling blackouts are now impossible to avoid. Customers are angry. Dominion is losing money.

Dynamic Pricing Models

Enter dynamic—aka “demand-based”—pricing. There are two ways that dynamic pricing can work.

Dominion's summer rate plan.
Dominion’s summer rate plan.

The first dynamic pricing model is based on a schedule of rates relative to demand. This tells customers how much power costs on low-demand days versus high-demand days, with any number of gradients between the two. And within that daily rate difference, there are price changes throughout the day. A low-demand day might average around 9¢ per kilowatt hour, and a high-demand day might top out at 20, 30, even 50¢ per kilowatt hour. The advantage of this system is that it’s controlled and limited—people know what the possibilities are, and there’s a theoretical cap on how much power can cost. The disadvantage to this system is that there’s no way for customers to know how much collective demand exists. While Dominion understands that a high-capacity day is anything north of (say) 25,000 megawatts, customers have no way of knowing how high that collective demand is. This is an actual system that exists around the nation right now, and that Dominion allows customers to opt into.

The second dynamic pricing model is based on a real-time auction of electrical rates. For this approach to work, you’d tell your appliances how much you’re willing to pay to run them. You’ll pay no more than 35¢ to dry a load of laundry. You’ll pay no more than $2.50/day to keep your house cool, unless your house gets above 78°, in which case you’ll pay up to $5.00/day. Your water heater will keep water at 130°, unless power goes above 15¢ per kilowatt hour, in which case it will drop to 120°. And so on. Then your home power meter aggregates this data, and makes bids for power, bidding against every other customer. This works somewhat like eBay’s automatic bid system, and very much like Google Ads’ pricing model. Of course, this infrastructure does not exist yet, and so this is entirely in the realm of the imaginary. Still, I feel comfortable saying that this system is inevitable.

Returning to the reality of the first model—a published rate schedule—there’s a serious problem with information asymmetry. How is one to know the cost of electricity at any given time, if you don’t know if it’s a low-, medium-, or high-cost day? Dominion’s solution to this is both straightforward and complicated: they’ll e-mail you at 6 PM every day and tell you which of three rate structures that they’ll use the following day. Each rate structure changes over the course of the day, with different prices overnight, in the morning, through the bulk of the day, and in the evening.

But, wait, it gets harder. Dominion also institutes a “demand charge.” Every half hour, they sample how much power that you’re using at that moment. Then your monthly bill has a fee based on the largest amount of power that home was using at one of those sampled moments in the prior 30 days. If you used no power all month, except for one minute in which you used a very large amount of power, you would be billed a corresponding large amount, despite your near-zero average.

For customers, Dominion’s approach is dizzying. It requires that people keep track of electrical rates on a day-to-day and hour-to-hour basis, peak home power usage at all times, and provides nothing that would support the growing industry of home automation and energy saving devices, which could manage electrical use automatically. The popular Nest thermostat can be automatically reprogrammed via the internet. Apple recently announced an entire platform of home automation tools, controllable and configurable via iPhone, iPad, or desktop computer. Philips makes a light bulb kit that permits each bulb to be controlled remotely, the brightness and color of the bulbs configurable individually. There’s a whole ecosystem of hardware, software, and data to allow one’s home’s energy use to be adjusted in response to external factors. But what they can’t do is read Dominion’s e-mails at 6 PM every night. That’s an unbridgeable air gap, a failure on the part of Dominion that is perhaps mystifying or perhaps rational, depending on one’s level of cynicism.

Open Electrical Rate Data

There’s a simple solution to this: open electrical rate data. In addition to sending out an e-mail at 6 PM every day, Dominion could maintain a file on their server that provides machine-readable data about current and near-future power rates. It might look like this:

Right now, the closest that they get is a retrospective page, which has allotted space for the next day’s price (“Classification for tomorrow:”), but the page text ends with the colon—I’m yet to see that classification provided. [Hours after I published this, Dominion finally wrote something in that space, I assume prompted by the 90°F forecast.]

If this data was provided, it would be trivial to use it to enable home automation and energy management tools to schedule and control energy-intensive home services and appliances.

And, in fact, that’s a feature that Nest supports. The thermostat will dynamically adjust the temperature of a home during the highest-priced periods, generally very hot summer afternoons and very cold winter nights. But because precious few power companies provide the necessary data to support this feature, it’s not useful to most Nest customers. Nest doesn’t provide a comprehensive list of participating power companies, and after searching through their press releases and trying out a handful of ZIP codes from across the country in their form, I have to conclude it’s because there are very few participating power companies.

Publishing open electrical rate data is not difficult. If they can send out an e-mail, they can certainly update a JSON file. For a competent developer, it would be an afternoon project. A company that is capable of managing an entire electrical grid and the entire usage tracking and billing system that accompanies it is certainly capable of a tiny project like this.

I’ll warrant that Nest—which is owned by Google—is in a good position to establish a standard JSON schema for power companies to use. Some power companies would probably welcome being told what schema to use, giving them one fewer thing to worry about. Right now, it appears that Nest is basically taking any data that they can get. (It wouldn’t shock me to find out what they’re intercepting night-before e-mail alerts and using those to update thermostats with rate data.) Power companies are going to catch on to the enormous importance of rate data, and Nest has the first-mover advantage. I hope that Nest puts together an uncomplicated schema, advertises it on a developer page, encourages existing and new partners to publish in that schema, and eventually requires that participating power companies comply with their schema, assuming that they end up in a position where they can make such demands.

Open electrical rate data will provide real savings to consumers and utilities alike. It’s a necessary and inevitable development in power distribution and home automation. I hope that power companies and Nest take the simple steps necessary to usher in this era of open energy data, and soon.

ABC News: Expert—Wastewater Well in Ohio Triggered Quakes

There has been increasing concern over the past year that hydraulic fracturing (“fracking”) can cause earthquakes. I don’t understand the seismology well enough to understand the specifics, but the premise is simple enough: pumping millions of gallons of water, diesel, brine, and other liquids into the ground is liable to have an effect on the weight, shape, and distribution of land masses relative to fault lines, and could be the tipping point that causes a quake. Now a Columbia University seismologist investigating the unusual string of earthquakes in east Ohio over the past year has come to the conclusion that they were almost certainly caused by fracking. 

Are we really the Saudi Arabia of coal?

I keep hearing the U.S. described as the “Saudi Arabia of coal.” This turns out to be half true. According to BP, China produced three billion tons of coal in 2009, or 46% of the world’s share. In second place was the U.S., with .97 billion tons, 16% of the world’s share. But in proven reserves, according to the World Energy Council (an NGO), we lead with 23% of the world’s supply, followed by Russia (14%), China (13%), and Australia (9%).

Awkwardly, a lot of the U.S.’s supply of coal is under stuff—you know, cities, homes, schools, roads, etc.—rendering it functionally inaccessible. China manages to export more with fewer reserves because they’re communist—property can be seized at any time—and because they mine with little regard for human life, running the world’s deadliest mines, in which thousands of people die every year, an average of six people every day. I’m not sure that we want to compete with that.

Links for October 27th

  • The Guardian: Mexico City considers fixed-term marriage licences
    The city is considering offering two-year marriage licenses. Couples would get married, and two years later their marriage contract would end, though they could, of course, renew it. Why? Because so many marriages end after two years, requiring an expensive and trying divorce. I've been forecasting limited term marriage licenses for years, but I never would have guessed that it might start in the heavily Catholic Mexico.
  • CNet: Was legal site rewrite a liberal plot? Not quite.
    Justia made a mistake in a regular expression (I made the same mistake last week), resulting in some SCOTUS rulings going missing from their website. The conspiracy-theory responses are remarkable, especially the bizarre call for a criminal investigation. Justia is a private site—they're free to exclude any rulings for any (or no) reason!
  • Nest
    I am embarrassingly excited about this thermostat. I've put a lot of thought into thermostat design over the past few years, convinced that they could both look and function a great deal better than the best models currently available. (In my new home, we got top-flight ones installed, and they're still ugly and work poorly.) The Nest Learning Thermostat is quite a bit more advanced than anything I'd imagined. One more feature I'd like: the ability to detect the presence of people in the home based on whether their phone is on the WiFi network.

Calculating my home’s energy inputs and outputs.

I’ve been wondering what the inputs and outputs are of my home energy usage. For some months now, I’ve used a CurrentCost Envi to track my house’s energy usage, so I know the numbers in kilowatt hours: 8,166 kWh in the past 12 months, an average of 680 kWh/month, with a low of 454 kWh (September 2010) and a high of 1,180 kWh (January 2010). But what does that mean?

My power comes from approximately an equal mix of coal and nuclear, according to Dominion, my power company. Let’s start with coal.

Although not all coal is created equal, it basically takes one kilogram of coal to generate two kilowatt hours of electricity. Coal itself contains rather more power, but a lot is wasted as heat in the generation process, and still more is lost in the distribution process. Of my 8,166 kWh, about 4,093 kWh came from coal. That means that 4,511 pounds of coal were burned to power my home in the past year. The pollution side of coal is rather worse. Each unit of coal results in the emission of 2.93 times as much CO2 by weight (assuming 80% carbon coal), a result of carbon emissions bonding with oxygen. The coal burned to power my home, therefore, resulted in 13,217 pounds—six and a half tons—of CO2 to be emitted.

Nuclear is rather different, at least by weight. Uranium produces 360,000 kWh per kilogram, meaning that the 4,093 kWh of nuclear power for my home required 1.2 grams of uranium, which is approximately half of the weight of a penny, and slightly more than a paperclip. The amount of waste is similarly minute, in quantity. Uranium generates 3 milligrams of waste per kilowatt hour, or the size of a standard-issue snowflake. For my home’s usage in a year, that’s 12 grams of nuclear waste, the weight of two quarters. Of course, a straight comparison of uranium to coal by weight isn’t particularly meaningful.

None of this considers the mining or transport of that coal or uranium, the storage of the waste, etc. But I find it useful to know that powering my house for the last year required a over two tons of coal, a single gram of uranium, and produced north of six tons of CO2 and twelve grams of nuclear waste.

For the record, I participate in Dominion’s Green Power program, meaning that I pay 1.5¢ extra per kWh to offset 100% of my power use via renewable sources. But those very electrons don’t travel to my home—they just get mixed into the regional grid. So while I can feel good that I have prevented all of the enumerated energy sources and pollution from being used and emitted on my behalf, I’m not kidding myself—it’s 98% coal and nuclear power that’s coming into my home.

(Previously: “Rethinking Virginia’s energy infrastructure” and “Degree days and energy usage.”)

Links for May 5th

  • Snopes: Obama Lends $2 Billion to Brazilian Oil Company
    Heard the one about how the President Obama is spending billions on offshore drilling…in Brazil? Snopes rates it “mostly false.” This is another case of conservatives getting riled up about something that's not true and dates from President Bush's time in the White House.
  • ThinkProgress: Exxon Makes $30.5 Billion, So GOP Votes Unanimously To Give Them Tax Breaks
    All the Republicans and 7 Democrats in the House voted to block a bill that would cut $1.8B in annual subsidies to the oil industry. Republicans voted unanimously to keep them in March, too. Remember, kids: welfare is bad, unless it's going to the world's most profitable industry.
  • NASA: Results of Epic Space-Time Experiment
    I love theoretical physics. Albert Einstein came up with all of these ideas about how space and time should work, based solely on doing math on paper, and as science catches up with him, we keep finding that he's right. In this case, Einstein forecast that mass should curve spacetime. For instance, the mass of Earth should cause the very fabric of the universe to twist and warp around it. By launching some gyroscopes into space seven years ago—containing the most perfect spheres ever made—and observing how their spin drifts, it was observed that Einstein's calculations were spot-on. NASA's work on the project began 47 years ago, culminating in this magnificent confirmation of how the universe works.

Links for April 7th

Can your tap water do this?

As the keynote speaker at Gov. McDonnell’s energy conference yesterday, Hugh Pickens said fracking has no effect on drinking water:

Pickens played down growing fears about a particular method of extracting natural gas. Hydraulic fracturing, or fracking, uses a cocktail of water, sand and chemicals to break up rock to release gas deposits.

Some are fearful that fluids or wastewater from fracking could contaminate drinking water.

Pickens said the practice has been used in Texas and Oklahoma for decades with no adverse environmental consequences.

“What you’re hearing up here about damage to aquifers, I don’t believe it,” he said.


Denying a fact does not render it untrue.

Is it worth the risk to drill off Virginia’s coast?

This is a NASA satellite photo of the oil spill in the Gulf of Mexico:

As of this morning, the slick is 100 miles long and 45 miles wide. It’s twenty miles off the coast of Louisiana, and due to hit the shore this weekend. If this wasn’t enough of a disaster in the ocean, if this stuff washes up on shore, it’ll be a nightmare. It’s so bad that officials are considering lighting it on fire. That’s right—4,500 square miles of flaming oil slick is preferable to this stuff washing up, so nasty the consequences would be. It gets worse: the slick is growing, because although the offshore drilling platform exploded, burned, and collapsed beneath the waves (killing eleven), the oil is still gushing up from the ocean floor, through the twisted and broken pipe, and out into the surrounding water, at the rate of 42,000 gallons a day. BP said this afternoon that it’ll take months to stem the flow, though now they have a never-before-tested idea that they can float in an enormous dome and drop it down over the leak, and then drill another well to suck the oil out of to stop it from coming out of the busted on. They’ve got no idea if any of this stuff will work, but they’ve got to do it, because the alternative is admitting that the gulf coast is fucked. (Again.)

Fear not: there are ships working to clean up the spill. They’re in that satellite photo. But since each ship is significantly smaller than a pixel in size, relative to the image, you can imagine how much good they’re going to do. The task is Sisyphean.

Isn’t there some kind of a government safety system in place to prevent this from happening? Well, yes, but it’s purely voluntary. There’s a proposal to make it mandatory, but—as the WSJ points out—none of these rules would have prevented this from happening. Obviously, BP didn’t want to have their drilling platform explode—this represents an enormous economic loss to them. If the fourth largest business in the world can’t stop this from happening, then is it even possible to prevent this kind of an accident?

Never mind all that, though: Governor Bob McDonnell is a “drill here, drill now” kind of guy:

Bob McDonnell supports the safe offshore exploration and drilling for oil and natural gas 50 miles off the coast of Virginia. This is not only an issue of energy independence and national security, but the development of Virginia’s offshore energy reserves will mean thousands of new jobs, billions of dollars in new investment, and hundreds of millions in new tax revenue to the Commonwealth.

Like many Republican officeholders, he likes to say that drilling offshore is perfectly safe—technology solves all!—and that it’ll put lots of people to work. The latter, as we can see from the scramble underway in the gulf right now, is absolutely true. BP is about to put thousands of people to work building a giant dome, scrubbing down oil-slicked terns, and scrubbing crude off of a hundred miles of shoreline. Offshore oil is good for the economy in the same sense that me breaking my neck is good for the economy: think of all of the doctors, therapists, etc. who will be put to work! Whether there is such a thing as “safe” drilling for oil, though, remains to be seen.

The reality of offshore oil is that we have to pick: What’s worth more, our seaside economy or oil? Can you imagine the economic apocalypse in Virginia Beach that would result from their shoreline soaked in crude? In the Bay after fisheries are destroyed, and the remaining fish migrate out of the area? Offshore oil wells present a very real risk, and we are not well served by a faith-based attempt to balance these competing interests. We’ve got to do the math, figure out the real risk, and decide if we want to stake our marine economy on the safety of drilling off Virginia’s coast.