Smart Grid Proof?

[Mike O'Dell]

Yes Bob, I've heard that story more than a few times
the last several years from companies trying to raise
investment dollars.

What you reference is called "demand response control."

	On 5/2/10 3:06 PM, Bob Bruninga wrote:

	The cost of electricity varies over 10-to-20 to 1
	based on instantaneous supply and demand.


Unfortunately, if you do the diligence, and you are talking
about residential usage, you discover that while it is true
in some absolute sense, it's not true very often,
certainly not as often as they'd like you to believe,
nor can it impact usage very much. Large commercial users
can indeed help manage demand, and the ones that make
the most difference are already doing it.

This is the same game played by health insurance companies who insist on
breaking pools down into the smallest groups they can get away with
because this subverts The Fundamental Theorem of Insurance. by breaking 
consumption down into small period, rather than averaging over a
large window, you can maximize the variance and then argue to stupid
regulators that This Is Very Bad, and in turn, charge exponentially.
so from a residential point of view, this is about revenue enhancement
while given you warm fuzzies that you are Doing Something Good
by paying more for the same thing.

The other important point is that it's been shown several times now
that *NO* instrumentation is needed to impact residential consumption.
it's easy to find the large residential consumers based on neighborhood
demographics, and it turns out that if they simply include a page in
the bill that shows how your household does relative to other households
"like yours", especially in your neighborhood, people go to all the
obvious things and they get within 10-15% of the maximum difference
they could make (with perfect knowledge, smart appliances, etc, etc)
with no other information.

Lemme repeat this: they can do almost EVERYTHING that can be done
for residential consumption without doing ANYTHING except installing
some additional billing software, or easier, buying the data mining
service from one of several companies offering it as a service.

It is absolutely true that having to buy power on the spot market
is very painful for system operators, but how often they have to
do that is an important issue, and with rare exceptions i could
discuss at length if you really have trouble getting to sleep,
they don't have to do it that much. (They'd go broke if they did.)
And when they DO have to do it, residential demand response control 
can't really do much good.

so while this all sounds great in theory, as my friend says:

the difference between theory and practice in theory
is great than
the difference between theory and practice in practice

we can certainly discuss this further,
but it requires fortifying beverages. (grin)

	-mo



  	

-- 
"Of course it's hard!
If it was easy, we'd be buying it from somebody else!"