Negative Energy

I have sighted a new urban myth: Electric heating is cheaper than oil heat! Here in Boston people heat with both gas and oil, and the cost per unit of heat between the two has diverged rapidly over the last few years. Those who heat with oil are looking for ways out of their plight. Apparently the rumor making the rounds that it is cheaper to use electric. That’s not true.

In related news Martin  brings my attention to a company EnerNoc that sells negative energy, i.e. load shedding, to the utilities. They use telecom and widgets to shift power consumption from high demand time periods into low demand time periods. Martian’s example is the fridge. You chill when power is plentiful and let it coast when others are paying higher prices.

I assume that EnerNoc’s role in all this is to aggregate small power users into a large enough pool to be worthy of selling to the utilities. It’s a interesting example of a coordination problem. There are of course other ways to approach the problem; ones that are less dependent on a thicket of contracts and ongoing coordination signals controlled by a middleman and enabled, as Martian, points out by the telecom infrastructure.

The obvious alternative is to just broadcast signal; and let the demand side react to the signal by selling some simple technology that responds to the signal in reasonably simple ways. That alone would enable substantial contributions from the demand side. But you can improve the incentive structure either thru regulation or by using statistical sampling to tell which customers have gotten with program; and then reduce their tariffs.

The amount of signal that needs to flow from the grid operators to the consumers is small, in the sense that you can broadcast it. A signal only needs to flow back the other way sufficient to assure that the incentives play out right. It is stupid to presume that the only incentives that are available are monetary or that they need to be executed with fastidious accounting. Most social systems have very fuzzy accounting and they work just fine, thank you!

The puzzle to be solved here is how to draw more of the peripheral demand into a load balancing system. Reading about EnerNoc’s approach isn’t the first time I’ve seen discussion of this. For example Bruce Schneier mentioned a regulatory attempt at something similar. I liked that one a lot, it provided a way to signal household thermostats. He was concerned that the resulting system would attract hackers. I presume he’d be just as sanguine about the security of the EnerNoc system; probably more so since it’s a closed system.

Such concerns are appropriate, but for heaven sakes I wish smart people like Bruce would stop pretending that these cases are somehow unique. It is the very rare large scale system that doesn’t have vunerable choke points. Hubs who’s failure can bring the entire system to it’s knees. Telling designers not to build large systems because of those risks is lame. Helping them know how to build them so they are safe and robust is hard, yes. But these systems get built because they generate mind boggling amounts of value. So it’s better to do the hard job and forgo the short term pleasure of a bit of hysteria.

Speaking of load shedding: turning your car’s engine off when you stop is more efficient than you thought.

4 thoughts on “Negative Energy

  1. Anton Tagunov

    Hi! How about a diffirentiated tariff? Cheap at night, expenisive in day time? Or even varied by hour?

    Sure you’d need to know how much electricity has been consumed in each hour but then you have a very straightforward economic incentive for users to install these smart fridges. It could even be dynamic – like the cheap hours would vary day to day.

  2. bhyde

    Different tarrifs are actually common. The trick is metering. That in turn in the installed base problem. Replacing a lot of meters is expensive. Curiously the utilities around here replaced a lot of meters a few years back. Their reason was to eliminate the labor of meter readers. They now read them by driving by in a van. Missed opportunity? Maybe the meter software can be upgraded.

    Some utilities use that tarriff for home heating; you sink a lot of heat into something over night and then keep the house warm during prime hours.

    Part of the load balancing puzzle is exactly how fine grain the response can be. This is all complementary with the energy storage problem. For example fly wheels are used for energy storage scenarios where the time constants are particularly short. Keeping the current in phase, or absorbing/releasing bursts from electric trains starting and stopping – that kind of thing. So there is another aspect beyond the signaling one I was focused on above.

  3. Rebecca

    re large scale systems with choke points. I read we’d be better off if we had a lot of small electric generation/power plants spread around more, that then the electric system would be more resilient. Not true?

    Someone in town put in solar panels on his shed’s roof. He’s generating much more than he needs these days and it gets put back into the grid. Next March the utility does an accounting for the year and they’ll pay him for any excess, but at a very low wholesale rate. So he figures on installing space heaters and using up all the excess come winter.

  4. Ben Hyde

    Rebecca – Yes distributed generation can help with resiliency; but it might not be cheaper. There are advantages to scale, and coordination problems in highly distributed systems. For example at very high frequency, those generators have to be exactly on beat with the 60Hz signal. At a more grainy level all those machines have to be kept running and it ends up being a chore that it’s a lot cheaper to centralize. All that said; as the cost of feed stocks rise a lot more generation at the edge is going make more and more sense. I find it amazinly how all those falling water power sources used before coal and electricity are going to waste; I assume we will see a lot of small hydro soon.

    Some places have regulated the price for power fed back into the grid to make it more equitable and to encourage more build out. As it stands it’s mostly an irritant for the power company; but with enough of it going on it might begin to be useful. Meanwhile it’s a bit round about to heat with solar via solar panels; but I’m not surprised that it might still have beter payback than selling it to the power company. I wonder what he could do with the extra during the summer; must be something?

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