It has been a few weeks since I last posted to this blog. That is largely due to the fact that I recently secured full time employment again and so I have had many other commitments. My new job is not in the Smart Grid or energy field but there is a green technology angle to it. I am working at a VC funded technology firm in Chicago called Cleversafe (www.cleversafe.com). Cleversafe has developed a new data storage technology based on information dispersal algorithms that offers the promise of increased availability and reliability of data storage with lower overall cost. In comparison to RAID 6 storage with replication, Cleversafe’s technology can reduce the amount of physical storage capacity required by up to 60% and, as a result, cut costs for power and cooling by that amount too.
In this column, I want to return to the subject of real time pricing in Chicago which I have discussed in a couple of earlier columns. A colleague from the Green Technology Organization of Greater Chicago has recently switched over to real time pricing offered by Commonwealth Edison and, in anticipation of that event, he has been collecting data on the real time pricing rates over a period of almost 3 months from July through September. The data represent 55 days during that period and, although some days’ data sets are incomplete, it presents a pretty good picture of the real time rates during a period that included some very hot weather and some relatively mild weather. Daily peak prices ranged from less than 3c/KWh to over 23c/KWh. Daily averages ranged from around 3c/KWh to 8c/KWh. The standard fixed rate offered by ComEd is 7c/KWh.
To fully appreciate the impact of these rates, it is necessary to consider them in the context of an actual usage profile. To do this, I created three hypothetical profiles as follows:
- A standard profile representing a fairly typical household in which usage peaks in the morning as people get up to go to work or school and again in the early afternoon through the evening hours when people return home.
- A profile representing a homebound person in which usage remains relatively constant all day.
- A peak shifted profile representing a modest amount of demand being shifted out of peak hours into the nighttime hours when rates are lower.
All three profiles aggregate to a daily usage of 35 KWh which is consistent with the average residential electric bill of around 1,000 KWh per month.
Using these three profiles, I then modeled the actual cost based on the fixed rate of 7c/KWh, a sample day from the period where energy rates remained very low, a sample day where energy rates peaked very high and an average of the real time pricing across all 55 samples in the dataset. The table below illustrates the results of this analysis. With no peak shifting, a typical consumer can reduce their average monthly energy costs by 34%. With demand response, the reduction can be increased to 43%. Interestingly, the incremental savings from shifting peak demand are not all that significant and this seems to bear out the concerns that many observers have raised about the value of demand response programs for residential consumers. However, the other interesting thing to note here is that even for those whose usage profiles remain relatively constant throughout the day, such as the homebound or the elderly, there appears to be a significant cost saving associated with moving to the real time rate.
|Model||Daily Cost||Monthly Cost||Saving|
|Standard Fixed Rate||$2.45||$73.5||–|
|Standard Low Cost||$1.16||–||–|
|Standard High Cost||$2.92||–||–|
|Stay at Home Fixed Rate||$2.45||$73.50||–|
|Stay at Home Low Cost||$1.21||–||–|
|Stay at Home High Cost||$3.17||–||–|
|Stay at Home Average||$1.63||$48.94||33%|
|Peak Shifted Fixed Rate||$2.45||$73.50||–|
|Peak Shifted Low Cost||$1.02||–||–|
|Peak Shifted High Cost||$2.37||–||–|
|Peak Shifted Average||$1.40||$42.02||43%|
Note however that this analysis only looks at the actual energy charges. I have looked on the ComEd site for comparative details of the various charges that are added to the bill on each of these rate plans and I have not been able to find any data on this. I believe there is an additional charge for the smart meter that is required to enable real time billing. This charge would reclaim some of the cost savings associated with the real time rates. There may well be other charges that reclaim even more of those savings. I will provide an update on this analysis once I can find the additional data on the non-usage related charges.