Free Electric Power

By tchenwa | Published: November 13, 2015 – 1:39 pm

The New York Times published an article recently on how TXU Energy (Dallas/ Fort Worth, Texas) is offering their customers free electricity during certain times of the day. A little background may be helpful. There are three electrical grids that cover the mainland United States, essentially East coast, West coast and Texas. Several years ago, the Texas electrical power market was split into generation, transmission and distribution. The intent was to encourage competition at the generation level and distribution level where the electric power is used. According to the article, the abundance of wind electric power generation has resulted in a surplus of power in the evening. The TXU strategy is to train their customers to shift their variable loads to the evening hours, hopefully reducing the peak energy loads during the day. The article interviews several residential customers who shift their washing machine and dish washer use to the evenings. All of this is made possible by the implementation of the industry term Smart Grid. Intelligent electric meters that can transmit and receive user level data make this time-of-day rate application possible. Is this the killer app that will help to justify the internet of everything? I wonder if this program is available to large industrial users? A night shift from 9:00pm to 5:00am might be very cost efficient. New York Times article: “A Texas Utility Offers a Nighttime Special: Free Electricity”, Clifford Krauss, Diana Cardwell. TC

Electric Power Generation Business Model – Part 1

By tchenwa | Published: June 3, 2015 – 8:21 am

In the 1990’s the trend was to break-up the electric utility monopolies into separate Generation, Transmission and Distribution businesses. The intent was to open up the electric power generation side of the business to more market oriented competition with the hope of lowering prices for electricity at the wholesale and retail level Two trends have evolved in the intervening years to disrupt this neat solution. • The increase domestic (USA) production of oil and natural gas plus other global factors has resulted in the significant reduction over the last year in the price of oil and natural gas. • The significant increase in solar panel electric power generation by consumers has shifted more power generation to the Distribution level. So why is the decrease in global oil and natural gas prices not a completely good thing for everyone? Certainly, those customers that are highly dependent upon electricity generated by oil and natural gas fired generators should benefit. Customers in my family home of Hawaii where oil electric power generators predominate, should see significant savings. The issue is different in parts of the USA that are dependent upon nuclear power plants for the majority of their electric power generation base. The current merchant wholesale rates for electric power generated by nuclear power plants is at a level that makes some of these generators uneconomical. Representing a huge capital investment, requiring years to build, these plants cannot be easily or quickly be added to the power generation mix. Their importance as an electric power generator at stable and predictable rates cannot be over stated. In addition, this type of electric power generation is significantly cleaner if “greenhouse gas emissions” and global warming are a consideration. I recently read an article which discussed the application of a nuclear power plant operator to the utility regulatory agency for financial relief. Their argument is that electric power generation mix needs a source of stable generation at predictable rates to form the base. Coal fired plants have been historically provided the foundation of electric power generation, however, their undesirable environmental impact should see the reduction in usage over time. In general, oil and natural gas generators are very appropriate for time of day and peak load requirements. What is the appropriate mix? Each power generation option has favorable and unfavorable features. Just a few months ago when the price of oil was around US$100 per barrel, nuclear power plants look very good economically (ignoring radioactive fuel disposal). We read every day about coal as a fuel and the undesirable impact on the environment. Oil and natural gas have better environmental impact, but what if we include what it takes to get it out of the ground!? Thrown into the generation mix is the power generation at the Distribution level through solar cell installations. Disruptive environment for both the power generation businesses and their governmental regulators. TC

Solar Arrays as Distributed Power Generators

By tchenwa | Published: February 19, 2015 – 2:56 pm

I have noticed several trends in the electric power market which I find very intriguing. The first is the development of distributed power generation. I am not referring to the growth of the large merchant power generators, but the growth of the individual residential power generators. My sister and brother-in-law live in Hawaii. They installed a solar cell array on their home. The solar cell array generates surplus electric power during the day, resulting in negative metering during the day. During the evening and at night the house draws power from the Hawaii Electric power distribution grid. The arrangement with Hawaii Electric is that the electric power that is distributed into the Hawaii Electric grid is applied as a credit up to the amount drawn from the grid during the periods that the solar cell array is not generating electric power. Assuming that the solar cell array has been sized to generate excess electric power over and above the peak daytime power requirements, Hawaii Electric is receiving essentially “free” electric power during the solar power generating period. I would guess that the kilowatt hour rate for electric power from Hawaii Electric is among the highest in the nation. The return on investment for the residential installation is probably very attractive. This arrangement leads to some interesting questions regarding the future of electric power distribution by electric utilities. Since Hawaii has minimal heavy industry (the exception being the various military bases), the peak requirements for electric power would be typically in the early morning and evening/ night when residential usage peaks. Does this match the distributed power generators anticipated contribution to the grid? Should electric power storage be added to residential distributed generation sites minimizing the electric power draw from the grid, does it make sense to charge the electric power billing method to a basic “connection to the grid” fee plus usage per kilo watt hour rate? How does Hawaii Electric manage the large numbers of distributed electric power generator sites adding power to their distribution grid (low voltage) versus the transmission grid (high voltage) designed for this purpose? TC

Electric Energy Monitoring:

By tchenwa | Published: November 20, 2012 – 2:40 pm

Our business has experienced a dramatic increase in requirements for the precision electric power measurement sensors used to measure electric power at the household and small commercial level. These sensors are incorporated into energy monitoring systems designed specifically for these markets. The energy monitoring systems typically consist of a local data gathering module, a communication link via the internet to transmit the electric power measurement data and an online display of the electric power data through a personal web page. I imagine that the advantage to the typical homeowner is the identification of phantom power loads, vampire power drains and seriously defective equipment. These would appear to be one-time investigations unless the home is in a location with extreme energy rates (e.g. Hawaii, Alaska …), the owner is a “data freak”, the owner is a serious “green” advocate and/ or the local electric power distribution utility offers “time of day” pricing. Time of day pricing is congestion pricing. A higher KWH rate is charged when demand is high. Lower rates are in effect when the demand is low (typically the middle of the night). After the initial investigations and remedial actions, a monthly savings on the order of a low double digit percentage would seem reasonable due to the owners increased consciousness of electric power use. If the home owner has access to “time of day” priced electric power service, then significantly higher savings can be realized through judicious programming of the electric power usage to take advantage of the lower rate periods. On the other hand, small commercial establishments with monthly electric bills in the thousands of dollars, a low double digit monthly savings can quickly become serious money. If the system offers “control functions” (the ability to send a command back to the local data gathering module and initiate turn on/ turn off function), then equipment adjustments could be made remotely through an internet enabled computer, tablet, smart phone. ABC News Report: Time of Day Pricing and Energy Monitoring Green Tech Today 16: Powerhouse Dynamics TC