Electricity demand is less elastic than I'd thought.
ISCR's Competition & Regulation Times reports (pdf) on an experiment run by New Zealand power company Mercury Energy. Four hundred households were randomly assigned to four different treatment groups. One group received information about how to reduce electricity usage. The other three groups received the information plus a time-of-day price differential of on- and off-peak power use on weekdays: 4 cents, 10 cents or 20 cents: the experiment added half the differential to the household's existing on-peak price and subtracted half the differential from the off-peak price.
Results? There was no change in power use in summer, autumn and spring. In winter, the group experiencing the largest price differential shifted some power use to off-peak times: the 50% price premium on on-peak use resulted in a 6% decrease in on-peak usage and a 4.5% increase in off-peak use.
I was pretty surprised that demand was this inelastic. The article notes that Mercury didn't use time-of-use pricing with any of its customers prior to the experiment. When we moved to New Zealand, we signed up with Meridian Energy and took its Night-and-Day rate plan; we then shifted our laundry, dishwasher, and hot water heating to the lower night-rate. Current daytime power prices with Meridian on the DayNight plan are just about three times the night rate: $0.3072 per kWh daytime and $0.1180 per kWh at night. After the kids showed up, we stopped turning the hot water cylinder off during the daytime.
We're now with PowerShop which, while not charging an explicit time-of-day price, conditions your average price on your day/night/weekend usage patterns; we've kept our "shift to the evening" strategy. PowerShop's underlying daytime power rate, when I'd enquired back in May, was about double the price of their night-time rate.
The Mercury experiment suggests that larger roll-out of time-of-use dependent pricing can shave some peaks off peak power use, and knocking back those peaks can be pretty important. But I had expected time-of-day power usage to be more price sensitive.
It takes time to shift usage to night as it means either a big change in habits or an investment in technology. It's easy enough to put cheap timers on dishwashers and clothes driers, but the water cylinder is not so easy as it's wired in.
ReplyDeleteI built an Arduino-based smart thermostat to control my 2400W oil column heater and dehumidifier and let me set different temperatures at different times of the day, including boosting the temperature for a couple of hours before daytime rates start at 7 AM. However the number of people with the skills to do that is small, you can't buy such things off the shelf, and the programming and scheduling ability on heatpumps seems to be woefully inadequate.
I've managed to shift my use from 30% night to about 50% in the winter months, a brief period of 60% night use in spring/autumn when space heating is needed at night but not in the daytime.
In summer, I don't seem to be able to do better than 40% night. Overall use is about a quarter of what it is in winter and the fixed 24/7 loads of fridge/freezer & computers dominate. Water heating helps bias it towards night, but home cooked meals brings it back again. I can get 50% night use in summer if I eat takeaways, but that defeats any financial purpose :P
I find it quite shocking the number of people I see reporting their electricity prices in the 25c - 30c per kWh range because they have an "anytime" single rate. My average unit prices on PowerShop (including lines charges (which make up approx 4c/kWh) and GST) have been:
2010:18.33 (on 9418 units)
2011: 18.87 (on 9716 units)
2012: 18.92 (on 9728 units)
I think that's not bad considering that there have been considerable increases in the raw prices over that time (including a GST increase).
Interesting result for the overall population. Our usage is consistently 50% night rates during the last 3 years at least (hot water cylinder, washing and part of heating hooked to night rates). We are with PowerShop and annual averages for unit prices have been 15.7 (2010), 17.3 (2011) and 18.3 (2012). We haven't been able to shift anything significant towards weekends though.
ReplyDeleteThat's awesome; I envy you those skills. I'd love to figure out how to do that.
ReplyDeleteOur average price so far this year is $0.1975 on 16800 units so far this year - three heat pumps aiming at North American indoor temperatures in the winter, complemented by log burner on cold days. 26% weekday days, 43% night, 31% weekend day.
The thermostat timers on our Panasonics seem pretty stupid; I'd love to be able to upgrade them. In the winter we set them to run 5 PM to 8 AM, but the temperature setting that heats the house adequately on a cold day blows too much hot air on a warmer day. I'd love to rig it with a smarter controller using a temperature sensor set elsewhere in the room and with day-of-week programmable settings. I'd also love to figure out how to set up a controller for the pump on our pool so that on warm summer days, it would run water up to the solar pipes on the roof and then shut itself off when the temperature differential between intake and outflow got small enough. I currently run it on a dumb timer and just turn on the switch in the morning for it to run a couple hours in the afternoon if it looks like it'll be a warm day.
Almost all our laundry is done on weekends (and nights).
ReplyDeleteIn my native Lithuania, after we kicked out russians and their military, we had bit of an energy crisis. Our only pipelines were coming in from the former occupiers, so once they were out, so was our gas and oil. We had couple of hydros and one nuclear plant. So country shifted to on and off-peak pricing. I recall off-peak was 50% the peak pricing. Took less than a year for whole country to shift usage patterns.
ReplyDeleteYes, you had to pay for your own new meter or you were charged peak rate 24X7. Electricians were sure busy.
Most of this is doable with the right units.
ReplyDeleteOur Daikin reverse cycle lets me set 4 different temperatures/on/off states per day, 7 days a week. Stupidly hard to program because everything involves pressing 2 buttons simultaneously in non-intuitive combinations, but once set it works well.
The solar pool heater I had in Sydney 8 years ago ran off temperature differentials, and also was smart enough to pump water onto the roof at night to cool the pool (a feature a NZer like me had never considered anyone might need).
On time of day, feels to me like a deal that would work is:
1. Some base stuff on steady state - lights and the like
2. Some other stuff connected to real market rates - so 5 minute pricing blocks, and spikes that could be as much as 400% of the steady state price (and lows that could be 5-10% of steady state price). And devices that are smart enough to deal with that - my fridge can turn off for 30 minutes without impact, my air con for 2 hours, etc etc
There is a very good 110/220-240 control unit I use on my electric water heater - GE 15207. I analyzed when we use water the most and just turn it on hour before. All lights are CFL. Stopped using storage and other servers at home and moved everything into cloud servers (Amazon, Google, Dropbox). Also used Kill-A-Watt Electricity Usage Monitor (there is an international version) and I know what each device costs me per month. Result: 50% lower bill.
ReplyDeleteWe'll be flipping to gas-powered hot water when the earthquake work gets done on our house. We've been replacing light bulbs with small halogens. Internet here is too slow and expensive to rely on cloud servers.
ReplyDeleteAre CFL and LED bulbs not that popular in NZ? I don't think I own a single halogen light.
ReplyDeleteAlso, what is the upload speed you usually get in NZ? Most home cable and DSL connections in US get 750K. You can get 5MB and up, but you have to be in a metro area where there is competition between cable providers.
LEDs here are still pretty crazily expensive, but you can get them imported from Singapore. I need to start doing that. The ones I have been using are xenon capsules that plug into a fixed base, so you just replace the capsule part when one burns out. I just don't like the CFLs; they take too long to warm up.
ReplyDeleteInternet speeds here are constrained by the pipes that go across to the rest of the world. I connect to the cabinet at 18 MB down, 1 MB up. I get 15MB within NZ. Speeds to North America vary widely. I typically get 2 MB download from the States. Today I'm getting 5MB to San Fran and 14 MB to Winnipeg (have never ever seen it this fast).
NZs internet is pretty good. Here's my speedtest result to Sydney (from Christchurch). Most of the problems that people encounter with international traffic is not an infrastructure problem but actually their ISP just not renting enough international bandwidth.
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