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How More Transparent Electricity Pricing Can Help Increase Clean Energy

A flat price for electricity fails to reflect the underlying costs or generating and delivering energy

The costs of generating electricityfrom large-scale power plants varies significantly over the course of a day. Shouldn't rate plans reflect that?
图片学分:Toru Watanbe /CC BY-SA 2.0/ Flickr

The price of most goods we purchase is generally based on the costs associated with the goods’ production, including the raw materials used to generate them, the labor associated with their manufacturing, and so on. However, when it comes to pricing residential electricity, many regulators choose to use a flat price per unit of electricity (kilowatt-hours, or kWh) that unfortunately fails to adequately reflect the underlying costs of generating and delivering energy to our homes.

This creates incorrect incentives for conservation and investments in distributed energy resources (like rooftop solar, energy storage, and demand response). Getting these incentives right can go a long way in creating more opportunity for efficiency and clean energy resources.

Pricing electricity generation

The cost of generating electricity from large-scale power plants varies significantly over the course of a day. When demand is low, electricity providers call upon the most efficient and inexpensive power plants to produce electricity. As demand increases, they also must utilize more inefficient and expensive power plants. So, for the price of generation to accurately reflect these costs, it, too, must vary with the time of day. Time-variant pricing charges customers more for using electricity during periods of high demand (such as during hot afternoons) and less when demand is not as great. This pricing system is an accurate reflection of generation costs.

相比之下,随着时间的推移不会变化的扁平费率激励客户在对他们最有价值时消耗更多的电力,即使在高需求期间消耗较大的耗材较大。因此,目前的静态定价系统会产生不正确的保护和电力使用的激励。

定价电力交付

At the other end of the system, we have the local delivery of electricity, which relies on infrastructure such as substations and distribution lines. To understand the challenges associated with pricing this part of the electricity system, a useful analogy can be found in bike share programs – such as Citibike in New York City.

These programs are made up of certain resources – a number of stations and bikes at different locations – that are difficult to increase in the short run even though demand for these bikes is shifting throughout the day, year, and location. Currently, customers usually pay a fixed fee for having access to bikes at any location and time. However, this way of pricing can cause problems: during peak times, increased demand from commuters reduces the availability of bikes at the most popular stations. Accurate pricing could alleviate this.

例如,客户可以在高峰期间使用自行车收取额外的费用,并且可能甚至在流行地点租用更多。这将减少对这些关键时报和位置对自行车的需求。我们可以将相同类型的逻辑推断到定价电力交付,从而在基础设施,因此,成本通常在短期内固定。然而,高需求可能导致限制,强迫公用事业替代紧张的基础设施或扩展系统,从长远来看,导致更大的成本。

Unfortunately, similar to the Citibike example, most customers pay only a flat fee per unit of electricity they use in order to pay for these infrastructure costs. This charge does not send the signal that high demand during peak times causes constraints and increased costs on the delivery system.

有不同的可能方法可以有效地恢复与输送系统相关的成本。一种选择是如上所述实现时间变型定价,其中递送系统的高峰时段的电力使用更昂贵。

用电高峰的指控

Another option is to use peak demand charges. These charges make it more expensive to use a lot of electricity simultaneously during certain high demand hours of the day (e.g., running your dishwasher, dryer, and TV all at once). This is because in doing so, you are demanding more from the electric grid at one time, increasing the need to expand the system over time.

It’s like timed lights for merging onto a freeway. If all the cars were to merge at once, there would be constant back up at high traffic times and locations, which could lead to a widening of the freeway on-ramp. Instead, the lights stagger the cars, lessening the traffic and the need for expensive construction. So, by giving customers an incentive to stagger their appliance use throughout the day, the maximum demand would be lower and grid planners could reduce the size of the system, saving money.

Utilities have not implemented peak demand charges in a widespread manner for residential customers, but they present a promising new price option when carefully and thoughtfully carried out.

有一个重要的警告。在采用这些工具的同时,可以对电网的积极影响,降低成本,监管机构和公用事业公司需要确保他们不损害低收入客户 - 那些已经比其他人承受较重的能量负担的人。研究表明解决方案,如时间变体定价适用于这些客户,但教育和技术支持对于成功至关重要。通过为人们提供有关这些工具的量身定制的信息和访问能够帮助他们利用它们的技术,他们可以在他们的月度账单上转移他们的能源使用并省钱。

Pricing environmental impacts

电费,更准确地反映the cost of generating and delivering electricity can help send the correct price signals to customers for conservation and distributed energy resource investments. But, something is still missing: how do we price the environmental costs of electricity production? These external costs (including greenhouse gas emissions, water consumption, and local air pollutants) can be quite large, and are currently not reflected in the price we pay for electricity.

产生功率的环境成本可以很高。如果公用设施自己支付这些费用,则清洁能源将变得更具吸引力。(照片:Danakwaterpenny通过Flickr)

Importantly, each unit of electricity has a different amount of external costs associated with it, depending on the efficiency and cleanliness of the power source. If each generator were responsible for paying the external costs, then cleaner, more efficient generators would pay less than their dirty counterparts, making clean electricity cheaper. This would have two impacts:

First, in a well-functioning market, the dirtier generators would have higher costs, and would therefore be utilized less, leading to a reduction in harmful pollution from these sources.

其次,因为这些价格将被客户传递给客户,电力在清洁时会更便宜。采用这些环境成本的时间变体定价可以促使客户在系统依赖脏功的一天中使用较少的能量。

通过确保发电机内化的这些成本,时变电价可以反映这些外部成本,帮助我们减少有害污染和对环境的其他负面影响。

当电力价格反映成本时,每个人都赢了

准确反映出电力的潜在内部和外部成本的电力定价会导致能源更好,更有效地利用能源,更具针对性的分布式能源资源投资,以及直接减少排放,导致所有的更清洁和更有效的电动系统。

Beia Spiller is a senior economist with the Environmental Defense Fund. Kristina Mohlin is an economist with the EDF. This blog post is part three in a four-part series that takes a deep dive into economics of the electric system and the role pricing can play in accelerating the clean energy economy. It originally appeared at the环保基金的网站

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