|Seasonal wholesale electricity hourly average rates: yearly average (blue), peak summer time average (red), off-peak months average (green).|
Let’s think for a moment about electrical energy as a commodity. Generally, commodities that are easily stored have a fairly stable price, while items like fresh fruit have wide price swings with seasonal changes in supply and demand. Electrical energy is very hard to store, and the demand for energy varies over both the seasons and the time of day, as shown in the figure above. On the supply side, power plants may be down for maintenance or demand may push the systems’ maximum capabilities. These factors lead to high volatility in the real-time electric trading market.
Most customers do not see this volatility since they are charged a fixed cost for electricity, generally more than the average wholesale rate. But now many electrical suppliers offer consumers an option to buy energy on the real-time wholesale market. This is made possible with smart grid technology and specifically with smart meters, which report electrical energy use by the hour to energy distributors. The distributors then charge this wholesale rate plus distribution costs rather than the higher fixed rate.
Being an electrical engineer and very interested in environmental issues, I was an easy sell for the ComEd Residential Real Time Pricing program. They installed a smart meter at our house and provide online real-time prices and data showing our hourly electrical use and charge rates. Simple things like running the washing machine and dishwasher on off-peak hours and reprogramming the air conditioner to cool the house at night reduce our bill and the peak demand to the electrical grid. Reducing peak demand levels generator loads, improves efficiency and lowers greenhouse gas production.
While Fermilab’s electrical metering and contract is more complicated than that for a residential program, similar cost savings can be realized by planning high-energy operations at the lab to coincide as much as possible with periods of lower electricity costs. Fermilab’s Sustainability Committee is investigating present and future energy use to reduce operational costs and minimize our environmental footprint.
Power management such as load-shifting to off-peak rate periods is just plain smart, both financially and environmentally, both at home and at work. So yes, smart grid technology and real-time pricing programs give us the tools and incentives to be smarter energy consumers!
—Brian Chase, president, Fermilab Sustainability Club