OVERKILL
$100 Site Donor 2021
Originally Posted By: exranger06
Originally Posted By: KrisZ
... and once everyone starts conserving, the same utilities will be crying about reduced profits and will jack up the price. Besides, why should we conserve when the plan is to go solar and wind? In fact we should be encouraged to use more.
Utilities are heavily regulated and they can only make a certain amount of profit. If they make too much money, they have to send customers a refund. If they don't make enough money, the government covers their losses. So there is no incentive to encourage customers to use tons of electricity. The utility will not make more money as a result of more electric usage. If people do use too much electricity, all that means is a potentially overloaded system, burned up transformers, and the need to spend money to make upgrades to handle increased power demands. So the utility has incentive to encourage people to conserve energy, and no incentive for people to use more energy.
I'm not sure how universal that is. KrisZ's comment directly reflects the gong show we have here in Ontario where we are paying wind farms for curtailment or paying the US to take excess generation due to conservation, which has been the direct result of skyrocketing energy prices. The last rate increase from the Ontario Energy Board was due to consumers not using enough power (conserving too much) which cut into the profits of Hydro ONE and other utilities.
Also, many of these private generation contracts have minimum monthly compensation clauses tied to them, so you could pay them for an entire month of curtailment and still end up paying them the minimum rate for power as well.
And then you have to look at the operating costs of big thermals, which are significant. Their viability hinges on production; the more kWh they produce in a month, the lower the cost per kWh to operate the facility. This is why nukes are generally run wide-open. If you reduce demand, you make that power more expensive. If you suppress it via intermittents, you are doing the same. Eventually, the thermal may become non-viable, which will then shift the role it was occupying to imports or peakers, both of which will be even more expensive. A nat-gas peaker in Ontario gets paid, on average, more than double what the coal plants they replaced were as well as standby compensation; they are paid to sit idle.
Ontario's demand has, since the GEA (Green Energy Act) dropped by more than 20TWh a year. Consumer rates during that period have gone from $0.047/kWh to an average of $0.13/kWh. In-step with the uptick has been an increase in the cost of delivery (a separate line-item billed by Ontario utilities) which is used to cover the cost of transmission infrastructure, something these utilities, most notably Hydro ONE, have been dumping billions into to connect disparate green generators to the existing grid. They are not expected to shoulder that cost and so it is passed on to consumers.
Shannow has covered some of this (with an Australian perspective) in great detail with respect to the impact of driving thermals out of the market via subsidized renewables which are incapable of shouldering the burden they are then presented with reliably, making the installation of expensive standby capacity necessary and subsequently increasing consumer costs.
Perhaps your system is better run
Originally Posted By: KrisZ
... and once everyone starts conserving, the same utilities will be crying about reduced profits and will jack up the price. Besides, why should we conserve when the plan is to go solar and wind? In fact we should be encouraged to use more.
Utilities are heavily regulated and they can only make a certain amount of profit. If they make too much money, they have to send customers a refund. If they don't make enough money, the government covers their losses. So there is no incentive to encourage customers to use tons of electricity. The utility will not make more money as a result of more electric usage. If people do use too much electricity, all that means is a potentially overloaded system, burned up transformers, and the need to spend money to make upgrades to handle increased power demands. So the utility has incentive to encourage people to conserve energy, and no incentive for people to use more energy.
I'm not sure how universal that is. KrisZ's comment directly reflects the gong show we have here in Ontario where we are paying wind farms for curtailment or paying the US to take excess generation due to conservation, which has been the direct result of skyrocketing energy prices. The last rate increase from the Ontario Energy Board was due to consumers not using enough power (conserving too much) which cut into the profits of Hydro ONE and other utilities.
Also, many of these private generation contracts have minimum monthly compensation clauses tied to them, so you could pay them for an entire month of curtailment and still end up paying them the minimum rate for power as well.
And then you have to look at the operating costs of big thermals, which are significant. Their viability hinges on production; the more kWh they produce in a month, the lower the cost per kWh to operate the facility. This is why nukes are generally run wide-open. If you reduce demand, you make that power more expensive. If you suppress it via intermittents, you are doing the same. Eventually, the thermal may become non-viable, which will then shift the role it was occupying to imports or peakers, both of which will be even more expensive. A nat-gas peaker in Ontario gets paid, on average, more than double what the coal plants they replaced were as well as standby compensation; they are paid to sit idle.
Ontario's demand has, since the GEA (Green Energy Act) dropped by more than 20TWh a year. Consumer rates during that period have gone from $0.047/kWh to an average of $0.13/kWh. In-step with the uptick has been an increase in the cost of delivery (a separate line-item billed by Ontario utilities) which is used to cover the cost of transmission infrastructure, something these utilities, most notably Hydro ONE, have been dumping billions into to connect disparate green generators to the existing grid. They are not expected to shoulder that cost and so it is passed on to consumers.
Shannow has covered some of this (with an Australian perspective) in great detail with respect to the impact of driving thermals out of the market via subsidized renewables which are incapable of shouldering the burden they are then presented with reliably, making the installation of expensive standby capacity necessary and subsequently increasing consumer costs.
Perhaps your system is better run
