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1149 posts

Uber Geek

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  #2040818 20-Jun-2018 00:38
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NZ demand pattern does exibit a duck curve, here is today's.

Peak solar production does fall right in the middle of our "interpeak" demand dip...

We should note that the NZ electricity generators are quite different to those in say California, South Australia etc. Take a look at the below plot showing demand and price in the "upper north" region (everything north of taupo approxx):

Notice despite demand in this region ranging from 900MW to 1800MW, the wholesale price doesn't spend substantial time outside $45 - $70 price range. This indicates that the current generation mix can handle this variability without much difficulty.

With such a large amount of hydro in our generator mix, it is very easy to generate less at say 3am, or 3pm, and ramp up generation a bit at 7am, and 6pm. Contrast this to places with a lot of efficient combined cycle thermal plants (either nuclear of fossil fuel), such plants take days to start up. In many area's the power price sometimes goes negitive, and they have to pay to get rid of power, just to stay online so they can generate for the next peak period.

With NZ market conditions, things like grid scale battery packs, or thermal banking for domestic heating are unlikely to make sense. (can do the latter with a large brine tank which is heated off peak, then the energy distributed via a hydronic system when required.

That said things that have fairly low cost to shift demand off peak will likely make sense. (i.e. ripple control on hot water cylinders, setting electric vehicles to finish charging at 6am (instead of charging them all when we get home from work at 5:30pm)

It should be noted that according the the EECA, in the long term, solar will increase emissions as it will displace grid scale renewable (geothermal, run of the river hydro, wind, tidal etc), requiring cheap peaked plants to cover morning & evening peaks. see "is it green" below.


Aredwood: On the low user plans in Auckland. The lines fees are more than 10c per unit. And are by far the most expensive input cost that makes up your total per unit cost of electricity.

Because they make the cost of electricity so expensive. People respond by reducing their power consumption, and by getting solar installed. And the biggie - converting to gas. I'm a plumber and gasfitter by trade, And I have installed countless numbers of gas hot water heaters and gas cookers over the years. But only rarely has someone asked me to install an electric hot water cylinder to replace a gas water heater, or disconnect a gas cooker to allow an electric cooker to be installed. It's extra money for me, but really bad for the environment, considering how much extra carbon emissions you get from gas hot water compared to off peak heated electric hot water. But gas hot water saves people money compared to electric hot water. So they will keep on phoning me and I will keep on giving them what they want.


As an interesting side note, vector has a battery station in Auckland. In short the line into an area is near / over capacity. By shaving the peaks off with battery storage, vector has been able to defer / avoid a very expensive supply line upgrade. Perfect application for this tech.

Regarding lines company pricing, for our nations benefit, we should be moving everything we can onto electric (or natural gas), rather than imported Oil products (incl LPG). Sadly current lines company pricing (other than TLC), does not really reflect the cost of provision of services, and sends false price signals. (i.e. minimize total power consumption).  As an example, current pricing policy encourages consumers to set their heaters on a timer, so they come on just before they need them in the morning. Lines company costs are pretty much purely driven by peak demand, so it would actually be cheaper for the lines company if the same consumer ran their heat pump all night, so it was running gently (with the inverter) at peak time, rather than running flat out.

That said, TLC's pricing structure has caused undue grief amounts their customer. (in short they charge lines fees based on your peak consumption at times when their network is stressed, and it carries from previous owners / tenants to new ones. i.e. previous tenant ran 6x 2.4kW fan heaters when the had guests that came back from the skifield in three winter evenings. Next tenants lines fee bill will be something like $300 a month.).

It is hard to think up a similar scheme that isn't onerous, or complex. Capacity charging (i.e. pick your main breaker size, pay more for a bigger one) undoes one of the main advantaged of being on the grid - the ability to use heaps of power if the need arises (i.e. have many guests) - also would mean that an Electric vehicle can not draw heaps of power as required to finish charging in a 5 hour off peak window.

Regarding gas pricing, network charges are such, that unless you use a lot of gas, it is not worth being connected. In one of my previous flats we were around break even point. i.e. gas cost half the price of power, but the $30 we saved from that went to paying the $30 monthly fee for the gas connection. Current house don't have gas even though it is in our street. I have no interest in connecting.

This possibly shows what may start happening in the future if we crank up fixed costs. Households could opt to go off grid to avoid those charges, meaning a lesser number of households are now sharing the cost of maintaining the local lines and power grid. Unless it had some capacity component, it would also strongly favor larger households over smaller ones. One of my colleagues shares his internet connection with his parents in another household via Ethernet or similar, they are in different titles on the the same cross-lease section. I can imagine the same thing happening with power if fixed costs were high.


One of the most cost effective ways to go off grid would be with a relatively undersized solar & battery bank. I am imagining an extension cord running to the neighbors hooked up to the generator input plug common on many off grid setups. would allow for the batteries to be charged when the sun is down, while avoiding high fixed costs. (neighbors would be paid variable costs + a margin)


Coming back to gas, Something that is really perverse is common in Auckland. We have an existing, natural gas piping network, Yet we have a thriving industry delivering/filling 45kg LPG cylinders. This is perverse because:


- Marginal cost of an extra user connected to that network should be trivial, deliverly costs via a truck should be non-trivial.


- Natural gas is cheap and extracted in NZ. LPG is relatively more expensive, and is generally made from imported oil.


It appears the natural gas network owners are stuck in a hard spot with regards to profit maximization. Set monthly costs to high, and you get undercut by both the LPG operates who run a lower monthly cost, higher per unit charge model, and electricity only users (already pay electric connection fee). Set the unit charge too high, and there is not enough saving to get people interested to connect rather than just using electricity.
Personally I feel they would be a lot better off if they doped the connection fee, and increased per unit costs. (perhaps having a stepped tariff (i.e. price half's for every unit after 150kWh each month) to incense people to use more gas...)


Actually poor people are more disadvantaged by the current system of low fixed costs and high per unit costs. Reason - The marginal cost of using extra power is really expensive. So we end up with children freezing in cold houses, because the parents can't afford 25c+ per unit of power, so they can't switch on any heaters. Despite late night power being really cheap on the wholesale market, plenty of available lines capacity late at night, and that power being close to fully renewables.

Note also that poorer households tend to have more people in them on average than richer households. As poorer people need to split the cost of the rent. So even if the fixed fees are say $5 per day, it would tend to be split over more people. So the per person cost will still be affordable. And more people in the house typically means higher total power usage, so the household often won't qualify for the low user rates and the subsidies that go with them. Even if the power usage per person in that house is still quite low.

Rich people are easily able to afford to get solar installed, convert to gas, get a heatpump to replace electric resistance heaters. Poor people in rental properties can't do those things. So they get hit the hardest by high per unit rates.

You have hit the nail on the head here. The assumption that "poor" people use much less power, is only really true if they are in energy poverty, and forgo things like heating. Generally power is not really a luxury outside of things like heated swimming pools.


As you said, the wealthy are able to do things like buy modern thermally insulated houses, install heat pumps, or wood burners (with wet back & wood shed).


It is a policy failure when a household with an extended family of 12 people living in a large house in south/west Auckland is subsiding the power usage of double income professional couple in a modern up market suburb apartment (via low user plan). We should get rid of that subsidy.





3885 posts

Uber Geek

  #2040822 20-Jun-2018 01:22

Capacity charging works well if implemented properly. The method that TLC used was not. Simply because they didn't provision any hard limits to the capacity that the customer had purchased.

Smart meters can be programmed to limit capacity. Imagine the customer has purchased 5KW of capacity. The meter starts measuring at the start of the hour. And if it records 5KW/Hr of usage before the hour is up. The meter uses it's internal disconnect relay to cut off the power to the house. At the beginning of the next hour, or after a min programmed off time, the meter turns the power back on. No bill shock. But annoying enough to the customer, that they will either reduce their peak demand. Or buy more capacity. The meters can also be programmed to only limit capacity during peak times. So the customer still has full capacity up to their fuse size for offpeak. Currently deployed smart meters already support the above. It only requires a programming change that can be done remotely to enable.

LPG is only popular because it is cheap to install compared to Natural gas. And it is available in areas without natural gas available. Back in the 90s, Enerco offered a special. Just $99 to connect to Natural gas. You had to get gas hot water and heating to qualify. But I think they also subsidized the cost of buying gas appliances.

But now, the power and gas lines / network companies are not allowed to subsidize the connection costs.

And LPG costs around 16.4c per KW/Hr including delivery. Yet low user rate electricity is min 22c or so per unit. While the bottle rental fees is only around 35c per day. So you are making a big saving on the per unit rate by using LPG. Yet your total daily fees are still well under $1 per day. So emitting more carbon dioxide on purpose, means that you save money. All thanks to the low user regulations.

Most LPG in NZ actually comes from the Taranaki gas fields. (mixed with the natural gas) And such a large amount gets extracted, that NZ sometimes exports LPG. But the gas companies make more money selling it on the domestic market.

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