Why there is such thing called peak/off-peak in electricity demand? Well, the better way to explain it is quite simple, we human beings live and work in a cycle according to day light. We also artificially breakdown such cycle in weeks, months and years. Seasons change, culture and customs of a nation are other factors influence electricity consumption.
How centralized electricity supply business started? How has it been evolving? Electricity is a form of energy, but has fundamental difference from another type of energy supplied by utility companies: GAS. In history, there is also another form of energy supply by pipe in late 19th century, which was compressed air. Gas in its original form of energy, don't have great deal of concern to energy companies because customers mainly use this type of energy for combustion to access its heat energy. For electricity and compressed air, there are a lot of challenge. Electricity and compressed air are secondary energy, which means some sort of energy conversion to create such energy potential. In electricity, its the electrical voltage, frequency (AV) and loading in the network. Compressed air requires air pressure being maintained by the compressors. From the application point of view, electricity seems to be on the upper hand because we can design many appliances to extract energy out of electricity, for example, lighting, heating, torque, signalling etc.. The most important reason that killed compressed air business 120 years ago was energy efficiency. It cost a few times more to extract original energy to compressed air than creating electrical energy. Deliver electricity over long distance also made another good case to embrace electricity concept. Because to build big power plant with big generators helps to improve energy efficiency, (even though more than half of the original energy is wasted except hydro power plant), the world has been dominated by centralized electricity supply business.
Supply electricity business is highly regulated by government. The main part of responsibility for these companies is to guarantee electricity supply in even extreme demand circumstance. Unlike water supply, which automatically cut slow water supply flow when everyone turns on water taps, when everyone in electricity network turns on their cooking oven, lights, TV, AC etc. in the same time, electricity companies have a lot to do to make sure there is no melt down in the network. So when such extreme demand happens, first of all, the network will have to turn many generators on line to supply energy. But the main challenge is the network supply line, which has to be built to handle the current that will surge in such demand, i.e., it will be like the water main pipe that is capable to expand when demand is high. Of course, we know that is not going to happen. So the electricity companies have to invest in the supply transmission lines according to the forecast. This is an expensive investment. So the government has to allow price of cost to factor into the bill their customers pay. Smart grid is only "smart" within a limit the network can handle. So when they say smart electricity management, there are compromise from us:
- Consumers are not always right, at least in electricity supply so suck it up if the grid don't have the capacity, they have the choice to limit who can keep on use electricity and who must be cut off.
- Peak rate and off-peak rate to regulate private customers and business customers. So we can save money if we don't use certain type of electricity appliances in certain time.
Energy lost during electricity generation, which is in fact an energy conversion process. Based on 65% of power plant energy lost and then the 10% lost during transmission, plus the mismatch of network loading and generation, electricity network in global scale has fail to achieve high energy efficiency. Even if we make all the power plants use very efficient engine, we think the energy lost during transmission can be avoided if we put the generators on the consumers' premises. By doing so, we have better change cut down energy cost. The catches are, we must have generators and engines to match, if not more than, the centralized electricity supply business. I have a few other conditions how this can happen to go completely off-grid listed in the book. You can read my ideas in full once you become a registered visitor. If you wish to cut your electricity (Australian retail electricity price) bill from 30+ cents to a few cents per Kwh without limiting your freedom of electricity need, you can do so with the help of Blue Energy innovation. In order to massively improve global energy efficiency, we must consider to live without centralized electricity grid, otherwise the energy network branded as "smart"!
If you have read my book, there is an interesting comparison of three types of energy: electricity, gas and car fuel. It turns out, based on energy value of GJ per dollars spent, gas price is the lowest. If we use gas price as base, electricity is more than 5 times more expensive. Car fuel is twice more expensive. Gas supply has far less problem in supply and demand correlation than electricity. In order to fulfill their responsibility, utility companies must upgrade the power network constantly to match potential peak demand. This is main reason behind the high cost.
Part of our vision of future energy management is to make your household waste becomes your electricity fuel, which can cut down landfill massively. Carbon dioxide will be part of carbon energy cycle to store energy. This is our next blog topic.
With our prediction that car engines can be used as the off-grid generators, we think the future must be cloud generators based local energy hubs. Future cars will help their owners to break free from the curse of high electricity bill.
For conventional gas supply business, they could also evolve to meet the change. Investment into renewable project aiming to digest carbon dioxide into renewable energy storage medium, i.e., to convert CO2 and H2 into methane can be the big step to move our society from fossil fuel based energy infrastructure into CO2 emission neutral, H2 and CH4 fuel production solution.