ELECTRICITY AND TIME- SENSITIVE PRICING Shreyas Muralidharan and Raaghul Senthilkumar

TIME SENSITIVE PRICING  Pricing that varies with supply and demand  Reflects the actual cost of producing electricity at the time it is needed  Limits serious disturbances in power transmission in the grid

THE PROBLEM  Varying demand of electricity  Utilities must meet these variations in demand  Variable pricing can be used to curtail or encourage use of electricity

COST FACTORS  Capital Cost- Construction costs, and maintenance- Low for Fossil fuels, High for Renewable  Fuel Costs- Cost of obtaining energy sources; opposite of capital cost  The fuel costs and capital costs must both be considered.

COST FACTORS (CONT.)  Weather  Demand largely driven by temperature  Heating demand in the winter and cooling demand in the summer drive the peaks  Economic Health  During economic hardships, factories cut back production due to a reduction in consumer demand

TIME OF USE  People use electricity at different times of the day  This unpredictability leads to increases in power wastage and variances in cost.

GOVERNMENT SUBSIDIZATION  The government can promote the use of certain energy sources by decreasing the cost of electricity generated by those resources.  This can decrease wastage and reduce consumer costs.

GOVERNMENT SUBSIDIZATION (CONT.)

GRID PARITY  Occurs when an alternative energy source can generate electricity at a lower cost than what is currently available on the power grid  Allows for the replacement of expensive energy sources and decreases prices for consumers

GRID PARITY (CONT.)

DEMAND AND RESPONSE  Attempts to tailor power generation to the demands of people  Mainly focused on matching consumer demand to existing power resources  Designed to shift electricity consumption to off-peak periods  Some Attempts-  Utility control of appliances  Incentives for reducing power usage

SMART METERS AND GRIDS  Allows for the regulation of power within the grid  The grid can communicate with itself and channel extra power where the demand is greatest  Reduces overall wastage of power and decreases price

ENVIRONMENTAL CONCERN  Awareness of power usage  Reducing use of nonrenewable resources  Anthropomorphism  Effective when referring to Earth as mother

REFERENCES   parity parity    