Pricing electric power dynamically in respond to demand would incentivize users to shift their demand toward off hours. This would reduce the amount of less efficient peaking electric generation plants used and should overall lower the cost of electricity. But at least in Connecticut the highest price for electric power would be quite steep.
The proposal, based on their Plan-it Wise Energy pilot program, calls for a 10 to one ratio in off-peak to critical peak pricing. In the pilot, participants were paying up to $1.60 per kilowatt hour (kwh) during critical peak time, which totaled 40 hours over 10 different days.
40 hours over 10 days is 40 out of 240 hours or about one sixth of the time. Anyone would could avoid much electric power usage during peak times would save a lot of money on their electric bill.
Customers would be able to opt in to either peak-time pricing or four-hour time of use rates. Rebates will be provided for low-income customers who reduce their energy during peak hours.
Pricing electricity based on demand makes economic sense. But $1.60 per kilowatt hour is a shockingly high price. By contrast the US retail residential average cost for 2009 is 11.55 cents per kilowatt-hour . Though Connecticut also already has some of the most expensive electricity in the United States (why?) at about 19-20 cents per kwh.
Many of us are going to face dynamic electric power pricing in coming years. If you are looking at a big remodeling or new home construction think about how to store heat or cold in sold masses in your house so that you can avoid running the air conditioner or electrically driven heater during peak demand afternoons. Also, appliances that can take instructions from a home network to power up and down at different times of the day could save a lot of money once dynamic pricing is implemented. Becoming a night owl and working when rates are low will also save money on electric bills.
The challenge in computing has shifted from making them faster to make them do more work per unit of energy used. Hardware no longer costs as much as electricity in some computer server farms.
Over the next couple of years, balancing performance, reliability and energy will grow trickier because of shift in data center economics. Itís expected that at least half of the Fortune 2000 companies will spend more on electricity than on purchasing new hardware by about 2010, according to Hewlett-Packard executives.
I picture a future with lots of server farms combined with solar photovoltaic installations straddling the equator in low cloud, high insolation regions. Since the computers will cost less than the electric power fiber optic cables connecting these server farms can shift compute jobs around the planet as the Earth spins thru its 24 hour day.
That future won't happen until photovoltaic costs fall by another order of magnitude and computer electric power usage climbs even higher.
Currently Google locates server farms closer to customers in order to minimize latency on query responses. But compute jobs that aren't interactive (e.g. big sims of climate or for designs) don't need that proximity to users. The biggest obstacle to shifting them around might be the size of their datasets. Will dataset size serve as an obstacle to simulation shifting around the clock? Or will fiber optic transmission capacity be so cheap that shifting jobs from server to server several times a day won't pose any cost problems?
Of course, if 4th gen nuclear reactors end up being cheaper than PV 20 years from now server farms will probably each continue to run 24x7.