When do smart prices get dumb?

subscribe

My local utility just mailed me a notice informing me that theyÂ’ve installed a new smart meter at my home that will start monitoring and charging me for my electricity depending upon time of use.

The first thing I noticed about smart (i.e. off-peak) prices was how expensive dumb (i.e. peak) prices were. At 9.3 cents per kilowatt hour, power ainÂ’t cheap anymore on the grid Sir Adam Beck built from Niagara Falls.

Sure, if I wanted to do my laundry, run the dishwasher and charge my electric car (if I had one) at night, I could get all the juice I wanted at the very reasonable price of 4.4 cents per kilowatt hour. But I might just want to sleep and leave the laundry and dishes for another day and take the bus to work in the morning.

Toronto HydroÂ’s new smart-pricing initiative is married to OntarioÂ’s new Green Energy Act, which sanctions increased reliance on renewable energy. After gagging on the cost estimates for a couple more reactors, the province backed away from nuclear. And itÂ’s vowing to close down North AmericaÂ’s single largest source of CO2 emissions, the Nanticoke coal plant, within the next four years (mind you, the same Ontario government has promised this before).

TomorrowÂ’s power will come from renewables via a $7-billion deal with Samsung to install wind turbines in the Great Lakes, and to provide solar energy as well.

Many will applaud the addition of this clean and renewable source of power to the grid. Fewer will applaud the 19-cent-per-kilowatt-hour price tag thatÂ’ll come along with it.

As they say in stock brokerage, find a strong enough wind, and even pigs can fly. Pay 19 cents per kilowatt hour for power, and you can let the wind turn on the lights. But at that price, how long will you leave them on?

The larger the contribution wind power makes to tomorrow’s grid, the less power you will be able to afford to draw from it — the same way triple-digit oil prices, which will pull tomorrow’s oil supply out of Alberta’s tar sands, will translate into pump prices that’ll force millions of drivers right off the road.

It’s not how many megawatts of additional power new sources like wind add to the grid that counts. Rather, it’s the amount of power demand that a 19-cent–per-kilowatt-hour price will kill that’ll have a far greater effect.

In the end, OntarioÂ’s implicit strategy of future price rationing may be the best energy policy of them all. If power prices keep rising, demand will peak, and maybe then we wonÂ’t need to build any new power plants in the first place.

As for my new smart meter, what bears monitoring is how its benchmarks will change. With wind turbines taking over from coal plants, tomorrowÂ’s smart power prices will soon cost more than todayÂ’s dumb ones.

Related News

powerlines

Manitoba's electrical demand could double in next 20 years: report

WINNIPEG - Electrical demand in Manitoba could more than double in the next 20 years, according to a new report from Manitoba Hydro.

On Tuesday, the Crown corporation released its first-ever Integrated Resource Plan (IRP), which not only predicts a significant increase in electrical demand, but also that new sources of energy could be needed in the next decade.

“Right now, what [our customers] are telling us, with the climate change objectives, with federal policy, provincial policies, is they see using electricity much more in the future than they do today,” said president and CEO of Manitoba Hydro Jay Grewal.

“And our current,…

READ MORE

A tidal project in Scottish waters just generated enough electricity to power nearly 4,000 homes

READ MORE

hydro quebec meters

Class-action lawsuit: Hydro-Québec overcharged customers up to $1.2B

READ MORE

nuclear power

BC residents split on going nuclear for electricity generation: survey

READ MORE

utility underground workers

Investigation underway to determine cause of Atlanta Airport blackout

READ MORE