
MezHunt
517 posts

MezHunt
@MACEEGroup
Passionate about climate change solutions, electrification and coffee.












If renewables are so cheap, why are electricity prices going up? As many (like @duncancampbell) have pointed out, electricity generation is actually getting cheaper but delivering that electricity is getting more expensive. Increased delivery costs are often attributed to transmission needed to connect renewables, but transmission isn't actually the problem. Transmission operates at high voltages and benefits from economies of scale. Distribution (that part of the grid that delivers power to your home) operates at lower voltages and is much more expensive. The U.S. has about 200,000 miles of transmission lines, but around 5,500,000 miles of distribution lines. Distribution makes up over 2/3 of the cost of delivering electricity! Technologies like nuclear can help lower transmission costs, but even an SMR in every town won't fix rising distribution costs. So what makes distribution so expensive, and how do we fix it? Transmission & distribution capacity costs a lot to build, but the marginal cost of using that capacity is zero. The problem is that we need to build capacity to serve peak demand, but on average we use a very small portion of that capacity. Residential load factors (average demand/peak demand) are often just 10-20%! Capital costs have to be amortized over relatively few units of energy, which makes distribution expensive per unit. To lower the cost, we need to smooth out demand. This is where distributed energy resources (DERs) can help. DERs can generate energy locally or shift consumption to times where excess capacity is available. This helps consumers use more electricity with less grid capacity. Home batteries, smart EV charging, more efficient HVAC systems, better insulation, home solar (paired with storage), smart water heaters, etc. are all technologies that can greatly improve load factor and lower distribution costs. The reason we don't see more of these technologies is that costs are socialized and consumers can't internalize the financial benefit of lowering grid costs. T&D is typically charged with flat volumetric $/kWh pricing. T&D costs however arise from peak kW system demand. Moving to time of use (or real time) T&D pricing would give consumers the price signal needed to lower both their own costs and system costs. Distribution costs are not going to be solved without distributed resources. They're rising because we're forcing a centralized "solution" on a problem that requires a decentralized solution. We don't need to pick technology winners. Consumers are smart and they can solve rising grid costs if we just empower them to do so.


All-electric homes are more comfortable to live in and cheaper to run. That’s why we’re helping more Victorians - including first home owners and vulnerable households - go all electric through our Residential Electrification Grants.










#AusGov now has a National Battery Strategy outlining strategic priorities and opportunities to grow a thriving local battery industry. Learn more: industry.gov.au/NationalBatter… #FutureMadeInAustralia #NationalBatteryStrategy #Budget2024 #batteries #manufacturing






