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Emissions, Future & Tariffs

image credit: Rafael Herzberg
Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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Emissions, Future & Tariffs

In practically all communication vehicles, in Brazil and in the world, there is a lot of emphasis on reducing emissions. Of course, it's about humanity's long-term survival!

Here goes an innovation to face the challenge. It involves two pillars: changing the way electricity is charged and flexibility through a transaction platform.

Change in the rate structure

Investments in electricity generation, transmission and distribution are always referred to its capacity. And my suggestion is, accordingly, to charge primarily for capacity (kW).

The existing charging system is essentially geared towards energy (kWh), which is associated with consumption.

Let's consider two neighboring houses. One has a 1.5 kW central water heating, which meets all the hot water demand of its residents. Another has instant ant thankless heaters in each of the three bathrooms that add up to 18 kW.

One of the houses demands 1.5 kW for water heating and another if two showers are used simultaneously, 12 kW.

The current energy bill presented by the utility is the same for both houses, assuming that the bath time of each resident is on average the same!

But... the investment in the electricity sector's production chain to serve each of the two houses is totally different!

The house with instant showers requires much more capacity in the electricity sector's production chain than the central heating house. More emissions take place too!

Transactions

Our lives are characterized by changes all the time.

If the tariff is mainly for capacity, a house that wishes to be "cleaner" in emissions, for example, being more energy efficient, could "sell" kW it no longer needs through a capacity trading platform that would be made available by the local electric utility company.

And so we would have created a system that would naturally encourage the reduction of emissions. In a very simple way. No subsidies or taxes needed.

But a "gotcha". The house with the three instant showers would pay a much larger bill than the house with the central heater.

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