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How to charge kW capacity and kWh commodity?

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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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  • Jun 8, 2020
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How to charge kW capacity and kWh commodity?

Regardless of the energy source, there are always two costs involved: that of kW referring to the amortization of the investment related to the associated capacity and that of kWh to produce the commodity.

kW includes generation, transmission and distribution up to the customer. kWh includes the operation and maintenance of the generation.

The more adherent the charges to this kW and kWh binomial are, the better the possibility of minimizing real costs for the final customer and for the system as a whole.

I propose for consideration that for all customers (not only those connected to medium and high voltage) kW and kWh are charged separately..

That way they would choose the sources they want to contract - based on costs that reflect reality. It would be an efficiency signal!

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Bob Meinetz's picture
Bob Meinetz on Jun 8, 2020

That way they would choose the sources they want to contract - based on costs that reflect reality. It would be an efficiency signal!

Rafael, how would it be possible for someone to contract "100% solar electricity"? I think the physics of your proposition don't reflect reality.

Rafael Herzberg's picture
Rafael Herzberg on Jun 8, 2020

Hi Bob,

What I have in mind is: every energy user should contract a "portfolio" of sources and accordingly pay for it. 

Let's say I like solar energy. It is a source that is only able to produce about 20% of its kW nominal capacity (in a typical location) or around 140 kWh/month. 

Then I would have to buy another source also, it may be hydro, thermal, wind - whatever - till I am able to reach 100% of my power needs.

Actually this is what the Independent System Operator already does in a macro way.

I am led to believe that the market could be structured to offer pre-established power portfolio arrangements that could be made availabe for energy users. Then they would choose the portfoloio mix they wish. 

 

Bob Meinetz's picture
Bob Meinetz on Jun 8, 2020

Rafael, it's a physical impossibility to direct quantities of different sources to each individual customer. On an electrical grid, everyone gets the same mix.

Rafael Herzberg's picture
Rafael Herzberg on Jun 9, 2020

Hi Bob,

Deregulated energy users have the right to lock power deals as they wish. For example they may set up a portfolio of power contracts associated with hydro power plants, solar farms, wind farms and other selected on-site such as cogeneration. In my professional career for many industrial/commercial energy users (above 3 MW of contracted demand) this was done!

Regulated energy users in the current system must buy a single source from their local utility company. I have in mind that this system could be enhanced. The local utility could offer portfolio options for their clients. 
 

Bob Meinetz's picture
Bob Meinetz on Jun 10, 2020

"Regulated energy users in the current system must buy a single source from their local utility company. The local utility could offer portfolio options for their clients."

This is a common misperception. Power utilities are incapable of offering different different generation options to individual customers. Everyone gets the same power "mix".

 

Rafael Herzberg's picture
Rafael Herzberg on Jun 11, 2020

Hi Bob, that's exactly my point! I am suggesting that this concept should evolve. As oposed to everyone getting the same mix I seepotential fora new approach!

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