The good, the battery, and the ugly
The battery installation is well underway. Even though the equipment and support are being provided to me through ComEd’s Smarthome Showcase, I still found myself questioning the benefit. If it is purely a backup battery, is it worth the thousands of dollars in equipment, energy costs to keep the battery charged, and not to mention inevitable emotional toll so that my fridge never skips a beat in the event of a blackout? The battery would keep critical loads afloat for a few hours, but if it can’t sustain me through an apocalypse do I really need or even want it?
I am one of the single digit percentage of households on real time energy pricing which, by the way, is projected to save me between 10% and 20% on my electric bill without any habitual changes (*knock on wood*). Initially I was under the impression that the batteries would allow me to run off the grid when real time prices were high and charge when prices dropped. You know, the sort of outcome that you hope for when dealing with any sort of open market. After a chat with Marc Thrum from Intelligent Generation I learned (amongst many other things), that the mental model that was so firmly implanted in my brain has a name: energy arbitrage. Sounds insidious, doesn’t it?
While the model in isolation makes perfect sense, what I failed to take into account was that batteries have a finite life, which is dictated by the number of charge/discharge cycles. Ah! Now I understand why energy arbitrage would come into play not for the day to day fluctuation of pennies per kWh, but when prices experience a drastic peak! What if it was suddenly $0.30 per kWh? Or $1.00?
The real savings comes from a line item on the real time pricing bill known as “capacity charge.” The more I learned about this the more sinister it sounded. When a household has a fixed kWh rate, the capacity charge is rolled into the price. For those of us being charged real time, this rate is determined by a random audit.
There's a company called PJM and, for all intents and purposes, they control the grid. This company brings together different providers of energy to create a wholesale energy market. When there is a particularly high demand on the grid, power begins to be provided by less efficient and more expensive energy sources. Twice a year random audits are conducted to determine how much energy the consumer is using relative to some - at least to me - ambiguous benchmark. If you happen to be using a lot of energy during the audit which occurs in the midst of, say, a heatwave, then you're penalized for the next six months. Sinister and punitive!
So how does the backup battery help? Well, Intelligent Generation uses whatever vast amount of data they have at their disposal to try to predict when these audits will occur (psssst - I've been told that they always happen in the late afternoon hours) to lessen the load being drawn from the grid. Then, badda bing badda boom, the audit shows a lower level of energy consumption.
Sure, it sounds a little like gaming the system, but how the capacity charge is determined doesn't make much sense to me. It seems that with the fast networks and faster processors at our disposal they would be able to do some sort of real time analysis to determine what the charge is. I've missed the cutoff for the last audit, so I'll have to wait until the Spring 2014 to see if they claims are true and hopefully they will be, especially since Intelligent Generation's entire business model is built around this proposition.