Wires Turbines and Smokestacks

What's an electric grid actually made up of? Does it need to stay this way?

At least some understanding of how the electric grid works is necessary to appreciate the DexGrid mission.

The most fundamental element of an electric grid system is understanding that at all times, the amount of power being put into the system needs to be equal to the amount of power being pulled out, by consumers of electricity and batteries charging up.

There's additional context needed, like understanding how congestion can happen along the distribution and transmission wires, or how there's an exponential demand for more power that can be produced in a shorter interval of time. However, just understanding how electricity grids must always be balanced gets you most of the way there.

Since grids need to constantly be balanced, and so far, the best way to get grid participants to coordinate in this effort has been through marketplaces, DexGrid has made improving this marketplace its focus.

Renewables Coming In

What has thrown a theoretical wrench into this system recently has been the advent of very low cost but "non-dispatchable" renewables, like wind turbines and solar power generation. Up until the 2010's, these resources made up such a small portion of the generation mix, they didn't have much of a noticable effect on the massive machine that is the electric grid. However, with the advent of affordable equipment to build these projects, they have overtaken every other form of generation in the annual total of new generation coming online.

With all things in this area, there are tradeoffs. In this case, while the cost of electricity provided is much lower, the source of electricity cannot really decide when the tap turns on and off. In the case of large shares of solar power being part of the mix, this is referred in our industry famously as the Duck Curve.

Basically, solar power generates all of its electricity during the daytime, with a concentration of that being in the middle of the day, but consumers use power mostly in the morning and especially in the late afternoon. The curves of solar power generation and consumption do not align, which is a big problem.

Solar and Wind Increasing Emissions

When we tell you that this is a problem, it's beyond even grid operations. Wind and solar ramping up and down simply based on how much sun is coming to the surface of Earth or wind blowing across it necessarily requires other sources of electricity to make up for it. In much of the US, for example, this is made up for gas generation power plants built to respond to large changes in other forms of generation or changes in consumption on the grid. These are called "peaker plants" in the industry. They are expensive sources of power and they emit far more emissions per unit of power than standard gas power plants; think of your car's fuel effeciency when you drive down the highway for 50 miles versus starting and stopping at traffic lights for 50 miles around a dense city.

Current Solutions

The electric grid industry is full of very smart, driven peple, though. They have currently developed what we would like to break down into 2 main solutions: energy storage and some amount of time of use power pricing schemes.

Energy Storage

The famous example of this is Tesla's buildout of their battery bank out in Hornsdale, Australia. Elon Musk heard about the significant grid issues caused by the subject above and offered to install a large battery storage system to help balance out the grid.

The benefit of storage solutions like this one is that they can charge up with the electricity generated by these low cost sources of power like solar and wind, then discharge them back into the grid when the demand for them is at its peak. In some cases, such as the Tesla Hornsdale project, the batteries actually get paid to take in power to charge and then sell the same power, at a different hour, for multiple times what the average price of power has been.

The issue with batteries is, as everyone knows by now, they cost quite a lot to solve big issues with power grids, as well as how they cost more but don't actually contribute any additional energy into the grid. Basically, the less we can rely on batteries, the better.

Time of Use Power Pricing

The other primary method to help balance the grid and avoid as much reliance on peaker plants and especially brownouts or even blackouts has been different pricing schemes. As of now, the main one employed in some utility regions is called time of use power pricing. What this means is that the utility company identifies certain periods of time and certain levels of power consumption from individual consumers, especially large commercial and industrial consumers (or even train systems), and comes up with an additional fee for these consumers to use certain levels of power during these periods of time. To avoid these additional fees, the consumers must find on their own how to shift their consumption to different times of the day and week.

While many utilities have been implementing time of use and other pricing schemes to incentivize consumer behavior towards a consumption trend that lowers the cost and emissions for everyone, their pricing schemes remain cluncky. Additionally, as of now, they are mainly focused on very large energy consumers, while missing out on the opportunity of shifting consumption from large amounts of consumers as an aggregate.

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