Search Archives
Why New Daedalus?

Daedalus was the mythical great architect and artificer of the classical world. Today, embedded intelligence is enabling the most profound changes in the way we create and use buildings since his day.

Building Intelligence meets the Intelligent Building. The Intelligent Building negotiates with the Intelligent Grid. How will this transform how we interact with the physical world?

More on the Web
Login
Powered by Squarespace
« Smart Cars at Home on the Smart Grid | New Energy and Legacy Buildings »
Sunday
May172009

Transactive Energy and Little White Lies

As I head off to the second smart grid interim roadmap workshop (whew – that’s a lot of pairs) I think back to one of the participants in the Business and Policy track that I led with Lynne Kiesling. Several members, bunched together in the participants, were from the Edison Electric Institute, the association of share holder owned utilities. They peppered us with detailed questions and countered transactive smart grid scenarios with valid objections. It was on the second day, however, that I recognized the thought behind many of their concerns. They feel that they are asked to subsidize pretend transactions. When I say “buy power from your neighbor’s solar cell”, they hear “so we’ll put in $1,000 of equipment so you can buy $100 of power; the cost of which will be subsidized by all the other customers.”

Well, they’re right.

One reason that there is so much inefficiency in electricity is because utilities are asked to be providers of all sorts of social services. No cut-off of electricity in winter in the north. Subsidize rates to the poor. Smooth rates throughout the year. None of these ideas are bad; it is bad that we have no idea what they cost.

Now we add in feel-good electricity generation: Subsidize new energy. Provide reliability to back up the intermittent energy sources. We do need to plan for tomorrow, but do these investments make sense? How large are they? Are we increasing the base rate for electricity which we will then subsidize down for the poor to pay for the hobby power affected by the well-to-do?

These are legitimate questions. Murky accounting that hides the costs—costs to utilities, costs to customers, and costs to society—is always a bad policy. Transparency is good. Occulting is bad.

Transactive energy on the smart grid actually supports the concerns of the Institute. They wish to know what things actually cost. Transactive energy will reveal those costs. As a society, we may decide that we want to subsidize particular energy sources. We may wish to prime the pump for new energy. We may wish to impose carbon taxes on other energy.

Whatever we decide, we should do it in the light of day. In a free country, we should not hide public policy behind a cloak of murky accounting. Let’s make our decisions in the light of day. Transactive energy lets the sun shine in.

PrintView Printer Friendly Version

Reader Comments (1)

Nicely said (as always). Hope you have a nice trip to my hometown.

May 19, 2009 | Unregistered CommenterMichaela

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>