Why is energy “cheaper” at night? Doesn’t nuclear, coal, hydro, etc all cost the same to produce no matter what time of day? Demand shouldn’t factor into cost.
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Except demand does factor into costs and is how energy companies make lots of money. Here in California from 4PM-9PM is the highest draw of power from the grid mainly because of air conditioning. It is also the times of the most expensive power rates.
It’s peak priced. They charge you the maximum rate of your maximum usage as though you used that all 24h of the day. You don’t dispense measurable gallons or pounds of electricity to each household.
>Demand shouldn’t factor into cost.
But it does. It is one of the main determinants of cost.
It’s to do when people are using energy.
Nuclear and coal have to stay at steady levels, they react very slowly to changing loads (compared to things like gas turbines and other fast moving generators)
So to make sure they don’t need to increase or decrease anything they bid for cheap power at night when not many people are using it
The thing about grid-scale power is that production has to *perfectly* match demand *at all times*.
This is a challenging, and very expensive problem to solve. It means that power companies often need to build entire power plants just to run them during peak demand. Those plants might just be entirely offline at other times. And they will have an entire army of scientists and engineers trying to predict demand as good as they can but it’s still really hard.
In order to incentivize people to not all use power during peak hours that power is priced at a higher rate.
If people reduce their peak demand that means that power companies can build fewer plants.
It costs the same to produce the energy, but with the lower demand, there is less competition for the resource availability.
Energy needs to be produced at roughly the rate at which it is used, to avoid needing to store it – which is costly. 1000 kv produced = 1000 kv used.
Storage systems fail and need maintenance and replacement.
During peak usage times, production facilities are at capacity, and energy is drawn from various storage mechanisms, as well. 1000 kv produced, but 1200 kv in use.
During low usage periods, production facilities reduce output, and still work at topping up storage, for use during peaks. 1000 kv produced, 600 kv used, 350 kv stored, 50kv of transmission based loss.
This storage of excess production necessitates transmission of the excess energy over the grid from production facility to storage facility, then again across the grid for end use again at a later time.
Each of these transmissions involves some loss, driving the price up during peak times both for compensation for the multiple losses incurred during repeated transfers, as well as the wear and tear experienced by the hardware, etc. for multiple uses of the grid and increased risks of transmission failure, for limit loading of components, during peak times – which just isn’t a risk during periods of lower usage.
I.E. the transmission grid is at significantly lower risk of overload, during non – peak operation. Overloading “the grid” is a reality, and higher risk of occurring during peak usage.
When you build a power grid, you don’t build enough capacity for the average amount of load. You build enough for what you expect peak load is going to be which is going to be significantly higher than the average load. Load throughout the day predictably spikes at certain parts like at 6 AM when everyone wakes up when it begins to heat up and everyone’s AC starts to turn on. Power companies want to incentivize heavy users to shift their usage to night time when most people are asleep and when demand is low. Turning on a power plant isn’t like flipping on a light switch; it doesn’t turn on immediately, you need to heat up thousands of gallons of water and wait for it to turn into steam, while it’s heating up, you’re not generating any power. Power companies want to leave a minimum amount of load to justify keeping auxiliary turbines running to keep from having to turn them on and off which does cost extra money.
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