My assumption is that electrical providers own their generators. So when they generate electricity, it goes out into this massive repository that is the electrical grid and then all consumers take at will from it.
So how do electrical providers keep track of “their” electricity and who is consuming it? Electrical production has to meet demand in real time so how do providers know who is responsible for generating how much at any given moment?
And how do the companies that own the power lines factor into this? Are they at all related to the power generation companies or are the latter just customers?
In: Engineering
In ERCOT (Texas) everything was “unbundled” when the industry was de-regulated (or re-regulated depending on your viewpoint). So generation is independent of transmission and distribution. Energy Service Providers (ESP’s) sell energy to the end consumer buy buying energy from the generators through a QSE (Qualified Scheduling Entity) and delivering to the end user on transmission and distribution lines, which may or may not be one company. The distribution company (the “Wires” company) is the one that delivers your power to point of use. This is the one you have no choice over, since each has it’s own territory.
Energy at every point (generation, transmission, distribution) is metered by extremely accurate meters that have to meet exacting standards. These are the “settlement” meters. There are also the meters on your home.
The “settlement” meters are all time stamped at a minimum of every 15 minutes, although I believe generation is actually at 5 minute intervals. All this metering data is routed through ERCOT where generation output is matched against all the various transmission/distribution metering points, and ultimately balanced out against the end metering at your house. This is the only way it can be done, since the grid is entirely interconnected (internally), so generation is about like pumping a water well into a river, then monitoring who pulls water out.
Once all the data has been processed, fund allocations are made based on who bought what from whom at what price and what time. Even though the metering has 15 minutes intervals, the billing is usually done on an hourly basis.
Anyone can play. Grid generation is determined by who can offer “base” load at the cheapest price. This is the load that is pretty much there all the time. The “intermediate” load (i.e., the day gets warmer and load goes up from base) is the generation that is slightly more expensive. The highest cost generation comes on at peak (late afternoon in a Texas summer). The ESP’s (remember them) try to study their load patterns, weather predictions, etc. and arrange through the QSE’s to acquire given amounts of power at given times. Since “anyone can play” this means that the end user (you) can use a solar or wind turbine to generate back into the grid through your house meter and receive compensation.
ESP’s are responsible for their costs. If they don’t schedule enough energy, they end up paying a premium price at peak loads (aka, the recent ice storm). On the flip side, if they schedule too much and don’t need it, they can either try to sell it on the market, or pay for it even though they didn’t need it.
The “wires” companies get their money by fixed rates based on their “cost of service” and often tie in an extra charge based on kwh usage. They do not market “energy” unless they are an Electric Cooperative (which I think is unique to ERCOT). So the “wires” companys roll is to provide the actual service and metering.
There are more “fun and games” money making schemes like Congestion Revenue Rights if you want to look up an example of capitalism at it’s finest (or worst).
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