I see many commercials especially now just before summer, from the power supplier, urging the customers to save power; by setting the AC temperature to “room temp” or turning off the water boiler. And I can’t understand why they would spend money on media to ask their customers to “buy less product”.
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When you sign a contract with an electricity company to wire your house, you’re not just agreeing to buy electricity at a certain price but the power company is also agreeing to sell you electricity at a certain price. If the power company has several ways to make electricity and they don’t all cost the same. Some plants, “base plants” like hydroelectric plants produce electricity cheaply all the time, but have high costs to build, and can’t easily be shut down if they’re producing too much energy. Some plants, “peak load plants”, like gas plants produce electricity expensively but are cheap to build and easy to shut on and off. The power company needs to supply as much power to the network as all the users are using but the users don’t use the same amount of electricity all the time. People use more electricity during the day and less at night. So power plant companies usually turn on their gas plants during the day, then turn on more gas plants during the day, then shut them off at night. The hotter it gets and the more people crank up the AC the more gas plants they turn on. However gas plants are expensive per kilowatt, and they sell electricity at a fixed price no matter what plant it comes from. Thus power plant companies can lose money during the hottest days but more than make it back from selling hydropower at near gas prices at night.
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