energy costs


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.

In: 1

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.

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 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

>Demand shouldn’t factor into cost.

But it does. It is one of the main determinants of cost.

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.