The issue seems to be that energy markets are a long way from achieving financial market levels of responsiveness.
You're essentially increasing the number of market participants a couple orders of magnitude, and the system and existing players semi-understandably balk.
On the other hand, without exposure to end users, the utility-driven pace of change is going to be glacial (by which I mean, we won't have glaciers anymore either).
We already have "smart-meters" that enable time-of-day billing. They just need to monitor usage on a per 5-minute basis (and I suspect they do). They don't necessarily need to report it every 5 mins (otherwise how does the current system know how to respond to demand?).
I do feel like we should start billing on per-5-minute increments, then the responsiveness will come.
I think overnight we'll have a thousand startups selling devices that turn on/off your HVAC or car charger accordingly and save you money overall. Possibly even with a warmer home in winter or cooler home in summer, by being strategic.
> They don't necessarily need to report it every 5 mins (otherwise how does the current system know how to respond to demand?).
Supply is managed at the ISO level (a grid subsection, like the entire California grid), not the individual consumer level. The ISO monitors the AC frequency of the grid, which varies with the imbalance of supply and demand. The ISO contracts with "spinning reserve" generators who supply power to the grid at low latencies when needed to meet demand, a service known as frequency regulation.
There are efforts underway to provide frequency regulation via demand control and battery storage instead of spinning reserves, which are typically Nat gas turbine powered.
Right, but why not let my electric car or water heater take part in that market?
Instead of spinning up a natgas turbine, why not let my water heater or car charger take a break as a part of the market?
There are some grid level implementations of this (install our thermostat that we can remotely turn off to get a 5% rebate), but these seem to work around the primary problem: we pay an average price for electricity, not the actual price.
And if it all works based on grid frequency, the system could even work offline: water heater sees frequency drop and takes a random break between 1 and 60 minutes.
Or variable-frequency drive AC drops 10% in intensity, or increases by x% when frequency is getting a little high.
> Right, but why not let my electric car or water heater take part in that market?
Instead of spinning up a natgas turbine, why not let my water heater or car charger take a break as a part of the market?
Indeed, that's precisely what I meant by frequency regulation via demand control and batteries.
The problem I was thinking about was demand harmonics.
It's not unreasonable to envision a scenario where a large number of independent devices, acting in their own self interest, end up oscillating between on and off together. E.g. by using the same logic.
It seems like you need something approaching a parallelism primative to coordinate behavior. E.g. bid two steps in advance, find out if your bid was accepted one step in advance, then act.
Or is bidding in energy markets already complex enough to avoid that outcome?
You can imagine a system where loads with the ability to vary their draw do so automatically in response to grid frequency changes, without even needing a centralized bidding system.
Frequency regulation is, however, a relatively small amount of power, and the grid itself needing to run at a particular frequency is more the result of loads that rely on the grid frequency for timing (i.e. A/C electric motors in fans).
In the future the grid frequency could be allowed to vary much more if loads become resilient to frequency variations.
The bigger (in terms of total energy) issue is shifting load to match supply, or vice versa. That can be achieved with appliances that store energy in one form or another. One of the most interesting examples of this is generating ice with wind energy at night to be used for cooling during the day.
You're essentially increasing the number of market participants a couple orders of magnitude, and the system and existing players semi-understandably balk.
On the other hand, without exposure to end users, the utility-driven pace of change is going to be glacial (by which I mean, we won't have glaciers anymore either).