Time of Use (TOU) pricing is a term used to describe a differential rate your utility can charge for electricity at different times of the day. TOU can help incentivize the use of renewables, and shift peak loads to help utilities in demand response. Effectively, that means the utility can incentivize people and companies to use electricity when there are cheaper forms of electrical generation available (wind and solar), and disincentivize it when it’s more expensive (and therefore less profitable for the utility).
One of the big challenges in the electrification of our vehicle fleet is that people get home from work and plug in, which, in terms of demand response, is the worst possible time to plug in. Electricity demand peaks in the evening hours, 6–9 PM, as everyone gets home and starts to cook, do laundry, shower, watch TV, play video games … and nowadays, plug in their cars.
This is why energy storage is the holy grail of the cleantech revolution. Here’s a microcosmic look at home energy use.
In this first screenshot from my Tesla app (which you get when you have a Powerwall), you can see that our energy use (in blue) bounces up and down throughout the day (refrigerators cycling on), and has occasional spikes (water heater backup electrical kicking in to top off our solar water heater tank). Then there are two more consistent increases — one during the middle of the day, and one in the peak time of use (after work):
If you then overlay the solar production from my roof, you see that, predictably, it produces very well when the sun’s out.
Layer on the battery (green), and you see that the sun powers the house during the day, then with any additional power, it feeds the Powerwall. The battery carries us through the night, discharging from sundown until the battery is exhausted, which, on this particular day, happens about 5 AM.
The grid provided electricity from 5 AM till when the sun came up, and got a bunch of power sent back to it during the afternoon, when the battery was full and the solar still producing more than we used in the home.
I mentioned that peak demand is in the post-work timeframe, so you may be wondering what the peak energy use during the middle of the day in the pics above represents. I have my EV plugged in to a timer, and that timer allows the car to charge between 10 and 5 during the day — 7 hours of trickle charge. This effectively provides another battery to store solar power, taking advantage of the “free” electricity. Our utility here gives us a credit of 10 cents per kWh for overproducing solar, and then charges my neighbor 35 cents for it. That’s the best deal that was available when I purchased my solar system, so the best thing for me to do is to charge my car during that time.
What that means for time of use and demand response is that, if we can figure out a way to plug in cars during the day, and not let electricity flow into them during peak times after work, it’ll help the grid and the cleantech revolution quite a bit.
New Podcast: Forecasting EV Sales And EV Battery & Metal Prices — Interview with BloombergNEF’s Head of Clean Power Research