Will Demand-Based Electricity Pricing Solve California's Energy Crisis?

Or will the cost of metering kill an effort at reform?

4 min read

25 August 2004--Proving that even people who have seen the extremes of energy shortages have short memories, Californians broke their own electricity usage records this summer, topping out at 44 872 megawatts on 12 August. (And that figure doesn't even include the cities of Los Angeles and Sacramento, which operate their own grids).

As recently as 2001, Californians faced the threat of 30 to 50 days of blackouts, and with some price incentives, they responded by cutting their consumption. But as soon as the immediate threat disappears, consumers' incentive to conserve energy diminishes, and demand returns to treacherously high levels. With more than 33 million residents, California is the most populous state in the U.S., and is expected to add another 16 million people by the year 2020, necessitating a long-term solution.

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This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

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