How much do we have to pay people to NOT use electricity – up to 30 times more?

To get the real value to us of electricity, consider the price that people will give it up. “Demand Response” is the nice euphemism for a voluntary blackout.

If I read this graph correctly, look how fast the prices rise, and how small the response is. For example, in South Australia there is only about 10MW available at less than $300/MWh? (From this AEMO report).  For reference the  total SA demand is around 1500MW. So 10MW is less than 1%.

(See below for the

Consider how few people are willing to turn the electricity off:

AEMO expects there to be approximately 50 MW of demand response in NSW when the price reaches $1,000/MWh.

The total size of the NSW state market is about 10,000MW. Retail electricity sells for $250 — $470MWh (and only $100/MWh in the US). Hence when the price hits two to four times the normal retail cost of electricity, only about 5% of the market say they will willingly stop using it.  When the price hits $7500MWh another 2% will give it up. We can’t take this reasoning too far, but the message is clear that the pain of giving up electricity costs […]

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February 16, 2018 at 12:25PM

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