Dynamic Pricing, Electricity and Solutions

Dynamic pricing defined as a revenue management strategy where pricing is flexible based on current market demands.  Charging more for peak demand and less for weak demand.  Or a better way to describe dynamic pricing is charging the highest price when demand is high and discounting when demand is low.  Big business utilizes dynamic pricing in a variety of industries.  Prices for toll roads and express lane access fluctuates based on traffic density.  Using an express lane is more expensive during rush hour than it is at four o'clock in the morning when the roads are empty.  Ride hailing apps such as Uber have flexible pricing based on surges in demand.  An uber from an entertainment district is more expensive after the bars close than it is before the bars close.  Getting an Uber before or after a special event (concert, sporting event, etc) is more expansive than usual pricing.  Airlines utilize dynamic pricing to both stimulate demand and increase profitability.  Airlines charge more for advanced seat assignments and vary the price per seat based on location in the plane.  The middle seat in the last row near the lavatory is going to be less expensive than the aisle seat in an exit row.  People will pay a premium for the convenience of a nonstop flight and comfort.  Hotels charge more for rooms during natural disasters and special events in the community such as trade shows, concerts and sporting events.  Movie theaters offer discounts on matinee showings because they're not as popular.  AMC theaters even experiment with dynamic pricing based on seat desirability by charging more for prime seats in the center of a row, middle of the theatre and less for the seat in the corner of the first row.  You get the idea.  

Utilities have the unique ability to charge more for peak use consumption and offer discounts for use during off peak times.  Prices per kilowatt hour are less expensive in the middle of the night when demand is low vs being most expensive when demand is high during extreme hot or cold weather, or during a typical 9-5 working man's schedule.  Peak prices are also charged when most people get home from work and turn on their air conditioner and prepare meals on the stove or in the oven.  Charging an electric car at night is desirable because energy demand is significantly less while most people are sleeping and makes it less expensive while reducing grid strain. 

What if there was a way to cheat the system and pay less for electricity no matter when the price is high?  What if there was a solution that would allow power companies the ability to run their plants consistently and efficiently while reducing the need to spool up production during peak demand and curtail production when demand is low?  Electricity produced without a matched demand creates waste.   Electric companies need a way to create consistent production while eliminating the need to match production to the peaks and valleys of demand.  Tesla has partial solutions for the power company and the consumer; the Megapack and the Powerwall.

The Megapack is designed for use by electric production companies to store up to 3.9 megawatt hours of electricity in a battery the size of a shipping container.  The problem is Tesla limits the use of the Megapack charging to store power exclusively generated by intermittent renewable power sources such as windmills and solar panels.  Tesla does not want their Megapack being used to store electricity generated by fossil fuels or hydro electric power.  Why exclude certain segments of energy production?  Hydro-electric power is just as environmentally friendly as wind and solar; nothing is being burned in hydro-electric production.  A giant turbine connected to a generator is being spun by the flow of water, usually behind a dam.  Why not let fossil fuel and hydroelectric based producers install Megapacks to help them eliminate the extreme peak production by supplementing with stored electricity even if electricity is made burning fossil fuels? They're discriminating against fossil fuels.

For consumers, the Powerwall uses solar power to charge the battery.  The stored power in the battery can then be used to power a house during a power outage.  Or the wall can be activated to provide electricity to the house when electricity costs are high.  The battery then recharges when there is sunlight or during off peak and less expensive times of the day.  In theory, the power wall should reduce electric costs and also provide electricity when there is a problem with the grid.  You should be able to have electricity during a power outage assuming the battery is adequately charged and has the capacity to supply electricity to the house until it is sunny again or the electricity is available from the grid.  

All this sounds wonderful, doesn't it?  Until you realize one thing.  Elon Musk is not only a capitalist.  He is a green new deal advocate and wants to get people off of fossil fuels.  Tesla is not in the business of making energy production more efficient or affordable.  Tesla is in the business of transitioning away from fossil fuels, creating a byproduct of a deliberately missed opportunity to make traditional energy production more efficient, reduce pollution and reduce cost.  While this is a noble cause in these times of a manufactured climate crisis, he is missing out on another opportunity where Tesla could sell twice as many Powerwalls and Megapacks as they do now.  Tesla is only allowing their technology to be used exclusively with a solar arrays and windmills; thereby eliminating a far greater market consisting of everyone who doesn't have solar on their roof or produces electricity with environment destroying fossil fuels.  The time has come for Elon to do something more for the consumer than providing status and virtue-signaling while growing his business.

Why not make the power wall available to anyone and everyone?  Imagine having a Powerwall that charged during off peak hours and being able to take your house off the grid during peak times and run your house on the Powerwall instead of paying peak pricing for electricity?  You would be able to use electricity bought on the cheap when prices are high. The end user could then buy electricity when it's cheap and use it when electricity is most expensive.  The idea reduces electricity bills and the load on the grid during peak production/consumption times.  All you would need is a Powerwall connected inline to the input of the house to charge the power wall and a transfer switch that would drop your house from the grid and run everything off the energy stored in the battery.  Ideally, an application could be developed that could be programmed with the rates charged for electricity during peak and troughs and be programmed to charge during off peak times and the transfer switch programmed to utilize the power wall during peak times.  Another option would be to also have the app connected to a thermometer and have the battery activated during peak extreme temperatures.  A win for the consumer and the power company.  I'd even agree to the deal if the electric company subsidized it.  If the electric company subsidized the Powerwall, they could have the ability to remotely pull houses equipped off the grid to preserve production capacity for those without a Powerwall and still charge those without a Powerwall a premium for using electricity during peak periods.  A consumer could also buy electricity when it's cheap and use the power stored in their power wall when it's more expensive.  This would be a win for everyone.  The consumer with a Powerwall, the consumer without a Powerwall and the electricity company.  

Why aren't they using technology this way?  Or are they and I just don't know about it?   Someone should buy a Powerwall and build the technology to make it work described above.  Count me in for a Powerwall or similar device if it can be utilized in a manner to benefit all consumers and producers.