Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
The De-Commoditization of the Kilowatt-Hour Lessons from produce, supermarkets, and...
The De-Commoditization of the Kilowatt-Hour
Lessons from produce, supermarkets, and the rise of Whole Foods
- Peter Bronski
For years, decades, even a century, retail residential electricity consumers like you and me have used kilowatt-hours as a commodity. We treat them as uniform and fully interchangeable. One kilowatt-hour is as good as the next. And within a respective geography and with some exceptions, we pay a single price per kWh without regard for where that kWh is generated (down the street or hundreds of transmission miles away), how it is generated (from coal, natural gas, nuclear, wind, or solar), the time of day or night at which we use it (and the relative supply and demand at that time), how much of it we use, and myriad other factors.
Those inside the electricity industry—regulators, utilities, grid operators, wholesale generators—of course know that every kWh is not created equal, though most customers consume them as if they are. But the days in which the kWh can be treated universally as a commodity on the retail-facing side of the industry are coming to a close. I’ve seen it happen in other industries.
LESSONS FROM THE WORLD OF SUPERMARKETS
...Not all that many years ago, supermarkets were to consumers what utilities are today: purveyors of commodities, whether produce such as fruits and vegetables in the case of the former or kilowatt-hours with the latter. Pick your produce—corn or tomatoes or apples or whatever. They each used to be, by and large, a commodity. Prices tended to be relatively uniform and stable, and no matter where you did your grocery shopping, an ear of corn was an ear of corn, a tomato was a tomato, and an apple was an apple.
<snip>
AS FRUITS AND VEGETABLES GO, SO DOES ELECTRICITY
Fresh ProduceThe kilowatt-hour is well on its way down the same road traveled by supermarket produce. Concerns about climate change and carbon emissions, the rising cost of fossil-fueled energy (whether electricity or other sectors) and its economic impacts, and a desire for both energy independence and reliability are all fueling customer awareness, pulling back the veil on the kWh-as-commodity. Suddenly, how, where, and when a kilowatt-hour is generated matters.
The evolution of net metering, time-of-use pricing, third-party renewables...
Lessons from produce, supermarkets, and the rise of Whole Foods
- Peter Bronski
For years, decades, even a century, retail residential electricity consumers like you and me have used kilowatt-hours as a commodity. We treat them as uniform and fully interchangeable. One kilowatt-hour is as good as the next. And within a respective geography and with some exceptions, we pay a single price per kWh without regard for where that kWh is generated (down the street or hundreds of transmission miles away), how it is generated (from coal, natural gas, nuclear, wind, or solar), the time of day or night at which we use it (and the relative supply and demand at that time), how much of it we use, and myriad other factors.
Those inside the electricity industry—regulators, utilities, grid operators, wholesale generators—of course know that every kWh is not created equal, though most customers consume them as if they are. But the days in which the kWh can be treated universally as a commodity on the retail-facing side of the industry are coming to a close. I’ve seen it happen in other industries.
LESSONS FROM THE WORLD OF SUPERMARKETS
...Not all that many years ago, supermarkets were to consumers what utilities are today: purveyors of commodities, whether produce such as fruits and vegetables in the case of the former or kilowatt-hours with the latter. Pick your produce—corn or tomatoes or apples or whatever. They each used to be, by and large, a commodity. Prices tended to be relatively uniform and stable, and no matter where you did your grocery shopping, an ear of corn was an ear of corn, a tomato was a tomato, and an apple was an apple.
<snip>
AS FRUITS AND VEGETABLES GO, SO DOES ELECTRICITY
Fresh ProduceThe kilowatt-hour is well on its way down the same road traveled by supermarket produce. Concerns about climate change and carbon emissions, the rising cost of fossil-fueled energy (whether electricity or other sectors) and its economic impacts, and a desire for both energy independence and reliability are all fueling customer awareness, pulling back the veil on the kWh-as-commodity. Suddenly, how, where, and when a kilowatt-hour is generated matters.
The evolution of net metering, time-of-use pricing, third-party renewables...
http://blog.rmi.org/blog_2014_01_14_de-commoditization_of_the_kilowatt-hour
