I don't really understand why utilities are adverse, but agree they are. If they set the price signal correctly there are real benefits for the networks to encourage arbitrage.
A few key advantages that I think are particularly noteworthy:
1. Grid stability improvement: Battery arbitrage helps maintain a balanced supply and demand of electricity by charging batteries during low-demand periods and discharging them during peak times. This reduces fluctuations and enhances grid reliability, minimizing the chances of blackouts.
2. Renewable energy integration: The practice facilitates better integration of intermittent renewable energy sources, like solar and wind, into the grid. By storing energy when it's abundant and releasing it when needed, the grid can accommodate a higher share of clean energy, which reduces greenhouse gas emissions.
3. Peak demand reduction: Responding to price signals, battery arbitrage can strategically discharge stored energy during peak demand periods, alleviating strain on the grid. This reduces the need for new, expensive, and environmentally damaging peaking power plants.
4. Lower electricity costs: Battery arbitrage can contribute to lowering electricity prices for all users. By decreasing peak demand and minimizing the need for expensive peaking power plants, the average cost of electricity can be reduced in the long run, resulting in a more cost-efficient grid.
To harness these benefits, dynamic pricing structures like time-of-use tariffs or real-time pricing can be implemented by grid operators. These structures provide the right incentives for battery owners to participate in arbitrage, leading to a more efficient and flexible grid that's better equipped to handle the growing integration of renewable energy sources.
All true! I love using zero grid power during peak periods, and in fact exporting to the grid when it is most heavily loaded. Solar with battery completely destroys the utilities concerns about the "duck curve", the daily mismatch between solar production and power consumption.
And, don't forget about Virtual Power Plant, a program activated when PG&E could not generate as much power as it's customers are consuming. Rather than starting rolling blackouts, all of our Tesla VPP PowerWalls discharge onto the grid. Last year we helped prevent blackouts on around ten hot summer evenings, and were compensated $2 per kWh we supplied to the grid.
I am also a fan of NEM, net electric metering, whereby in effect we can import for free power we have exported to the grid. It is revenue neutral for the utility, and in fact saves them money. The point was to encourage solar. So the Calf utilities lobbied and succeeded in killing NEM earlier this year.
Why, you wonder. Solar, like energy conservation (think LED lights, home insulation, efficient appliances, etc) reduce demand for electricity. For utilities, the represents a lost revenue opportunity. Solar is a biggie, because a typical residential system generates about as much as the home consumes over the course of a year. So, for utilities, solar is the enemy.
Batteries are a slightly different story, but under TOU rates, battery owners can reduce their electric bills, i.e. reduce utility income. Utilities are guaranteed profits under the regulations, so the more they get to supply, and the higher the peak demand, the more profit they get. It is a perverse motivation, but strong. Hence the massive lobbying and political contributions to capture the regulators.
