A funny thing in the efficiency and utility segment is the constant confusion between power and energy, or between kilowatts and kilowatt-hours. Even among engineers who clearly know the difference, it’s interesting that people are still constantly confusing the two, or at least use them interchangeably in situations where you really can’t. A sure way to insult an energy engineer is to say they “can’t tell a kW from a kWh.
Technically, power (kW) is an instantaneous measure of the rate in which you’re using energy, while energy is a cumulative measure of how much of a resource you’re using. Confused?!
Another way to think of it is that our resources, such as coal or natural gas, store a certain amount of energy. The power you draw dictates the rate at which you are using this energy. If you draw more power you’ll use up your coal more quickly. If you use less power your coal will last longer. Obviously using less power is a good thing because your resources will last longer.
Turns out this distinction between power and energy is very important in the utility industry, and therefore effects how they run their conservation programs. As residential customers, most people are used to being charged by the kWh, a measure of cumulative energy used. A residential utility meter therefore measures the cumulative kWh you use in a given month, which is what the utility charges you for.
One of the chief goals of conservation programs is to reduce the peak power draw (kW) on the system, and not necessarily the overall energy used. The peak demand is what dictates how many power plants need to be running to service a population. Utilities that are trying to delay the construction of new power plants will look to reduce the peak power demand from their customers. For this reason, large energy users (such as commercial and industrial customers) will pay not only for the energy usage, but also for their peak demand usage. This gives a clear pricing signal to the customer to reduce peak demand.
A lot of utility energy efficiency programs will focus on reducing demand and will pay incentives based on reductions in peak kW – not kWh savings. Austin Energy and Southern California Edison are two examples I’ve found of utilities that base some incentives on kW reduction. Often this reduction needs to happen during times of peak demand to be eligible for incentives. Typically peak demand occurs in the middle of the afternoon on a hot summer day when everyone is running the AC. In contrast, here in the Pacific Northwest almost no one has AC but most people have electric heat, so demand peaks on cold winter days.
To illustrate this concept, here’s a peak load curve on a natural gas plant I found at natgas.info.
This topic came to mind as I’ve been preparing my materials for my talk at AFCOM, where I will be summarizing data center utility incentives to data center managers and IT professionals. I’m seeking different ways to explain these concepts in simplified terms so that industry members can understand the utilities’ motivation in running conservation programs.
This whole concept reminded me of a neat article I read a while back about an Arizona data center taking advantage of time-of-use pricing. The data center has installed a system that makes ice at night and uses that ice during the day to cool the data center. While systems like this don’t necessarily produce energy savings, they create a significant amount of peak demand reduction by shifting that demand to off peak hours (this approach is often referred to as “load shifting”). The local utility (Arizona Public Service Co.) charges only 2¢ per kWh for off peak energy and 13¢ per kWh for on peak energy. In this way, the company can save 11¢ per kWh (or 85%) on their energy costs by shifting the demand to off-peak hours (this is probably not quite true since there are likely some loses associated with the load shifting but you get the point).
One of the attractive things about the “smart grid” or “smart meters” is the ability for utilities to offer different prices based on time of use to residential customers so that consumers can reduce their individual peak demand. This would help further flatten the load profile, reduce the number of power plants needed to service the population and help make electricity production more efficient.
I’m sure that I, like others, will continue to interchange the words energy and power when talking about conservation, but it’s often important to recognize that difference when identifying opportunities to increase efficiency in the system.
Tags: Cooling, Data Center, Demand Reduction, Energy, Incentive Programs, Load Shifting, Power, Utilities
