
Watch the following 4:53 minute video about how electricity supply needs to meet the demand.
OK. So today, we're talking about electricity and very much the piece that is the supply needing to meet the demand. So this is very much a case where this has to happen. I can't have electricity storage in the wires. They would heat up. They would melt. That management is quite interesting. And so you have to have the electricity as needed. Now, the piece that's obviously missing is storage. And if we get that right, then we're on to a game changing scenario. But right now, we have pump storage primarily is how we do this.
So let me remind you of a couple of things. So I'm going to show you three cases of what the electricity demand looks like in the week. And so we have Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, and Sunday. And so this is some sort of measure of demand. And what typically happens is at night, we're using a little bit of electricity, but we're using some. We have these sort of weekly peaks. It might peak around four or six PM depending where you are. And then the weekend typically has a lower demand cycle. So along these lines.
I've drawn that to be relatively uniform. But if we just take a look, this is the lowest amount of electricity used during the week. And that would be the baseload. And, of course, maybe we'd have a day, that might have a higher usage than others, et cetera, et cetera.
But let's say that this is April in Pennsylvania. We don't use a great deal electricity. We are not heating. We are not cooling a great deal in Pennsylvania. We're still using lighting. We're still using hot water. We're still washing clothes, et cetera, et cetera. And, of course, industry is still running. This is probably why we see a reduction in commercial and industry over the weekend.
But if we look at some other cases-- let's go look at a case now where it is the demand for the winter season. And here we still see the same sort of ups and downs. Maybe there's a warmer day, colder day. And you can see that our base load is considerably higher. And we said this was winter, so let's say it's January. We're heating and some of us-- about half of us will use natural gas for heat. So that wouldn't come into here because this is electricity supply. But then the rest of us are using electricity and oil and other pieces.
If again, we do this for the summer. And so let's say, July, which is hot and humid and a bit rotten in State College, again we're going to see a very large peaking. Maybe it was a hot day. Maybe it was a cooler day. And we have a also much higher than the baseload that we had over here.
So what we've seen is there is considerable variability between the seasons. So we have a lower electricity use in April in Pennsylvania. We see a very significant-- almost a doubling, perhaps more than a doubling between the baseload and the highest generated need of electricity, highest electricity demand. Obviously, winter and the summer is where it might peak. In this particular case, we can see that the peak was actually in the summer, which is the case for Pennsylvania.
And so we have choices in how we get there. We've obviously seen that we can generate electricity with the fossil fuels. We can generate with nuclear and with renewables. But we need the policies to be in place so that we can achieve the right balance and have a stable, reliable, resilient grid where electricity prices are cheap. And so that's the next segment.
Now watch the following 8:19 minute video about how we meet the changing demand for energy.
So let's look at a little bit more detail about how we meet that changing demand. So let's just pick again. Let's pick a particular day.
And so here's our baseload. And we have a increase in electricity use. People are getting up, turning on coffee makers, making breakfast, turning on lights, having showers, using hot water, going to offices, turning on electricity. It reaches a peak.
They've gone home. They've turned on more appliances. They're cooking. And then there was a decline. And then it starts up the next day again. And so it might look something like that.
If we're in somewhere interesting like California, because they've got so many solar, you might see actually a reduction in demand right there, just at the peak of wherever noon is, as all the rooftop solar are maximizing their electricity production, and there isn't as much demand. But let's just ignore that.
So what do we use for the baseload? Well, for our baseload we want to use the cheapest electricity. And so here, in the old days that would be very much a combination of coal, nuclear, and hydro.
Now, we're limited in how much hydro we have in many locations. We're limited in how many nuclear power plants we have. And so we have a bit more flexibility in the number of coal-fired power plants that are producing electricity.
And so how do we meet this changing demand? Well, I don't want my nuclear power plant going up and down. It's not designed to do that. Hydro can certainly do that. But if we have a lot of hydro, we want to be using that hydro. And coal doesn't like to go up or down either.
And so we have a large number of plants operating. And so over some of these systems that cover multiple states, there might be 50, 60.
So this is the large coal-fired power plants that are running. And they might start off at 60% of their output and increase a little bit more. We might add a little bit more hydro coming into the system.
And so there was a system where which when it was regulated, we would control how we were meeting this electricity demand. And at the peak, we were paying much more for that electricity generation.
And so, again, in the old regulated days, this would have been natural gas because it was expensive. But we would turn on more power plants and more power plants. We would have the cheapest running the longest time and running at the higher capacity. And then we would turn more and more on.
Coal doesn't like to be turned on and off. And so we would use smaller and smaller natural gas peaking units, and we'd add more into the system. And so this was how we did things under the regulated.
And so even though when you pay for your electricity you had a standard cost, you can see that-- per kilowatt hour-- you can see that we have a variable cost going through the day.
So it was decided that we might be able to do better by going to a deregulated system. And so now, and in the change that we've seen if we take the same system, we have still our same baseload. But now, things have changed price-wise. So now we have significant contribution from wind as well as hydro. And that is growing.
We're likely to see solar come in. And solar, of course, is going to be coming in a particular contribution. It's not going to be running at midnight unless we have stored thermal solar, which we have seen with some of the concentrated powers.
We have nuclear still in the game. And that's producing as much electricity as these two pieces combined. Solar is not yet contributing very much in Pennsylvania to our total electricity supply.
But there are locations in the world where it's much higher. And there are places in the United States where it's much higher. And it's expected to grow.
We are still running coal. We are still adding in other pieces. But we have natural gas. And natural gas right now is very cheap. And so that went up dramatically, primarily at the reduction of coal.
And so now, as I'm writing this, it's about 30 something percent in each case. And so still heavy on the fossil fuels. But again, we're turning on the systems. But we no longer are able to just keep on turning more and more expensive units on because we have renewable portfolio standards.
And so now we have our wind and our hydro, which are now getting quite cheap contributing to our baseload. There's intermittency, obviously, in the wind and in the solar. And so that's problematic.
Again, I don't want to cycle my coal plants up and down. I don't want to cycle my natural gas plants up and down. And so we have an energy policy that was designed for this system that's transitioning into this system where we're competitively bidding in. And we need a system that's going to be reliant.
So here, everybody got paid/ In the regulated system where this is deregulated, if the system had a coal plant that wasn't used, everybody still got paid. It would have been used when needed.
Here, we're all bidding in when prices go up and down, then we have this system where we're checking very cheap. We're required to take some of our renewables. I'm requiring much more cycling up and down in these locations.
Again, we don't do it with nuclear. Nuclear is running a little bit harder. But every time the wind drops, then these other plants have to come in. Natural gas is very much that workhorse for being able to meet this changing demand. But there are limits on how much we have.
And so the advantage of this is that overall our electricity price is cheaper than we paid over in this system. The advantage of this system is the level of control. We have the ability to make decisions over the long-term and know what's going to happen ahead of time with our emissions and our prices.
But the policy side of this has yet to catch up. And, of course, the changing price of wind, and of solar. Anyway, those are the challenges that we face-- more in the lessons.
Here are examples of weekly electricity demand cycle for various months. Note that the day and time has an impact on demand. Also, these are averages so the variance due to weather (especially cold/hot days and holidays are muted). When you use electricity it has a very significant impact on the cost to generate that supply (the peak will be more expensive than the electricity generated for the trough).

What else influences the non-averaged electricity demand? Would California differ from Vermont? Does season, or weather impact usage, perhaps the economy? Our electricity management in PA is controlled by the PJM which is a regional transmission organization for the movement of wholesale electricity. It covers PA and parts or all of 11 other states.
We use a great deal of electricity regardless of the time of day. But there are daily and weekly influences. Most of us will sleep in on a Sunday when many of the factories and some of the shops are closed. We will also use less electricity at night when the nation sleeps (I know you are probably reading this well past midnight!) Think about the problems this demand cycle creates. We do not have a good method for storing electricity (with the exception of pumped storage and some emerging advanced battery options, more on that in the next lesson), so the supply must equal demand or it is blackout time. From the above graph, it looks like we need to go from the lowest output, which we call the baseload, to almost 1.7 times that value in a 24-hour period (July). We also need to do this safely (nuclear reactors do not like having to quickly increase or decrease output) and cheaply. Thus, the baseline electric load is generated by the cheapest utility sources that run 24 hours a day. As the demand increases, the generating capacity will be increased, and additional units will be brought online. Finally, if you need the electricity, the highest cost generators are turned on. With smart meters now being available, there are incentives to switch to using more of the electricity during the lower demand times as that electricity is cheaper to generate. So, dishwashing and clothes washing machines have delayed start options so they can be run at night.
The seasonal demands on electricity generation can also result in dramatic swings in demand. On cold winter weeks and hot summer days, the electric heaters or air conditioning units crank out hot or cold air 24 hours a day. So not only does supply need to meet demand but there needs to be excess capacity for those temperature extremes and to allow utilities to shut down for routine maintenance. The economy also has an influence. There is less pollution (lower electricity demand) during economic depressions.