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Energy: a new demand approach

Energy: a new demand approach

How much is it worth to postpone investments in the electric energy distribution area? Here's the proposition.

I Calculation references.

  • Assume an increase in the load factor of 5% of a distributor to its customers contracted on demand
  • Equivalent to enabling the same power grid infrastructure for about 2 years, to serve these customers
  • The investment in the power grid infrastructure is USD  0.7  Billion/installed GW 
  • The annual amortization of this investment is USD 100 Million/year/ installed GW
  • Considering the postponement of 2 years, it means USD 200 Million/installed GW savings

II How to increase the load factor by 5%

  • The proposal is a NWA (non-wire-alternative)
  • The power distributor offers a new service: "exchange of differences of contracted demands"
  • Customers who have excess contracted demand with respect to the recorded demand  "post" them on a specially designated transaction platform
  • Clients who have an interest in increasing their contracted demands "capture" the existing leftovers, enabling "swaps" with customers in the opposite situation
  • It's a zero-sum game.
  • Customers gain flexibility to change their contracted demands and this has economic value. 
  • The concessionaire postpones investments therefore alleviating its cash flow
  • It is a huge "win-win" 

If you would like to know more about this concept, please contact me. I am interested in transferring knowledge of this creation (which I called Demand Exchange) to "make it happen". This solution can be applied universally.

Rafael Herzberg's picture

Thank Rafael for the Post!

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