Power Explained

Power Explained

Put simply, power is generally sourced from a power station. Most power stations contain a generator, a rotating machine that converts mechanical power into
electrical power. While the energy source harnessed to turn the generator varies widely, the most common method is energy sourced through burning fossil fuels.

The electrical energy generated from these power stations then flows through transmission lines to distribution lines into households and businesses for lighting, heating and to power appliances.

Watt (W) vs kiloWatt-hours (kWh)

The most common terms we refer to when we talk about ‘electrical energy’ and ‘power’ are ‘Watt’, ‘Wattage’ and ‘kiloWatt-hour’. A ‘Watt’ is a unit of power and
‘Wattage’ refers to operating power, whereas ‘kilowatt-hour’ reflects a measure of electrical energy equivalent to the power consumption of one thousand watts for one hour. While ‘power’ is the rate at which energy is generated or consumed and measured in ‘Watts’.

Most appliances indicate a ‘Watt’ rating which reflects how quickly energy is consumed. When a light bulb with a power rating of 100W is switched on for one hour, the energy consumed is 100 watt hours or 0.1 kilowatt hours.

Energy Market

When households and businesses purchase energy from energy retailers they
typically pay for the following:

Energy grid access:Energy grid access charges are usually offered at a fixed dollar rate per day irrespective of whether or not the electricity meter is in use.

Transmission and distribution: When energy is transmitted from power stations to households and businesses, roughly 4% - 8% is lost through electricity wires and across voltage conversions and these costs are passed onto consumers.

Energy consumption: Energy consumption is measured through the volume of electricity (kWh) consumed. Household and business energy consumption charges reflect ‘Peak’, ‘Off-Peak’ and ‘Shoulder’ chargeable rates.

Peak: Peak rates are usually the most expensive rates and applied on weekday mornings and weekday evenings.

Off-peak: Off-peak rates are usually the least expensive rates and applied overnight on weekdays and all day Saturday and Sunday.

Shoulder: Shoulder rates operate between the Peak and Off-peak rates as indicated below:

A typical energy bill indicates total usage, which depends upon the volume of electricity (kWh) consumed across Peak, Off-peak and Shoulder rate periods.

Call to Action

Traditionally, energy has been generated through power stations using fossil fuels, and more recently, through renewable sources. While we have observed an acceleration towards renewable sources of power generation, most countries remain heavily reliant on power generation using fossil fuels because the significant up-front capital investment required in building a power plant can only be recovered over an average period of 20 years.

Therefore, a premature retirement of fossil fuel power stations will not occur without a compelling business imperative. While experts agree that significant climate change is unavoidable, unless drastic cuts in greenhouse gas emissions are made by moving away from fossil fuels as an energy source, we face an uncertain future. Considering the dire situation of our planet and environment (https://www.youtube.com/watch?
time_continue=4&v=VNe-jBVij-g), more action is required.

Additionally, when comparing electricity and gas prices with prior periods a concerning trend emerges:

Fortunately, the prices of solar and wind power are becoming increasingly competitive while fossil fuel resources are by their nature limited causing their
costs to rise. As more households continue investing in solar photovoltaics and rooftop solar batteries, we reduce our reliance on fossil fuels as an energy source and accelerate towards environmental rehabilitation.

With these trends gaining momentum, the world’s power supply continues to transform in ways we could only have imagined a decade ago. Technology and innovation is pushing traditional business boundaries to enable decentralisation, deregulation and decarbonisation.Decentralisation has transformed the way energy is produced and how it is
consumed.

Deregulation has allowed disruptor technologies to enter the market offering a range of energy solutions.

While decarbonisation has been the socially responsible driving force behind the adoption of non-fossil fuel energy sources. Advancements in micro-renewable energy generation and storage technologies have led to the proliferation of energy prosumers, typified by businesses and individuals generating their own energy via renewable sources with the prospect of reselling surplus energy.

In order to sell surplus energy across an online marketplace, a platform is required that empowers communities in creating a low-cost, zero carbon energy future.

Our Atlantic Power Ecosystem is that platform.