Electricity: personal reflections

 This post follows on from a previous one about the cost of marginal electricity. I wanted to expand on a point I made there about a carbon tax.

          The problem is that some of us don’t have that much electricity to move. I use 4 energy-saving 60W bulbs, a PC and a laptop, a fridge and a microwave (to reheat food I usually cook on Sunday), all of which need to fit into my evening and can’t be moved. Over the course of the evening (5-10pm, peak period, assuming I’m home) that’s perhaps 3KWh, with my daily electricity usage not much bigger; no more than 3.5KWh in total. Average daily usage is maybe 12KWh per household, but since about 1/3 of households are unoccupied (26.7m households, 18m families, with some 330k households containing multiple families) daily usage in occupied homes is more like 16KWh per household.

          I do use more energy than just my electricity bill. I never use heating, but my shower uses hot water from the gas boiler, which I assume requires about as much energy as an electric shower, so that’s an extra 1.5KWH every day. In contrast, average households use four times as much energy from gas as from the mains electricity supply. The average consumption per year is 16MWh/household, or about 60 KWh/day for occupied homes.

          This is where the real savings are, which is why there has been a lot of focus on insulation and double-glazing, to cut heating bills.

          As we broaden our horizons beyond electricity to a more holistic view of energy usage, we see far more opportunities for savings and personal decisions. This is why a sensible carbon tax is so important. With a carbon tax that treats carbon dioxide emitted from beef production, car driving or lights treated the same, we can all prioritize our lives sensibly. We shouldn’t need to use complicated carbon calculators to guess whether our actions make sense or not by giving information on a myriad of different aspects of our lives. A sensible carbon tax, universally applies, would ensure that the markets deliver what we need, and that we can balance costs across our lives.

          Without this ability to compare and balance costs, we can get sidetracked by relatively unimportant concerns. For example, electricity, although important, is not as important as heating or transport. Turning lights off, or using energy-saving bulbs, is important because there is no significant cost in doing so, but is far less important a saving than some others, such as turning the heating down and wearing a jumper.

          Meaty diets emit more carbon than vegetarian diets (5.6 kg CO2/day compared to 3.8 kg/day. However, about 40% is from fertilizer use, and some figures add a large amount to account for deforestation. Organic home-grown meat avoids a lot of this cost. For example, the EU has an average CO2 emissions for beef of 12 kgCO2/Kg beef, but Brazil is more like 23. Beef is 10-11 times more carbon intensive than other meats, and the same source shows that North American crops can have carbon intensities of over 1 KgCo2/Kg food (because there are values over 1 of tonnes of CO2 per hectare, and example productivities of similar values of tonnes of grain per hectare). It is clear that the source of the food is very important, and simple divisions of meat or cereal are not sufficient. Emissions in the UK from agriculture are 9% of our total, of which over half is fertiliser and 30% from sheep and cow waste, including uncovered slurry pits.

          I eat meat, producing an extra few kg of Co2 a day. But that meat powers my bicycle and stops me needing to heat my home. Gas produces 0.203Kg CO2/KWh, so by saving all heating costs (let’s call it 2/3 of the heating bill, the remaining 1/3 going on the hot water I do use) I save 8.1 KgCO2/day.

          Estimates are that roughly 1/3 of national energy usage is on transport. Cars emit on average 14.3kg of CO2 per gallon of petrol, and cars, vans and motorbikes use about 12.6 million tonnes of petrol per year in the UK, and 12.4 million tonnes of diesel (all transport use is about 50 million tonnes, so personal transport is half of all usage; buses and coaches use about 1.2 million tonnes per year). If I return to the rough calculations, 1/3 of national energy use is transport, of which half is personal transport, giving us a national average of ½ our domestic energy use, or 30-40 KWh per day. I save all this in carbon by not driving to work, or even around after work. I don’t know how much the average person drives, but a vegan who saves no more than 3 Kg of CO2 per day over me on diet (and more like 2) would need to drive less than 10 miles a day (at 50mpg) in order not to destroy that carbon saving.

          My calculations show that it’s hard to track carbon. I’ve done quick and simple calculations using average figures, but these are only rough calculations. If I saw the cost to the world of my actions directly, through a carbon tax that directly affected by expenditure, I would be better able to live environmentally.

The cost of peak-demand electricity

Marginal production of electricity is charged to suppliers at about £10/MWh. This is the additional electricity needed beyond contracted-for generation because of short-term variability in electricity usage across the country.

This will soon increase to more realistic pricing, capped at £6,000/MWh.

Modelling by Cornwall Energy suggests that peak marginal prices will realistically reach £2,000/MWh.

Customers are currently charged £0 for marginal energy use, although large industrial customers can enter into capacity auctions by promising to reduce consumption, and they also reduce consumption at peak times because of transmission pricing rules, which are not specifically the cost of electricity.

          Households use an average of 4,192 KWh/year (DECC, 2013 figures) or maybe 4,600 KWh/year (Shrinkthatfootprint.com). This is different from typical energy usage because, as with many things, some large users distort the average. Typical usage figures are currently set by Ofgem at 2,500 KWh/year.

          I haven’t found data on average electricity usage in W or KW, but this can be calculated from power ratings of typical household appliances. Peak energy usage happens between 4.30 and 7pm in the evening, usually in winters when people have their heating going and maybe use some additional heating to warm the house further just after getting in.

          At peak periods, above normal usage from fridges etc., a person might have a dishwasher and washing machine going, at 1.5KW and 2.5KW respectively, and might even have an electric fire on whilst also taking a shower in an electric shower (2KW and 8KW respectively). Other possibilities include a towel rail, at 250W, a tumble dryer at 3KW, a hoover at 1KW, a kettle at 2.2KW and an oven or hob at 2KW.

          But let’s stick with the person having a shower and doing the washing at peak period. That’s 14KW of demand that could be moved to a different time, but we don’t price in KW; we price in the amount of time for which KW are being delivered, or KWh. Let’s assume that the shower lasts 15 minutes but the rest go on for one pricing period of 30 minutes.

          That’s 10KW for 30 minutes, or 5KWh. At marginal prices of £2,000/MWH that’s only £10. At normal electricity prices it would cost 75p. That’s how much it costs to turn extra power stations on; we are charged 56p to run the washing machine, 30p to run an average fridge for a day (over £100/yr; fridges vary from £50/yr to over £150/yr) and 30p for a shower. Of course, that doesn’t include water costs, or washing  materials and so on.

          It’s £10 extra that person doesn’t pay. His neighbour doing cooking, cleaning and ironing after coming home might only incur a £5 cost for 5 extra KW over an hour, at lower peak prices. It would probably be even less; maybe only £1, as the £2,000/MWh figure is a peak price, only applicable for one 30-minute period during the day. £400/MWh is likely to be the marginal price for a longer period, such as 3.5hrs in the evening.

          You might well be willing to pay £1 to be able to cook and clean when you want to, but that cost isn’t paid by the customer making that decision. The millions of people choosing to live such routinized lives incur a cost which is spread across everyone equally.

          As a final example, let’s think of someone putting the kettle on during an ad break on television. It’s only a bit of hot water, so it’s not worth much. At peak periods, 2KW for a minute is 1/500^th of a MW for 1/60^th of an hour, which sounds like a small amount, but at predicted peak marginal prices it’s about 7p extra on top of the ‘normal’ price (about 15p/KWh, or 0.5p). Tea bags range a lot in price, but Google just turned up some that cost less than £1 for 20 at a big supermarket. The hot water can cost twice as much as some tea.

          Electricity demand fluctuates by almost 20GW during the day, reaching a total of just over 55GW on a typical day. Variable demand is an essential feature of our lives, but it needs consideration separately from providing sufficient aggregate demand.

          It’s hard to judge how much electricity is peak demand; by eyeballing the national demand curve I can guess the area under the curve as about 10GWh per day above the typical daytime demand levels (probably an underestimate). That’s almost 0.4KWh per household, which gives us a good idea of how easy it would be to fix this problem. On average, we need to move 8 minutes of tumble drying to be after 10pm or at weekends.

          The cost of this peak demand is big. 10GWh at marginal prices of £400/MWh is £4m; for 365 days it’s £1,460m, or roughly 10% of household expenditure on electricity bills. Yet households have no incentive to change their behaviour, because that 10% is added to everyone’s bill, no matter what they do. For the average person with a bill of £600, it’s only £60. Yet all the fuss over the last few years about energy bills suggests that people regard this as a big issue.

          If we accurately priced carbon emission (noting that we have very little pumped storage and marginal prices are therefore often dictated by gas power stations) the price of peak demand would be a lot higher, reflecting the true cost. As we move to more renewable energy, with unreliable generation, we will need storage anyway, and storage would remove much of the problem of peak demand. If we had many reservoirs of the sort we already have, at a cost of a few billion pounds each, we could save the billions of pounds we spend each year adjusting electricity generation to demand. Early investment will create jobs and benefit industry in the long term.

          From a right-wing perspective, the poor market in which consumers subsidize each other and don’t pay the cost of what they’re using is distortionary and inefficient. We should let people see the costs and decide for themselves. From a left-wing perspective, the cross-subsidy between consumers destroys any incentive to behave well, reducing environmental behaviour and distorting investment decisions in electricity storage.

          I don’t know if people will voluntarily pay more for the convenience; after all, people pay over twice the price for a packet of crisps from a shelf by the till when they’re hungry, but rarely buy a multipack and save the other 5 packs for later. On the other hand, people have been outraged that energy bills are so high, and this convenience is worth 10% of our total bill. What I do know is that people should pay for their own convenience, or that we as a society should act in a coherent way to support our need for convenience by building energy storage.

 

Team Spirit - 60% proof and much abused

Harmony is important

          People care a lot about team harmony. It might be known as team spirit, morale, or something entirely different, but the concept is the same. A (relatively) new book, ‘Blamestorming’, is about harmony. Harmony is the outcome near the end of the chain of causality, and blamestorming is one way to destroy it.

            The purpose of having team spirit is trust, loyalty, collaboration and communication. For example, the Hubble telescope mirror was flawed because the contractors gave up reporting issues to NASA in order to avoid being told off. NASA was too hostile, and suffered because of it. Team spirit is touted as a miraculous wonder-cure that will boost productivity and make workers work long hours and do a good job. This is dangerous.

            There are many factors that contribute to team spirit, such as blamestorming, and too many people blame low morale on others without understanding the factors involved. No-one factor can be blamed or praised as the basis of team cohesion; there are many necessary factors, any one of which might ruin morale. I have one more under-considered item to add to the list: the focus on team spirit as an outcome or achievement.

Team spirit

Reporting

            A focus on team harmony destroys the reporting of problems or concerns as surely as straightforward hostility. It creates a culture of me-too yes-men with unquestioning enthusiasm. Enthusiasm might be uplifting, but it is the enemy of the rational. I can sympathise with managers who have a high opinion of juniors who always agree with them; the manager thinks he has a good point to make, and therefore thinks that a junior is wise who confirms that it is a good point. Sadly, reinforcement in decision-making is counter-productive. Perhaps this explains the finding that a focus on performance assessment by merit can increase discrimination; managers mistake agreement and co-operation for merit.

discrimination

            A need for team harmony discriminates ignores the existence of other characters, cultures, interests or attitudes. If everyone is expected to conform to certain behaviours, such as exhibiting a ‘can-do’ attitude, people who are not inclined or accustomed to such behaviour lose out. Most obviously, introverts are not enthusiastic or prone to display keenness and need to learn to fake it in many modern workplaces. But the problem goes deeper. It’s harder to engage with people not of one’s own background or interests, whether it’s as apparently innocuous as someone who doesn’t like reality television or football, through more sensitive subjects such as baby-talk, all the way to recognized issues such as religious difference.

The definition of management

            The solution is for managers to manage others, not to expect others to manage themselves. Specifying a need for team spirit passes responsibility from the manager to the manage, which is a symptom of poor management. If a person needs the manager to make an effort to communicate appropriately, this can never be a performance problem unless we accept the corollary: that people of similar character and cultural background to senior staff are better employees.

Hidden issues

            The need for team spirit can also open up criticism of an employee for a hidden, unacknowledged reason apart from race or culture. For example, an employee might work his contracted hours when the manager wants more time. An open, honest discussion about workloads and expectations would be far more appropriate, but harder ground to defend. It’s easier for a manager to conceal the issue with a fuzzy catch-all term.

            Perhaps an employee knows his own limitations and refuses extra work, or doesn’t volunteer for more. This might be good self-management, but a manager with tasks to complete could easily take out that frustration through criticisms of team spirit. Yet if the work won’t be done on time or to the correct standard if it’s squeezed in, it’s best to know early and prioritize properly. Again, that’s the job of managers; if employees had all these responsibilities, they’d be managers themselves, not juniors.

            It might be regarded as a lack of ambition to want to do your job well, and not do more, but that’s another vague term that means little. Objectives should, of course, be SMART; ambition to do whatever a manager throws your way doesn’t fit that description, and opens an employee up to abuse, as well as making him dependent on goodwill and a good relationship, when work should be formalized and defined.

Strong leaders

            In our societies we tend to have faith in strong leaders who know what is best, make decisions fastest and plough ahead, getting things done. Go-getting leaders don’t want to be held up by unenthusiastic underlings who are full of doubt and cynicism. This is understandable when we look at what are considered the opposites of these leadership traits: leaders who are ignorant, indecisive and unable to comprehend options, or who are lazy and incompetent.

            Sadly, though, these things are not binary opposites. Ignorance, incompetence and stupidity can masked by quick decisions and certainty at least as easily as they are disproven by them. In fact, someone demonstrating certainty and ease about a complex issue most likely hasn’t understood it well, given how uncertain complexity usually is, especially with the data often available about the issues.

            Error is far more common than certainty, but we still trust people who display certainty. We can guess that certainty is appealing because of its simplicity, which appeals to lazy minds that don’t want to work too hard; and we can guess that forceful decision-making reminds our subconscious minds of times when leaders needed to be people of instant action, fighting and hunting wild animals or other humans. The myth of the strong leader is a vast subject and a good book, but all that matters here is that good modern leaders are those who are highly aware of and enable the strengths of their teams.

Women and diversity

            This is the underlying reason why people suggest that we need more women on company boards. There is no reason relating to their sex, but because they are socialized to be more likely to display such leadership. Similarly, leaders should embrace diversity, not crush it, for the very reasons already mentioned: disagreement and difference flush out concerns and problems that need to be considered. These don’t necessarily come from people of another race or religion. Race and religion are merely commonly-measured markers of difference, but introversion or plain contrariness are no less important.

            The need for aspiring leaders to show certainty is a triumph of style over substance. Rather than evaluate leadership carefully, our lazy minds have found a marker than stands in for the wisdom and intelligence that we really need. The external sign has become the end in itself, over what was once realized to represent, and now we prize certainty and denigrate flip-flopping, or evidence-based decisions. Our leaders should always be ahead of everyone else, dragging them along behind, rather than getting the best out of everyone else.

            In some arenas, we’ve moved beyond such an approach to leadership. Military leaders must command from far away. Mountain leaders often walk at the back to help stragglers. But where leading is less related to the physical implications, the physical nuances of the word still dominate our approach, with leaders feeling the need to be at the forefront of everything.

            Just as the leadership traits we look for are style over substance, so too is looking for team spirit. Well-run teams are indeed harmonious, but teams without disagreement are not necessarily well-run. Artificial harmony can be created by stifling dissent and difference in a team or a leader’s mind.

            Good team spirit does indeed imply trust, openness, collaboration and possibly harder and longer work. But give managers a target to achieve team spirit, with a view to achieving these things, and they will, as in so many other things, chase the target and not the hard work that it is intended to measure. Harder work will become a means to judge team spirit rather than the other way round, and that is no way to build morale.

            If a company needs team spirit enough to make it a KPI or performance objective, it needs to ensure that the right people are being judged for it. Introducing accountability and defined objectives will always be in conflict with achieving good performance in the round. Team spirit is vague and oblique enough a measure not to be a good target, but defined enough to distract from genuinely good performance. Think long and hard (and don’t be decisive or certain) before making it your objective.