Faruqi: Dynamic electricity pricing operates like Uber surge pricing during critical grid shortages
Ahmad Faruqi · With Great Power: Why dynamic rates are gaining momentum · May 28, 2024 · at 11:49
Energy economist Ahmad Faruqi explains the fundamental difference between standard time-of-use rates and dynamic electricity pricing during peak grid constraints.
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“Dynamic pricing says, well, but on a hundred to 200 hours of the year, the system, the power system has a critical condition. There might be outages because there's a shortage of supply, and therefore in those few hours, 100 to 200 hours, we have to have even higher prices. And that's what creates a dynamic price. It's kind of like surge pricing that Uber has.”
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