Whatever Became Of Peter W Connolly?

A Ripping Yarn

In October 1991 I travelled to Ternate, Indonesia. It is one the fabled Spice Islands  and now a beautiful speck in a modern day backwater. It was accessible from Java by spending four days on a government ship. There weren't many visitors at that time but I gather that's changed as Ternate is now a cruising destination. It was hard to imagine Ternate as central to European engagement  with Asia in the age of discovery and that it was from Ternate that Alfred Russel Wallace posted his essay describing a theory of natural selection, to Charles Darwin. It was also occupied by the Japanese during World War II which turned out to be  unexpectedly interesting and led to my curiosity in the fate of Peter W Connolly.

Ternate island is formed from an active volcano, also known as Gunung (Mt) Gamalama, rising from the ocean. I had ambitions of climbing Gamalama but as I didn't know a route, I set off speculatively. Part way along I met a couple of Indonesian teenage boys who offered to show me the way and a pleasant but strenuous day with them followed. One wore a pendant which resembled the dog tags American soldiers wear. The language barrier was high but he seemed not to understand the pendant's origin and was willing to part with it for a small sum. Importantly, the interest was all mine. He hadn't mentioned it or tried to sell it and nor, as far as I could tell, did these boys regularly interact with visitors. 

Soldiers wear two dog tags. When killed in battle, one is taken to record the death and the other remains with the corpse, so the boy's dog tag seemed likely to have been souvenired from an American soldier somewhere nearby and still missing in action. I knew little about dog tags, only a little more about  America's Pacific War and even less of Australia's involvement in the region. While fascinating, I was uncertain of the dog tags provenance. On returning home I wrote of the discovery to the American Embassy in Australia. There was no response and I stored away my tag, puzzled. As I sort through the detritus accumulated over a life time it surfaced again and I wondered if, in the age of the internet, more could be discovered.

Questions Arising

Is it actually a US military ID/Dog tag?

I've never seen one previously, I'd mostly guessed it to be a dog tag. In 1991 I couldn't check but now I can and it matches perfectly the style issued from July 1943 to March 1944. 

A sample dog tag set of the same style as Peter's.

Even the chain is the same, though it is shorter than the regulation 40 inches. That type of chain is common though and mine is attached differently than in the photo, so an alternative explanation is that the dog tag was acquired without a chain and a similar chain was attached. The chain on mine fitted over the head of the previous young owner but is too short to get over my adult skull.

Did Peter exist?

US army enlistment records for World War II were published in 2002 by the US National Archives and here is Peter's.

Field Title	Value	Meaning
ARMY SERIAL NUMBER	36329593	36329593
NAME	CONNOLLY#PETER#W########	CONNOLLY#PETER#W########
RESIDENCE: STATE	61	ILLINOIS
RESIDENCE: COUNTY	031	COOK
PLACE OF ENLISTMENT	6120	CHICAGO ILLINOIS
DATE OF ENLISTMENT DAY	08	08
DATE OF ENLISTMENT MONTH	04	04
DATE OF ENLISTMENT YEAR	42	42
GRADE: ALPHA DESIGNATION	PVT#	Private
GRADE: CODE	8	Private
BRANCH: ALPHA DESIGNATION	BI#	Branch Immaterial - Warrant Officers, USA
BRANCH: CODE	00	Branch Immaterial - Warrant Officers, USA
FIELD USE AS DESIRED	#	#
TERM OF ENLISTMENT	5	Enlistment for the duration of the War or other emergency, plus six months, subject to the discretion of the President or otherwise according to law
LONGEVITY	###	###
SOURCE OF ARMY PERSONNEL	0	Civil Life
NATIVITY	61	ILLINOIS
YEAR OF BIRTH	12	12
RACE AND CITIZENSHIP	1	White, citizen
EDUCATION	2	2 years of high school
CIVILIAN OCCUPATION	284	Janitors and sextons
MARITAL STATUS	6	Single, without dependents
COMPONENT OF THE ARMY	7	Selectees (Enlisted Men)
CARD NUMBER	#	#
BOX NUMBER	1066	1066
FILM REEL NUMBER	5.128	5.128

From this we learn Peter exists, he was an average American from the Midwest and his Army Serial Number matches my dog tag. He was Catholic with 2 years of high school education, enlisted in April 1942 as a private, was unmarried, 30 years old and previously worked as a janitor.

There is some information in the serial number. The first digit value of 3 indicates Peter was a draftee and the 2nd digit value of 6 indicates "Sixth Corps Area" which is odd because the VI Corp (United States) fought in Europe. There is no serial number range listed for the Fourteenth Corp Area. However, it was the  XIV Corp of the Sixth Army that fought the Pacific War, so the second digit value of 6 must mean the Sixth Army rather than "Sixth Corps Area". I haven't been able to discover the unit in which Peter served.

Was Peter Fighting In Ternate?

There was a Japanese garrison of about 1000 men and 350 naval personnel on Ternate when the 188th Glider Infantry, 11th Airborne Division, XIV US Army Corp mounted an assault on 1st of March 1945. They secured the Ternate area by midafternoon the following day with about 350 Japanese killed and most of the rest escaping to the islands interior (Smith, R. 1963). "US casualty figures could not be located but General Swing, the 11th Airborne divisions commander, stated that the battle cost the 11th division "significant casualties" - Swing comments, 10 January 57 (Smith, R. 1963)

So I don't know that Peter was in the 11th but he was in the Sixth Army of which it was a component and there was a battle in Ternate with significant US casualties. Peter could have been there.

Was Peter A War Casualty?

The practice was:- One of the two identification tags worn as prescribed in Army Regulations will be attached to the remains when interred. This includes any and all interments in the theater of operations the first battlefield interment, as well as the interment into a temporary cemetery for subsequent, final disposition. The duplicate tag will be removed at time of interment and attached securely to the grave marker about 2 inches from the top (Graves Registration, 1945).

The presumption is that if this is Peter's dog tag, he is still missing in action which can be checked against the US National Archives of WWII Army Casualties: Illinois - Cook County.

Extract from the US National Archives of WWII Army Casualties: Illinois - Cook County where Peter should be listed between Milton and Thomas if he was a casualty or missing.

He's not recorded as missing or deceased. The casualty records for the Ternate assault are incomplete and so is the WWII Army casualty list though the casualty list is mostly correct and he should be there.

This makes me think if Peter was fighting in Ternate he probably survived, but then why was his dog tag left behind?

Is The Dog Tag Fake?

Unlike coins, manufacturing dog tags is not considered counterfeiting and they aren't unique like a passport. They are a label to assist with identifying war casualties, like a label in a shop identifying an individual serial numbered product. 

On eBay you can buy "Genuine Dog Tags Id Military US Stainless Steel Army Dogtag" which are "Personalised" with your chosen text and I expect they are indistinguishable from one worn in combat but I wouldn't consider my one as genuine, despite the eBay definition, if it wasn't worn by Peter while on active service. 

This probably isn't Peter's first dog tag because his enlistment date was April 1942, this tag was issued after July 1943, and it records a tetanus shot in 1943. The likelihood that someone in the backwater of Ternate or thereabouts was manufacturing accurate souvenir dog tags and chains for a non existent tourist trade in 1991 embossed with accurate information that wasn't published until 2002 is low.

I think it's genuine.

Are There Other Records of Peter's Death?

There are overwhelming numbers of clickbait genealogy websites, with useful information mostly behind paywalls. I was defeated, so sought professional help from Sokit1966 who discovered Peter's birth date to be 23 Dec 1912 and located his obituary, confirming the accuracy of WWII Army Casualty records with respect to Peter.

Obituary - Chicago Tribune (Chicago, Illinois) · 13 Nov 1967, Mon · Page 42

Peter survived the war, married a woman with four children, fathered two more and survived to 55, so we now know Peter's dog tag wasn't souvenired from a corpse. We still don't know why he left it in Ternate.

Do Dog Tags Have Value?

They have sentimental value in militaria collections and probably to descendants but there is little commercial value as far as I can tell. 

Some people collect dog tags.

This one is listed on eBay as genuine from the Vietnam War at a mere A$25 plus postage.

A US Military Dog Tag advertised as genuine from the Vietnam War available for A$25 on eBay.

Given the huge numbers originally issued and the ease of manufacturing tags that are indistinguishable from those worn in combat, it seems unlikely dog tags will ever have significant monetary value.

What Was Resolved And What Wasn't?

The age of discovery led to European engagement with Ternate which eventually led to the arrival of the US army. The subsequent information age has made it possible to investigate a military artefact they left behind.

The artefact was likely worn there, in combat, by Peter W Connolly but the initial assumption he was still there, missing in action, proved to be false. How Peter's dog tag came to be around the neck of a teenage boy in a place Peter fought, 46 years afterwards, will probably remain a mystery, demonstrating that, as powerful as it is, even the information age has limits.

References

1.  Graves Registration, War Department Field Manual FM 10-63,  15 January 1945, Washington: United States Government Printing Office, p. 22. URL: https://ia800306.us.archive.org/35/items/FM10-63/FM10-63.pdf
2. Smith, R., 1963. Triumph In The Philippines. Washington DC: Office Of The Chief Of Military History Department Of The Army, p.352. URL:https://books.google.com.au/books?id=u9BQAQAAMAAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false

More Incentives To Bake Less Bread

Previously I pondered whether my local bakery will choose to make money or bread while there is a Covid-19 wage subsidy. They should be close to four times more profitable if they were to reduce bread production by two thirds. Now we rely even more on bakers altruism to get bread since the incentive to reduce baking has been further increased. Where the previous  rewards were provided from community resources, these new baking reduction incentives oblige landlords to chip in.

So far, I can report my local bakery has remained altruistic, or perhaps ignorant, and I can still get as much bread as I want at previous prices. While acquiring some of their delights yesterday I was able to check the assumption in the previous analysis that Covid-19 would not reduce sales.  They told me "on some days they are selling as much as $500 more than they would have expected and on other days less, but on average sales haven't changed".

The new incentive is an obligation on landlords to provide reduced and deferred rent. The Financial Review explains "In practice, if a qualifying tenant suffered a 30 per cent fall in revenue, then at least 15 per cent of total cash flow relief would be rent-free or waived and the remainder would be deferred." The Grattan Institute's program director of budget policy and institutional reform, who wants larger rent reductions funded by additional community assistance to landlords, says rent is usually 20% of normal costs. Updating the model for this new incentive gives the revenue distribution in figure 1 and profitability as a proportion of original revenue in figure 2.

Figure 1 - Comparison of bakery revenue distributions with Jobkeeper plus rent reduction scenarios. Source: Model

Figure 2 - Comparison of original profitability with Jobkeeper  and rent reductions
profitability. Source: Model

That gets absolute bakery profitability up by a factor greater than four so the bakery can generate more profit in the next six months of Jobkeeper  than would normally be achieved in two years. The landlord funded anti baking incentives are much smaller than community funded incentives but they make it a bit less likely the baker can ignore the temptation to increase profit and a bit more likely I'll have to eat less bread and more rice in a few months time.

Will My Bakery Choose To Make Money or Bread?

May You Live In Interesting Times

I delight in bread from the local bakery. The anticipation as I walk a few minutes from home to acquire the treasure, the smell of the shop, the choosing and the build in excitement as I head back home to savour the prize. It's especially good if it's still warm but will it still be affordable and available in the new world of wacky economic incentives?

Artisan Bread Is A Treasure

The bread is not much more expensive than factory bread and with everyone getting double the previous unemployment benefit or at least 70% of the pre coronavirus median wage it is a small luxury we should all be able to afford. I expect the demand for artisan bread will increase as the customer base sits at home pondering the delights of the next meal but the bakery owner has a strong incentive to leave  more than 30% of existing customers unsatisfied.

Without government incentive the bakery will be making at least as much profit as before and probably a little more but if turnover can be reduced by 30%  the bakery can make a motza. Flour is cheap so rent and wages would be most of the bakery's expenses, let's guess wages are two thirds. Staff work two shifts daily seven days a week and they are part time. From friends that have worked there I've learned they pay minimum wage, so the $1500 per employee will mean a pay rise for staff while taking out direct  wage costs for the bakery. There is still some staff overheads so overall staff expenses are reduced by perhaps 75%. The previous and new revenue distribution is shown in Figure 1.

Figure 1 - Comparison of bakery revenue distributions with two Jobkeeper scenarios. Source: Model

Profit before was perhaps 5% of turnover but now it is 11%. That is lot more profit as a proportion of turnover but on a 30% lower turnover, it's less impressive but still more dollars. But how is the bakery to achieve the turnover reduction? The best way is to increase prices but if a 30% price rise reduced bread sales by 30% turnover would be unchanged and the bakery still wouldn't get Jobkeeper. Assume prices are doubled to reduce by roughly two thirds the quantity of bread sold they open less days, then that will lower expenses again. Lets assume wage costs are halved again and other expenses are halved, but rent is fixed so that rises as a proportion of costs. This produces a fabulous 40% profitability but again on a lower turnover. The profit under all these scenarios as a proportion of original turnover is shown in figure 2.

Figure 2 - Comparison of original profitability with Jobkeeper profitability. Source: Model

There is still nearly four times the original total profit achieved.  In the next 6 months the bakery can generate as profit that normally would take nearly 2 years. How good is that? For the bakery great, but for me not so much. I'll probably have to go back to factory bread and if the factory responds the same way I'll be eating perhaps a third of the bread I eat now while paying twice as much.

I hope the bakery owner cares more about making bread than making money.

From 1988 - A Typing Service Plan

See: The plan.

I’m reviewing and disposing of detritus accumulated over a lifetime. It’s interesting to see what’s changed and what hasn’t. My engineering lecture notes of 35 years ago aren’t that much different to what my son, studying engineering now, is familiar with. The foundation subjects are pretty much the same but his handwritten lecture notes are less extensive. We used to take notes as it was explained, where now the notes are mostly online. Those notes were a useful reference for me, even years later but are useless now as the quality of search results is so much better than old lecture notes. To me, that the same things are taught 35 years later is an indication of the quality of what engineers learn. So much other stuff taught in universities 35 years ago proved to be  faddish. Amongst the detritus, I came across my plan from 1988 to start an international typing service. The internet didn’t exist, international phone calls cost the earth and fax machine adoption was growing fast.

Graph of adoption of fax machines versus time illustrates the actual and calculated adoption of fax from 1980. By 1994 approximately 59% of the potential market had actually adopted fax.  Source: Lyons, Michael & Adjali, Iqbal & Collings, David & Jensen, Kjeld. (2002). Complex Systems Models for Strategic Decision Making.

It was possible to rent a permanent satellite voice link to the Philippines for $A400 per day (A$950 in 2019 dollars) and send data over that link at the piddling rate of 9600 bps. Typist, even as a job description, no longer exists but typing services were big back then. Mostly the work arrived hand written and typists in the Philippines earned much lower wages than Australian typists. Modelling suggested it would be very profitable to provide an offshore typing service but the high fixed costs meant it had to be done on a large scale and  if I got it wrong and failed it would be painful. I also had the opportunity to move to an engineering role in the iron ore industry and that in the end is what I chose, so the plan was never tested.

Reviewing the plan with the benefit of 30 years of hindsight:-

1. It would have been exciting to have tried but the level of risk looks as scary now as it did then.
2. To minimise risk a slow start up strategy was planned that didn’t offer enough advantage to customers in the first instance. That in itself creates the risk that the service will never get to the stage where it works. If I did it now it would be boots and all or don’t bother trying.
3. The format which followed what I’d been taught at a TAFE business course still looks good.
4. In retrospect it would have been an opportune time for such a service. There was nothing like it and the technology it required was subsequently adopted widely. The early internet was only a few years away which would have reduced costs dramatically and typing service businesses lasted long enough for the service to have more than recouped costs. It might have been a good structure for adding other forms of outsourcing as they developed and translation is considered in the plan.
5. It was a comprehensive plan. I was trying hard to get everything right as a risk reduction strategy. A plan that detailed would change a lot in adoption but changes as they occurred could be made to the financial model to provide early indications of likely results.
6. Almost all typists were women with many leaving the job to raise children and not returning. This wasn’t controversial back then but it would be now.
7. Typists were earning about A$12 per hour at the time and the typing services were charging about A$25. The model estimated overheads of one third which I know for most businesses today is too low. I understand a rule of thumb is hourly cost is twice the hourly pay rate and CSIRO for example, when I was there was 2.7 times. Have overheads risen in the past 30 years or was my estimate too low? If double the hourly rate was appropriate back then typing services would have been struggling to make money at the prices they were charging.
8. Letters were expensive to produce back then which made them far more likely to convey useful information than the bumf we are deluged with today.
9. Mechanical typewriters no longer exist but it wasn’t that long ago and more than 80% of typing was done mechanically at the time. The use of word processing was predicted to double in the next year which is probably close to what happened, as mechanical typewriters disappeared fast.
10. Governments didn’t use external labour much in those days so typing for government wasn’t considered an accessible market. These days governments seem to outsource almost everything. The places I worked at the time all had typing pools and I still remember the fear of having to ask for something to be retyped to fix a drafting error. 
11. The marketing plan looks crude. I doubt that was ever my raison d'etre and I’ve since come to the view that quality marketing is usually more important than a quality product.

Paying People Not To Use Electricity - ACCC Submission

This is a response to calls for feedback on the ACCC Retail Electricity Pricing Inquiry - Preliminary Report^[1]. This response is intended to encourage the ACCC to look more closely at perverse forms of demand response. Background articles in this series are Paying People Not To Use Electricity - A Beautiful Scam, Paying People Not To Use Electricity - The Fatal Flaw and Paying People Not To Use Electricity - The Economics.

Thanks to colleagues at MakeHackVoid who provided advice on this submission, in particular Paul Harvey and René.

ACCC Submission

The ACCC Retail Electricity Pricing Inquiry - Preliminary Report ^[1] concludes demand response "has the potential to facilitate consumers reducing their demand at peak times, and could thereby reduce the need for costly new generation and network infrastructure."^[2]. Demand response though, takes many forms and the inquiry has thus far not considered a form of demand response that contains perverse incentives and which involves payment by volume for a volume that can't be measured. The preliminary report states the "ACCC will be mindful of the history of interventions in this market which have too often had unintended consequences to the detriment of electricity users." It is likely that the intervention in the  wholesale market to create mechanisms to provide payments to consumers and non consumption aggregators for not consuming electricity is  another of those interventions. The concept has got a lot of attention in the popular press^[3][4].

While not described this way by proponents the gist is to provide electricity to consumers at below cost and then pay consumers not to buy it. It is impossible to measure electricity not consumed so non consumption must be estimated from historical usage. This provides an incentive for consumers on fixed rate supply contracts to shift loads as far as practicable into times of high demand to maximise the payment for switching off, the opposite of what is desired. Air conditioners in particular could be more profitably run flat out whenever wholesale electricity prices are high as it is hot weather that causes wholesale price peaks and they provide a large load that can be switched off for payment. The argument for selling electricity at below cost is contained in a 2015 CSIRO study^[5]. It states,  "Consumers are particularly resistant to real-time pricing and (especially) capacity pricing, presumably on account of their greater novelty and complexity (hence, perceived risk), and pervasive mistrust and rejection of the concept that electricity should cost more depending upon demand."^[6] Therefore a "flat rate tariff offer with money-back guarantee achieves an unparalleled level of consumer acceptance, unmatched by any other combination of tariff and risk relief."^[7] Hardly surprising really, who wouldn't want to consume what they like at below cost and get paid if they don't.

The rational alternative for demand response is for retailers to sell electricity to consumers at cost plus a margin. This has the advantages that:-

• The amount consumed can be measured. 
• Consumers who choose to switch off can capture the full benefit of doing so rather than having to share it with a service provider. 
• Consumers can still seek assistance from a service provider when the effort of monitoring prices plus managing loads is too high for the benefit gained without assistance.
• The financial incentive is to shift consumption as much as practicable to times of low demand which aligns with the goal of reducing peaks in demand.

There is also a push to take this further and implement a scheme where non consumption of electricity can be used to increase prices for consumption of electricity by selling non consumption into the electricity market as if it was equivalent to electricity generation. The rationale for this is described in a ClimateWorks report^[8] where selling non consumption as if it were production is described as necessary because reducing consumption "has the potential to reduce market prices at peak times when the marginal generator is high cost. However the benefits of the reduced price are shared by all market participants and cannot be effectively captured by the DSR provider"^[9]. Therefore, non consumption should be able to be bid into the market as equivalent to generation which has the effect of increasing the wholesale electricity price.

There is an example of this being trialed currently. As reported in the Financial Review^[10], "Intercast & Forge have committed to deliver 10 megawatts of electricity off the grid when asked to by the Australian Energy Market Operator, for which it will receive $323,654 in funding from the Australian Renewable Energy Agency"^[10]. The "company had already saved $600,000 on their power bills in the past three months alone - from being on the spot market rather than a long-term contract with a retailer as well as turning their four furnaces off for a total of 39 minutes, normally for five minutes or less, during peak periods."^[10]

So this large consumer is already reducing demand during peaks by responding to price signals for their own economic benefit but is now to be paid extra to maintain consumption until asked to switch off. If that payment is to come from other electricity consumers through an increase in the wholesale price, as eventually intended, it can only result in a sub optimal economic outcome. It creates an obligation to maintain consumption when it is already uneconomic until asked to switch off, and an incentive to consume when uneconomic so as to have consumption that can be sold as available to be switched off. Funds extracted from other consumers through higher prices will be used to fund uneconomic consumption, to the detriment of other electricity users.

An attempt to introduce a demand response mechanism into the wholesale market was rejected in 2016. According to Finkel the "AEMC decided not to introduce the proposed mechanism on the basis that it would be costly to implement and that consumers can already contract with retailers and specialist providers, and can choose to be exposed to the wholesale market spot price through their retail contract"^[11]. The reasons given by the Australian Energy Markets Commission for rejecting this rule change request in the Final Determination^[12] under the headings "Demand response mechanism" and "Overview of determination to not implement the DRM" remain valid and should be considered by the ACCC in the interest of consumers. Finkel goes on to say "If unscheduled participation in the wholesale market as proposed in the 2015 rule change is not appropriate, there are other options in use around the world, including demand response participation in reliability markets in New York and Texas. The important thing is that a suitable option capable of unlocking the vital benefits of demand response is chosen"^[11].  The design of the NEM means the "suitable option capable of unlocking the vital benefits" is the exposure of consumers to the wholesale price and despite the claims of proponents "there are no DRM –like arrangements in any market that is designed similarly to the NEM"^[13]. Eastern Australia has a wholesale price, which can be 150 times the average price during peaks and many consumers, including Intercast & Forge^[10] are reducing consumption when the price of electricity is too high. Electricity plans that made wholesale plus a margin rates available to smaller consumers would make that opportunity available to all and encourage manufacturers to incorporate automation in devices that balanced desirability of device consumption against current price.

There is a variety of mechanisms suggested for paying people not to consume electricity but they all suffer the same fundamental flaw. The amount of electricity that would have been consumed in the absence of payment not to consume it is unknowable. Under a likely model, aggregators will be selling non consumption by volume into the wholesale electricity market when the volume can't be measured. In the interests of shareholders they will be obliged to sell as much as possible, so the aggregation business is likely to become another of those interventions with unintended consequences to the detriment of electricity users.

Further Reading

Some background material was also written in preparation for this submission which is available at blog.urremote.com

References

1. Australian Competition and Consumer Commission (2017), "Retail Electricity Pricing Inquiry Preliminary report", 22 September 2017, https://www.accc.gov.au/system/files/ACCC%20Retail%20Electricity%20Pricing%20Inquiry%20-%20Preliminary%20Report%20-%2022%20September%202017.pdf
2. ibid, pg 86
3. Charis Chang (2017), Households will be paid to reduce power consumption during peak periods, News.com.au, http://www.news.com.au/finance/money/budgeting/households-will-be-paid-to-reduce-power-consumption-during-peak-periods/news-story/5ce9fc72bdf789569d8069fdbdf45e39
4. Sheradyn Holderhead (2017), ARENA projects to prevent blackouts deliver 200MW of capacity to the grid, October 11 2017, TheAdvertiser, http://www.adelaidenow.com.au/news/south-australia/arena-projects-to-prevent-blackouts-deliver-200mw-of-capacity-to-the-grid/news-story/c9c3c7932d1d8797076d423d83786d09
5. Karen Stenner, Elisha Frederiks, Elizabeth V. Hobman and Sarah Meikle (2015), "Australian Consumers’ Likely Response to Cost Reflective Electricity Pricing", CSIRO, Australia, https://publications.csiro.au/rpr/download?pid=csiro:EP152667&dsid=DS2
6. ibid, pg 26
7. ibid, pg 6
8. ClimateWorks Australia (2013), "Industrial demand side response potential Technical potential and factors influencing uptake Initial findings and discussion paper",ClimateWorks Australia,  February 2014, https://climateworks.com.au/sites/default/files/documents/publications/climateworks_industrial_demand_side_response_potential_feb2014.pdf
9. ibid, pg 16
10. Mark Ludlow, Ben Potter, Angela Macdonald-Smith (2017), "Powershop, United Energy, metal foundry sign up for demand response trial ,Australian Financial Review, Oct 11 2017, http://www.afr.com/business/energy/electricity/powershop-united-energy-metal-foundry-sign-up-for-demand-response-trial-20171010-gyydxu
11. Dr Alan Finkel (2017), "Independent Review into the Future Security of the National Electricity Market: Blueprint for the Future, The Commonwealth of Australia, pg 148, https://www.environment.gov.au/system/files/resources/1d6b0464-6162-4223-ac08-3395a6b1c7fa/files/electricity-market-review-final-report.pdf
12. AEMC (2016), " (Demand Response Mechanism and Ancillary Services Unbundling), Final Rule Determination, 24 November 2016, Sydney, http://www.aemc.gov.au/getattachment/68cb8114-113d-4d96-91dc-5cb4b0f9e0ae/Final-determination.aspx
13. ibid, pg 18

Paying People Not To Use Electricity - The Economics

In the first article in the series on paying people not to consume electricity I identified the idea as a beautiful scam and in the second explored the fatal flaw. Here I examine the economics of paying people not to consume electricity.

The Economics Of Paying People To Switch Off

Retailers buy electricity in the wholesale market at a price that is set every thirty minutes and sell this electricity to customers at a fixed price that reflects an average wholesale price plus a margin (see IPART Report). Consumers are paying of the order of $0.20 per kilowatt hour (exc. GST ACTEWAGL ACT November 2017) but at times of extreme demand the retailer will be paying the maximum market price of $13.80 for that same kilowatt hour (January 2015). Therefore there is $13.60  saved if the consumer doesn't consume that kilowatt hour of electricity, a portion of which can be payed to the consumer to encourage that outcome. So the funds for paying people to switch off comes from the savings made by not selling them electricity at below cost in the first place.

It is impossible to know how much electricity hasn't been consumed unlike the emperor who had to suffer the  ignominy of overwhelming evidence.

The economics is made more complicated by it being impossible to know how much electricity would have been consumed in the absence of a payment. Therefore, an amount of electricity not consumed does not necessarily equal a reduction in electricity generated. It is hardly surprising then, that when AEMO ran a trial "the funding round had well exceeded the 160 MW initially hoped for, and cost less than expected". Ultimately there is no limit to the amount of electricity that isn't consumed.

Rational Economics

An alternative to selling electricity at below cost then paying consumers not to buy it is to sell it at cost plus a margin. This has the advantages that the electricity consumed can be metered and the price signals encourage consumers to use less when the price is high. It's also efficient, the consumer captures the whole economic value by paying nothing for what wasn't consumed.

Why Not Rational Economics? - One Reason

To quote from a 2015 CSIRO study titled "Australian Consumers’ Likely Response to Cost Reflective Electricity Pricing" demand response is not being structured this way because  "Consumers are particularly resistant to real-time pricing and (especially) capacity pricing, presumably on account of their greater novelty and complexity (hence, perceived risk), and pervasive mistrust and rejection of the concept that electricity should cost more depending upon demand." Therefore a "flat rate tariff offer with money-back guarantee achieves an unparalleled level of consumer acceptance, unmatched by any other combination of tariff and risk relief."

That is the same argument that was advanced when I was part of this team back in 2004. So there you have it, consumers "rejection of the concept that electricity should cost more depending upon demand", is the intellectual justification for paying people not to consume below cost electricity. Hardly surprising really, who wouldn't want to consume what they like at below cost and get paid if they don't.

Why Not Rational Economics? - Another Unspoken Reason

When I was working on this electricity was cheap reliable and intervals of extreme pricing were rare. Genuine improvements were hard. I estimated there was very roughly $100 per year of value available for a residential consumer with an air conditioner, who avoided price peaks. Capturing this value required new interval metering, new electricity plans, information systems to convey price data automatically to devices and devices able to respond to price signals. This is challenging to do for less than $100 per year and framing the problem this way makes it obvious. If you can frame demand response as people getting paid for "reducing the need for supply-side infrastructure" which "delivers lower electricity prices to all consumers" and also add some mystery it is far more salable (Reducing electricity costs through Demand Response in the National Electricity Market A report funded by EnerNOC).

The product companies could sell is non consumption of electricity as if it was equivalent to generated electricity. It is an excellent boondogle. In the  emperor story - "I'll send my honest old minister to the weavers," the Emperor decided. 'He'll be the best one to tell me how the material looks, for he's a sensible man and no one does his duty better.' The minister however, fearing for his own position told the weavers - 'Oh, it's beautiful it's enchanting.' The old minister peered through his spectacles. 'Such a pattern, what colors!' I'll be sure to tell the Emperor how delighted I am with it." Similarly the researchers would be more successful in obtaining support and in turn provide credibility for the boondogle. Over time the researchers and the demand response industry intermingled.

Another Trustworthy Official

From our story - The Emperor presently sent another trustworthy official to see how the work progressed and how soon it would be ready... He declared he was delighted with the beautiful colors and the exquisite pattern. To the Emperor he said, "It held me spellbound." The government sent their chief scientist who concluded in Recomendation 6.7 that authorities "recommend a mechanism that facilitates demand response in the wholesale energy market" (Finkel review - Independent Review into the Future Security of the National Electricity Market, Blueprint for the Future, June 2017).

Taking It To The Next Level

If there is success in reducing consumption it "has the potential to reduce market prices at peak times when the marginal generator is high cost. However the benefits of the reduced price are shared by all market participants and cannot be effectively captured by the DSR provider." (ClimateWorks Pg 16). So to make sure reducing consumption doesn't reduce price, proponents want to treat reduced consumption as increased generation.

Under current schemes, the savings for paying people not to consume comes from consumers being able to buy electricity at below cost. This limits the people that can be paid not to consume to small retail customers. This innovation provides a method of extending the opportunity to large consumers who don't get electricity below cost. They too, will now have an incentive to switch loads into peaks to raise prices until they too are paid to switch off. The opportunity exists because of the extraordinarily high multiple of peak to average prices of approximately one hundred and fifty.

Depending on the algorithm used to calculate the consumption estimate, it may even be economic to burn electricity just to create an inventory that can be switched off for a payment.

A Case Study

Intercast & Forge is one of 10 companies which have won tenders to supply up to 200 megawatts of "demand response" electricity to help keep the lights on in the eastern states of Australia this summer.

Intercast & Forge have committed to deliver 10 megawatts of electricity off the grid when asked to by the Australian Energy Market Operator, for which it will receive $323,654 in funding from the Australian Renewable Energy Agency. (AFR Oct 11 2017)

The "company had already saved $600,000 on their power bills in the past three months alone - from being on the spot market rather than a long-term contract with a retailer as well as turning their four furnaces off for a total of 39 minutes, normally for five minutes or less, during peak periods." (AFR Oct 11 2017)

So here we have a large consumer that is already reducing demand during peaks by responding rationally to price signals for their own economic benefit but is now to be paid extra to maintain consumption until asked to switch off. The obligation to maintain consumption when it is already uneconomic, until asked to switch off, can only produce higher prices for other electricity consumers and creates an incentive to increase the amount available to be switched off.

Paying People Not To Use Electricity - The Fatal Flaw

In the first article of this series I identified a beautiful scam. In this article I explore the fatal flaw that makes it possible. It wasn't obvious to me at first and given the community enthusiasm for paying people not to use electricity, it mustn't be obvious to most others either.

Without hearing the proponents pitch, people I've discussed this with have said that's daft I don't believe anyone would think otherwise, just as the implausibility made the emperors story unappealing when I was a child. However, my colleagues thought paying people not to use electricity was inspired. For me the concept is so obviously daft it defies belief that it could have lasted this long and grown into government policy

Once you know, it can never be seen the same way again. The genius can be admired but the wonderment is gone.

It led to this strange situation where I was trying to convince colleagues of what seemed an obvious truth and utterly failing. In retrospect I think, like Shawn Spicer's claim on the inauguration crowd, the greater truth was that if paying people not to use electricity was truly daft the personal consequences would be negative. It's better to prefer alternative facts. The other possibility is I was wrong and there is no fatal flaw. I've thought hard in the intervening thirteen years and I've not been able to devise nor have I heard a good counterargument. If there is no fatal flaw it would be painfully cathartic for me to learn the truth. 

The Fatal Flaw 

If you don't accept the fatal flaw as truth then everything in this series is waffle or perhaps there are multiple truths in accordance with epistemic relativism.

Everything hangs on this:-

• Contention: The amount of electricity that would have been consumed in the absence of payment not to consume it is unknowable.
• Corollary 1: The volume of electricity that would have been consumed if people hadn't been paid not to consume it can only be guessed/estimated. 
• Corollary 2: In any peak some consumers will consume less than estimated for reasons unrelated to being paid.
• Corollary 3: If you pay by volume for something that can't be measured people will sell you a lot of it.
• Corollary 4: A consumer not paying market price should consume as high a proportion as possible of their total energy at peak times so as to maximise the amount they will receive when responding to a request to switch off.
• Corollary 5: A consumer that can increase market price by not consuming should consume as high a proportion as possible at peak times while ever the increase in consumption cost is exceeded by payments for switching off. 

It is as simple as that but a lot flows from it. The whole purpose of demand management is to reduce consumption when electricity is expensive or more often shift consumption from times of high demand to times of low demand. However, the incentive scheme incentivises exactly the opposite until a payment is offered. As well, some would have switched off anyway, perhaps they were out that day.

So paying people not to use electricity means accepting their claims of how much they should be paid or at best guessing while incentivising behaviour that makes the problem you are trying to solve worse. All this when incentives could be aligned with desired behaviour by selling electricity at cost plus a retail margin.

Paying People Not To Use Electricity - A Beautiful Scam

Paying people not to use electricity is not on the scale of the WMD claim that justified invading Iraq but more exciting for me because I was there when the idea was born, just after that war. It started small and I expected it to die young but it has grown in stature to the point that it gets a mention by Sarah Hanson-Young on QandA, praise everywhere you look and there is now a demand response trial. The basic idea is to sell electricity below cost and then pay people not to buy it. Now that it's public policy, there's an option for the man in the street to climb on the bandwagon and win some pocket money extracted from the pockets of those that ignore the opportunity. Those that take advantage will be paid to help the wider community understand the fatal flaw, but anyone interested should do so fast as surely this one can't last long.

We are a nation blessed with an abundance of sun, wind, coal and gas and back in 2004 this was reflected in Australia having close to the worlds cheapest electricity. That was when a CSIRO team started work on the idea of paying people not to consume electricity. I was part of that team and for a short while shared in the excitement. Nobody is penalised or coerced into contributing to reductions in peak electricity demand but those that make the effort benefit. People can generate value by not doing something and get paid. What could be better than that? After a light bulb moment though, I could never view the idea this way again, it was so obviously daft. I pointed out the fatal flaw to colleagues and suggested we should try other approaches to demand side response. Other approaches though were boring, incrementalist and difficult to make cost effective at the low power prices of the time. Back then, I'd never have predicted that weaknesses in electricity industry oversight would be exploited so successfully that Australia now has close to the worlds most expensive electricity.

Growth in electricity prices over 10 years. Source: Rod Sims - National Press Club Speech, 20 September 2017. For a more complete analysis see a comparison of Australian and US electricity prices over time.

My colleagues were more prescient, the fashion for developing novel methods of extracting funds from electricity consumers was at its dawn. Electricity had been a boring industry for many years until that time. My insights got some support from my boss, who'd also been drafted into the project, but outright hostility from those in charge. They wouldn't confront the fundamental problem, and eventually I was no longer allocated to the project. I couldn't understand the hostility, I thought I was helping the team by suggesting we adjust our goals to avoid inevitable failure. In retrospect I've come to the view my colleagues were far wiser, they were pursuing a more useful truth.

A truth can be harnessed to achieve useful outcomes. A truth doesn't have to be absolute, true in particular circumstances is sufficient, even if that truth becomes untrue outside the relevant domain. We may scoff today, but Ptolemy's geocentric model for planetary motion was used to prepare astrological and astronomical charts for over 1500 years. No one scoffs at Newtons law of universal gravitation. It is a useful truth with continuing practical application but in Einstein's general relativity, gravitational force is a fictitious force arising from the curvature of spacetime. The most favourable outcome a research team can hope for in CSIRO is to be well funded and that requires exciting novel ideas. Boring incrementalist approaches will not be funded, researchers must promise something grander than anyone else. This is a fundamental truth, but everyone's proposals are grand so it's also impossibly hard. When there are many excellent weavers how does a weaver win the contract to supply clothes for the emperor. He must promise something others can not, the finest, best suit of clothes from a fabric invisible to anyone who is either unfit for his position or hopelessly stupid should do it. As a child I hated this story because I thought it ridiculous. I couldn't understand the desirability of keeping up the pretense. As I age, I find the truth it reveals to be profound. In the circumstances of the courtiers it truly was a beautiful suit, the quality of which contributed to their good standing with the emperor and continued well being. There can be no greater success in CSIRO than a world leading project that has managed to grow for thirteen years and become a major public policy initiative. It is a truly excellent project.

An emperors love of beautiful weaving provides for a great yarn which is often interpreted in different ways. A short and seemingly simple tale that's really quite deep.

The emperor looked a bit of a dill after the boy revealed a greater truth but he carried on with the parade. The weavers kept their fee and the emperor kept his throne, so no harm was done. Similarly when Hans Blix was urging caution, the best insider response was to ignore the doubts and discredit him. Those urging war would get to enjoy the spoils, so the existence of WMD was a useful truth even if it would eventually be mocked, much like the fate that befell Ptolemy's geocentric model. To maximise income from reducing electricity consumption in times of peak demand consumers must first shift as much of their consumption as possible to times of peak demand. This is the opposite of the purported aim. Paying people not to consume electricity will eventually lose favour but the emperor will carry on and the CSIRO heroes will keep their honors and promotions. Australians will pay a bit more for electricity but in truth, that doesn't really matter much.

Electric Unicycle Batteries And The Design Flaw That Makes Wheels Dangerous

Figure 1 - An Airwheel X8 in action

Summary

Electric unicycles are mostly safe but an instantaneous loss of power results in rider injury. Most wheels have a design flaw that causes this dangerous situation to occur as they age. A rider is likely to experience a rare and mysterious shut down on a wheel that was for a long time safe.

This study explains the problem and details investigations into two particular models, an unbranded el cheapo and an Airwheel X8. Both these wheels were flawed with the el cheapo failing quickly. It is possible to avoid shutdowns with the X8 by replacing the battery before it gets old and modifying the electronics can completely avoid low voltage shutdowns.

An interesting observation arising from the study was that adding a second battery in parallel should increase range by a factor of about three.

Introduction

Wheels at low speed are generally pretty safe as you can easily step off. The foot platform striking an obstacle is difficult because the riders body continues forward without the wheel underneath. Some quick foot work is required to get the rider's feet back under their centre of gravity but as they can push off the wheel platform it usually ends well. Motor shutdown on the other hand is dangerous and I'm not the first to observe this. I've experienced it four times and it always hurts.

Why Is Motor Shutdown Catastrophic?

Figure 2 -A shutdown looks similar to this

When the motor is driving forward, the riders weight must be forward of the wheel centre so that the torque produced by the rider matches the torque produced from the horizontal ground reaction as shown in Figure 3 .

Figure 3 - Stable forward motion

If that ground reaction is lost the rider will be hanging in space without a force to oppose gravity and will therefore descend face first as shown in figure 4.

Figure 4 - What happens when the motor stops.

It is worse than tripping over while walking as the rider can not push against anything to try and recover or reduce their rate of descent. No horizontal reaction force is possible. An exclusively vertical force through the feet, which is all that is possible, serves only to increase the riders rate of rotation about a centre of gravity which moves further forward of their feet as they approach the ground. Only hands can be used to break the fall. Hands, knees and sometimes the face will hit hard and suffer injury. The only chance is to pull the knees toward the chest faster than the rider is falling and throw the feet forward. I know its been done but I've never pulled it off. I find I'm already on the ground before I've realised what was occurring.

In this video a rider dismounts gracefully from an unpowered wheel by pulling one knee upwards as he is falling, planting his foot in front of his body and relying on forward momentum to lift his centre of mass above his foot. He is undoubtedly a talented rider but his starting point is one of balance rather than hanging in space and he doesn't have to realise during the fall that he needs to do the opposite of what he would normally do when tipping forward, as is required on a powered wheel.

Figure 5 - This minor scrape was from catching the foot plate and stumbling on the dismount. The shutdown injuries were much worse.

My Four Shutdowns

The first was on a wheel only two weeks old that had a cell in the battery pack fail suddenly, dropping the cell voltage below the shutdown voltage. If you buy the cheapest wheel possible, it will almost certainly have low quality batteries as they are a large proportion of the sellers total expense making battery skimping the easiest way to achieve low prices. This is what led to the hover board failures that made the news a while back.

Figure 6 - Low quality batteries can fail without warning and even catch fire. 

Stupidly, I replaced the failed cell with a cell that had protection which tripped out in use and that was the second shutdown. The wheel seller sent me another battery but took the el cheapo wheel back before the battery arrived. Next I went up market with an Airwheel X8 and had 18 months of trouble free wheeling. Oh what joy! I sensed the battery was aging, removed it to test and fitted the generic pack I'd been sent previously. First time I rode with the new battery it lasted well but the ride ended with a shutdown. I put back the aging battery which had tested as worn and had another shutdown early in the ride. This exacerbated the injuries from shutdown three that hadn't yet had time to heal. Shutdowns three and four were a mystery so some investigation was required.

How Are Wheel Batteries Managed?

The batteries are built from lithium 18650 cells connected in series and packaged with a battery management system (BMS) like that shown in figure 7 and listed on Aliexpress with the specifications in the appendix.

Figure 7 - A Battery Management System (BMS) for a wheel is packaged together with the 18650 cells. Note the 4 FET switches in the top left. Three of these are used to switch off power to the wheel when over current or under voltage is detected and the fourth switches off the charging current when the cells are fully charged.

The BMS manages cell balancing, charging and supplies power to the wheel through switches (FETs) that are switched off in the case of over current or under voltage.

On an X8 wheel there are four battery indicator lights. The number lit reduce as the battery discharges until, at the minimum acceptable voltage the wheel beeps a lot, flashes all four lights and goes into tilt back making it hard to ride.

The battery charger is not smart. It supplies a constant voltage up to its maximum current and shows a red light to indicate charging. The light turns green when the current falls low enough to indicate a full charge. The actual charging current is controlled by the BMS, not the charger. I hadn't realised this at first and, when the wheel was disassembled, ended up damaging the original X8 battery and the generic wheel replacement battery by charging through the discharge cable. This bypassed the BMS charge control and caused overcharging.

What Went Wrong?

It is under voltage that caused all my shutdowns and most other people's as well. The primary problem is a design flaw. Sure, we want to protect batteries from under voltage that will wreck them but it shouldn't be by injuring a rider. This flaw lurks always but will not be triggered by most usage scenarios. Normally the wheel goes into tilt back and the rider dismounts before low voltage shutdown occurs, however under certain circumstances shutdown will occur without tilt back. How this can happen is investigated in the following testing.

Method

The batteries were discharged at a low 0.2 amps rate and the voltage periodically measured. This data was overlaid on published test data for the Panasonic NCR18650PF cells, these being the type fitted to the  Airwheel X8. The voltage at which each battery indicator light changed state was measured and the voltage at tilt back and shutdown was measured.

Results

Figure 8 shows battery discharge data for the X8 battery before overcharging, after over charging and for the generic battery after overcharging. It also shows the per cell voltages for shutdown etc.

Figure 8 - Published test data overlaid with testing data of an aging cell X (black), aging cell after overcharging X (grey) and generic cell after overcharging X (blue). The discharge rate for the X tests was 0.2 amps.

The aged X8 battery is shown to be, as suspected, of significantly reduced capacity and was made worse by a single overcharge. The generic battery after one overcharge is shown to be of much lower capacity than the X8 battery after over charging. The shutdown voltage of the generic BMS was 3.56 volts which was higher than the tilt back voltage of 3.39 volts per cell.

Discussion

When the generic battery was fitted, the long first ride suggests the unbranded cells were quite reasonable. However that first ride was, from the outset, doomed to end in pain as the shutdown voltage was above the tilt back voltage. There would never be a warning before shutdown three. The generic pack had a shutdown voltage of 3.56 volts, the X8 pack was 3.22 volts and the AliExpress BMS advertises 2.1 volts which shows BMS specifications vary, so that even a pack of the correct voltage can't be safely fitted on any wheel. They must be matched. Also, the generic cells were ruined by a single overcharge.

Shutdown four is more problematical because the implication is that all X8s and probably most other wheels will become dangerous as the battery ages. The immediate cause of shutdown four is the damage sustained by overcharging, leading, under heavy load, to an instantaneous voltage drop from above tilt back voltage to below shutdown voltage. While this battery was prematurely aged by overcharging, all batteries will eventually suffer similar deterioration and battery capacity is also reduced when cold e.g in winter. In use this deterioration will happen slowly so shutdowns will be rare, occurring at first when climbing a bump late in a ride on a cold day, as the battery approaches tilt back voltage and becoming more common as the battery ages further. A rider is only likely to be aware of a rare and mysterious catastrophic failure on a wheel that was for a long time safe. All wheels with this design will eventually become dangerous.

Increasing Wheel Range

Another observation from Figure 8 is how little of the available battery capacity is actually used in the X8. At a likely occasional peak of 7 amps draw the wheel goes into tilt back at 1.25 AH which is less than half of the total energy available. Adding a second battery in parallel would reduce the current draw by half and avoid tilt back until about 1.8 AH. So changing out a battery when flat would double the range, but running a second battery in parallel will increase range by nearly a factor of three. With a single battery, I've always found range insufficient but two batteries in parallel would equate to about three hours riding time, by which time the rider is likely to be fatigued anyway.

Why Are Wheel Designs Flawed?

A BMS is used in most lithium battery installations for battery protection and the same logic is ideal for nearly all scenarios, excepting wheels. A battery control chip is required for every cell and the chips to do it are abundant. Ideally a wheel wouldn't do low voltage shutdown but that is what the available chips do. I guess wheel manufacturers have just gone with a standard BMS design. What they haven't done, in the X8 at least, is try and work around this limitation in the wheel control logic and they should have.

What Can Manufacturers Do?

The goal is to try to always get tilt back before shutdown and shut down slowly enough for a rider to react and step off. If there is to be a shutdown voltage, setting it lower, at the minimum cell voltage would help as it makes tilt back more likely to occur before shutdown. This would be 2.5 volts for the Panasonic NCR18650PF cells in the X8 rather than the current 3.2 volts. The 2.1 volt cutoff in the AliExpress controller meets this requirement but if 2.1 volts ever occurred in use it would damage the cells. What they really should do is, not allow battery cells to reach minimum cell voltage during riding without shutting down.

Avoiding minimum cell voltage can be done by reducing current sufficiently to maintain another voltage level below the tilt back voltage. For the X8 controller with the shutdown voltage already reduced to 2.5 volts, perhaps 2.9 volts would make a good minimum.  This only has to occur for a second or two as tilt back will already have been triggered. What the rider will experience is a reduction in torque, probably when it is most needed climbing an obstacle, followed by tilt back. This is far better than shutting down. The wheel will go from rigid to spongy but loss of power will be gradual enough for the rider to react and they will still be able to push horizontally against the wheel, making it possible to dismount.

What Can A Rider Do?

A careful rider can stay in the safe zone. Use quality cells and test a new pack before fitting as there are a lot of dodgy lithium batteries for sale. Store the wheel inside in winter and don't stop for too long in freezing conditions.Then monitor the cells as they degrade and replace them early. Replacing a battery prematurely is wasteful but better than suffering a shutdown.  Alternatively a rider could modify the BMS to bypass the FET switches so that the battery remains connected when the FETs switch off or connect the gate to the drain on the FET switches so that they can't switch off. This will eliminate shutdowns but also over current and under voltage protection for the batteries.

For the X8 wheel the battery capacity lights can be used to measure battery aging. From figure 8 it can be seen that, when new, the 4-3 indicator light transition occurs at 0.5 AH of discharge and the 3-2 transition occurs at 1.1 AH of discharge so there should be about the same ride time between
the two transitions. As the battery ages the 4-3 transition happens earlier but the next 3-2 transition remains about the same amount of time after the previous. This is what I'd observed in practice, 4-3 battery indicator transition was happening earlier in a ride as the battery aged and on the overcharged battery the 4-3 transition occurred immediately on commencing riding. Using data from the graph and the knowledge that I hadn't yet had a shutdown with the aging battery, it looks like a ratio of up to five in ride time between the 4-3 and 3-2 transitions is safe. At some point beyond that it becomes dangerous.

Buying Replacement Batteries Is Difficult

Replacement batteries are hard to locate so most people probably don't replace them. That would suggest there are a lot of old wheels around with dangerously aged batteries that will hurt their riders.

I've found only one supplier on Aliexpress. They don't specify which cells you will get which is annoying but at least they offer a low shutdown voltage of 2.75 volts per cell which improves on the 3.21 volts of the original Airwheel X8.

Figure 9 - Wheels can traverse fairly rough terrain

Appendix

Specifications of a wheel battery management system (BMS) listed on Aliexpress.