Power Worth Less Than Zero Spreads as Green Energy Floods the Grid • Hacker News Board

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#51

Post by mac01021 » Tue, Aug 07, 2018, 8:41 PM UTC

nostrademons wrote: post #40

DoctorOetker wrote: post #22

I don't truly understand this "problem". I understand storing the energy in batteries is currently very expensive economically and materially. However I believe there are plenty of "goods" (irrespective of if they are bulk materials, or partially processed products) which have a high processing energy per volume ratio (this does not need to be recoverable stored energy). Allow me to give an example: currently we have…

It's likely a short-term problem. There are plenty of ways to fix it (besides the one you mention, just shut down coal & oil power plants for good and replace them with technologies like natural gas or hydro that can easily react to spikes in demand), but all of the fixes require capital investments and time to build factories & tooling. Basically this is a problem because a bunch of existing incumbents are probably…

Is the responsiveness of an oil plant so different from a natural gas plant? Why? They're both essentially a furnace fueled by a flow of combustible fluid, right?

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#52

Post by xigma » Tue, Aug 07, 2018, 8:41 PM UTC

perl4ever wrote: post #28

bjoernw wrote: post #23

Earlier quoted context omitted.

Only if they stay negative

That's reasonable. The headline says it's spreading though.

It's spreading because the market is oversatured with renewables because of government subsidies. A sound investor would stop (or go bankrupt) when the negatives outweigh the positives.

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#53

Post by DoctorOetker » Tue, Aug 07, 2018, 8:41 PM UTC

ethagknight wrote: post #36

DoctorOetker wrote: post #22

I don't truly understand this "problem". I understand storing the energy in batteries is currently very expensive economically and materially. However I believe there are plenty of "goods" (irrespective of if they are bulk materials, or partially processed products) which have a high processing energy per volume ratio (this does not need to be recoverable stored energy). Allow me to give an example: currently we have…

With your desal example, I think a bulk of the energy requirement for desalination is building a pressure differential. That seems like it would be very easy to parallelize.. you don't need full on duplicative Desalination sites, you just need pressure vessels that can store large amounts of compressed air to take advantage of energy gluts.

I thought they used electricity to deionize salt water, the salts are already dissociated into positive and negative ions, so pass a current through the water, and every now and then raise the electrodes out, mechanically scrape it off or reverse current in dump brine to remove the ions...

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#54

Post by nostrademons » Tue, Aug 07, 2018, 8:41 PM UTC

rwcarlsen wrote: post #37

maerF0x0 wrote: post #5

> It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity. Good. That's a well functioning market economy. Those who make poor investment choices need to feel the sting of losses else the market fails to work correctly.

Low/negative prices (caused largely by various regulation/policies) have been putting a lot of economic pressure on existing nuclear power generation - sometimes causing it to close [1]. Generation that is largely replaced by natural gas plants. So maybe this very non-free-market state is actually not helping make forward progress on what many would consider to be one of the most important issues relating to energy -…

An energy industry where the bulk of energy production is wind & solar with natural gas plants to handle peak demand spikes is significantly more environmentally friendly than an industry where the bulk of production is oil & coal with a few nuclear plants thrown in.

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#55

Post by jabl » Tue, Aug 07, 2018, 8:42 PM UTC

MrRadar wrote: post #33

petermcneeley wrote: post #25

Can someone with a microecon background explain how this is possible? (My guess is that consumption is somehow completely independent of unit price and that its also inelastic?)

The key thing to understand is that the electricity market is unusual in that electricity can't be easily "stockpiled" the same way most commodities can be. This means it needs to be produced at almost the same rate it's consumed. Some types of generators have long ramp-up/ramp-down times so it can actually be cheaper to keep them running and pay someone to consume the excess power they're producing compared to how m…

Also some producers in some markets receive subsidies in the form of feed in tariffs (fit). With FIT and near zero marginal costs (e.g. wind or solar) you can bid a negative price and still make a profit.

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#56

Post by blihp » Tue, Aug 07, 2018, 8:43 PM UTC

perl4ever wrote: post #20

maerF0x0 wrote: post #5

> It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity. Good. That's a well functioning market economy. Those who make poor investment choices need to feel the sting of losses else the market fails to work correctly.

I think that negative prices are prima facie evidence of a market economy not functioning "well". Negative prices seem to me to be to be equivalent to fines for doing things that aren't socially useful. If they proliferate, that's a suggestion something is out of whack.

It depends on whether or not someone is able to demand delivery at that price and what other forces are in play. i.e. presumably there are regulatory requirements that some minimal amount of capacity must be available as generators typically can't quickly spin up based on the whims of the sun/wind... but what if the generator provides it and there are no takers which a zero/negative price would indicate? Of course that's not sustainable for long it becomes a persistent situation: at some point the generator must be subsidized, or can absorb a loss over brief periods for the 'privilege' of being a provider the rest of the time, or goes bankrupt.

Running parts of businesses at a loss isn't unheard of provided the governments responsible for overseeing it are OK with and/or mandate it (a wide variety of services to rural customers here in the U.S. comes to mind) and the impacted business makes up for the loss elsewhere.

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#57

Post by nachexnachex » Tue, Aug 07, 2018, 8:43 PM UTC

ars wrote: post #2

Last time there were "weird" issues with power someone was gaming the system: Enron. Something about this article just seems off to me, something isn't right from a technology point of view, and I suspect someone is manipulating things. (No, I do not have evidence. Just a feeling like this isn't such a hard problem to solve technically.)

> Enron

"Quien se quemó con leche, ve una vaca y llora."

It can seem weird to have an excess of power availability, but it's a consequence of electric power not being easily stored -- electricity is just a good energy _transmission_ system. While using electrostatics (batteries) is possible for storing very small amonts of energy, when you think at a state or country scale, it's just too much to store.

This means excess energy must be either immediately consumed, or transformed in order to store it. The most common storage system would be gravity -- build a pump right besides your dam, and pump water upstream so you can use it later when power is not readily available. There are already some reservoirs using this -- at least one in Wales and I've recently read they'd like to build one in Hoover Dam. It's not simple though, because usually water is left to fall yet another bit right after the dam, so a second reservoir right below the dam would be needed.

So, what does a negative price mean. As the article puts it, its a signal from the grid that it has no use for your energy, _right now_, as there's an excess of generation. But if untapped, wind and solar will be just lost, so why not offer it to the users.

As renewables continue to grow, probably more storages will get built that can buy that excess and this anomaly will cease.

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#58

Post by DoctorOetker » Tue, Aug 07, 2018, 8:43 PM UTC

floatrock wrote: post #48

DoctorOetker wrote: post #22

I don't truly understand this "problem". I understand storing the energy in batteries is currently very expensive economically and materially. However I believe there are plenty of "goods" (irrespective of if they are bulk materials, or partially processed products) which have a high processing energy per volume ratio (this does not need to be recoverable stored energy). Allow me to give an example: currently we have…

Capital costs vs. marginal costs. You're going to build a $100M desalination plant and run it for three hours a day? That's a ton of money sitting idle most of the day, far more than what is recovered with zero operating costs. (This is called the utilization factor -- how long a piece of equipment is used vs. staying idle) Ideally you want useful processes with low capital costs and expensive marginal/energy costs.…

Yes, depending on the timescale considered, the utilization factor of the plant should be weighed against the utilization factor of flood energy. In the long run it should pay itself back.

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#59

Post by aphextron » Tue, Aug 07, 2018, 8:43 PM UTC

rb808 wrote: post #29

aphextron wrote: post #3

Can someone please explain then why we are paying the highest prices in the continental US for retail electricity, at $0.28/kWh, in a state with the highest percentage of renewables in the country?

I can't say for sure, but quite likely renewables cause high costs like the article says. The problem is that electricity generators of all types have very high fixed costs. If you have a lot of wind and solar power its a problem that it ruins the profitability of the traditional generators half the year, so they need high prices in the other half to cover the capital costs. Also California isn't most expensive, seem…

>Also California isn't most expensive, seems pretty much the same as many blue states. https://www.eia.gov/electricity/state/

>Data for 2016

This lists California at $0.15/kWh. I've never paid even close to that anywhere I've lived.

The current PGE residential rate of $0.28/kWh [0] is about the same as Honolulu, Hawaii, where 100% of electricity is produced from burning natural gas and petroleum.[1]

[0] https://www.pge.com/tariffs/electric.shtml

[1] https://www.hawaiianelectric.com/billing-and-payment/rates-a...

Re: Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

#60

Post by darawk » Tue, Aug 07, 2018, 8:43 PM UTC

nostrademons wrote: post #54

rwcarlsen wrote: post #37

Earlier quoted context omitted.

Low/negative prices (caused largely by various regulation/policies) have been putting a lot of economic pressure on existing nuclear power generation - sometimes causing it to close [1]. Generation that is largely replaced by natural gas plants. So maybe this very non-free-market state is actually not helping make forward progress on what many would consider to be one of the most important issues relating to energy -…

An energy industry where the bulk of energy production is wind & solar with natural gas plants to handle peak demand spikes is significantly more environmentally friendly than an industry where the bulk of production is oil & coal with a few nuclear plants thrown in.

Yes, but we want the coal to be displaced. Not the nuclear.