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

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

#81

Post by amluto »

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.

I admit I’m confused by negative pricing. Presumably solar can be curtailed for free.

But with something like wind, I think production is all or none, and switching back and forth is a bit slow. It’s more economical to pay a tiny amount to get someone to dump the power.

On a smaller scale, it’s common for off-grid hydro to have a giant heater waste power as needed.

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

#82

Post by citrablue »

jartelt wrote: post #26
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.

Exactly - this will finally make them think twice about installing more generation capacity and will force them to consider installing battery storage or other solutions to fix issues on the grid. These non-generation solutions exist, but utilities love to just install more generation because it's in their playbook and they don't want to innovate.

> utilities love to just install more generation because it's in their playbook and they don't want to innovate.

I'm curious, how did you reach this conclusion?

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

#83

Post by sounds »

brendog wrote: post #46

the key to solving this problem is a communications link between the supply side and the demand side. It's crazy that there's a complete disconnect between something that consumes power (that in many cases could delay it's consumption until a time when there was excess capacity, or at least make a more informed decision) and the supply side. I started episensor in Ireland and we've been working on this problem for ma…

To add to that, this recent article on HN [1] goes into a lot of great detail on how the economics of a home solar installation are part of the problem.

Basically, if there were an incentive for residential solar installations to include a little bit of storage capacity, it would be a net win for the entire economy.

[1] https://syonyk.blogspot.com/2018/05/why-typical-home-solar-s...

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

#84

Post by DoctorOetker »

mtgx wrote: post #34
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…

If they can produce so much cheap energy, doesn't that balance out with the more expensive batteries they have to buy? (which will only get cheaper in the years to come)

there is the crucial difference that batteries wear out, so you have to buy new batteries.

storage space for products or bulk matteer does not typically wear out (or not nearly as fast).

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

#85

Post by nostrademons »

rwcarlsen wrote: post #68
nostrademons wrote: post #54

Earlier quoted context omitted.

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.

Neither of the alternatives you propose are what we currently have or are where we are currently heading (IMO). As long as we are speculating - I think a future with good storage tech and 100% solar+wind would be better than one with gas plants thrown in the mix. If climate change is as big a deal as people claim, than why would we sacrifice existing non-carbon-emitting capacity for natural gas? We don't currently ha…

The article suggests that solar + wind with natgas for peaks is exactly where we're headed. At least in the regions being talked about (mostly Europe + California).

The Forbes article you linked is about New England. New England will probably be the last region to get decent renewable adoption. Solar panels don't work as well because they're far north and get a number of cloudy days, the winds are not that strong outside of the Cape Cod and certain parts of the Maine shoreline, and there are few rivers that are suitable for hydro.

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

#87

Post by woodpanel »

DoctorOetker wrote: post #58
floatrock wrote: post #48

Earlier quoted context omitted.

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.

> In the long run it should pay itself back.

So in financial terms wouldn't this mean a rather weak profit margin? Plus the relatively high-risk that flood energy might not always result in free or negative energy prices gives it a bleak risk-to-profit ratio.

In other words, there would always be something more utilizable to be done with excess energy (e.g. mining bitcoins etc. and buy water with it when you need it).

PS: But I like the main point you make, to take in more aspects when calculating efficient renewable energy systems. Not a crypto-investor (or even believer).

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

#88

Post by xigma »

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…

> Basically this is a problem because a bunch of existing incumbents are probably going to go bankrupt, or at least have to write down a lot of capital equipment and invest in new technologies.

That's not how it works. In Germany, the government subsidizes farmers to put up Windfarms, then forces the electric companies to buy the electricity at an inflated price, which those companies charge their customers for. As a result, energy prices in Germany are almost doubled for citizens, whereas companies get to have exemptions, of course.

Then they need to sell surplus energy for negative money when production is too high and import (often nuclear) energy from neighboring countries when it's too low. While they did get rid of most (domestic) nuclear energy, essentially the same amount of fossil fuel is still required to maintain the baseline.

It's utter nonsense, but the Germans get to pat themselves on the back for being so green. Well, except for all that coal energy that also needs subsidies because of those poor coal workers...

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

#89

Post by bluGill »

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.

Negative prices a perfectly possible in the ideal free market. The market of course requires the overall prices be positive, but given the very low ongoing costs of wind/solar it makes sense to build even if prices are sometimes negative - the alternative is to shutdown, but then the wind/solar operator needs to do something with that power, which in itself has costs. So long as the times the times of positive prices balance out you are fine with some negative.

In addition, there is probably some advantage to encouraging other parties to develop uses for cheap power as part of long term planning.

Of course as others point out nothing is every an ideal market.

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

#90

Post by bluGill »

mabbo wrote: post #86

Sounds like a great time to be building Tesla-style battery stations. Get paid to take in energy when it's flooded, get paid to output energy when it's not flooded.

Sounds like it, but as always the devil is in the details...
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