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

bloomberg.com

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

#111

Post by classichasclass »

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…

That sure isn't what we're paying with So Cal Edison. The municipal supply I used to be on was closer, but municipal supplies tend to serve smaller numbers of customers by their nature, so I doubt they're pulling the average down much either.

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

#112

Post by ethagknight »

bluGill wrote: post #75
DoctorOetker wrote: post #53

Earlier quoted context omitted.

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...

There are two major ways to do it at scale: Distillation, or reverse osmosis. In large plants they are actually energy competitive - reverse osmosis needs pumps to build pressure. Distillation needs energy to boil water, but then that steam is cooled down with the input water which gets heated in turn. I'm not aware of any large scale ion plants, I don't know if the chemistry can work or not.

Or boil via vacuum

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

#113

Post by petermcneeley »

nostrademons wrote: post #76
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?)

Consumption and production are both inelastic and storage costs are high. Traditionally when a producer produces more of a good than consumers want to buy, the price drops, consumers buy more, and producers produce less. If consumption & production are both inelastic, consumers won't buy more and producers can't produce less. The excess goes into inventory, where it's treated as an asset and then sold (often at lower…

Right but Garbage almost certainly has a negative value so it makes sense.

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

#114

Post by thinkcontext »

dev_dull wrote: post #17
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 wonder about this as well. I think it’s time we start getting real answers from PG&E about why our power cost so much when apparently it’s so abundant. Even with solar they charge me $10/month to be hooked into the grid, even though they’re using that same connection to sell my excess premium renewable energy to others.

You act like you are doing them a favor, they would much rather not have net metering. I also have solar panels on my roof, though not in CA. Net metering is definitely a subsidy.

They credit you the retail rate for electricity not the wholesale rate they buy it at. And the grid acts as your battery, even though you pay the same grid maintenance charges as your neighbors who don't get that benefit.

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

#115

Post by rayiner »

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.

Investment into traditional generating capacity is not a "poor investment choice." To the contrary, it's a necessary one. For better or worse, a fundamental premise of modern electric grids is that they should be able to meet all needs essentially 100% of the time. Electrical markets are then built on top of that basic guarantee.

With current technology, that means you need sufficient generating capacity from traditional sources to cover nearly 100% of your peak capacity needs--otherwise, on a day where the wind isn't blowing and the sun isn't shining, you can't produce enough electricity.

Current renewables subsidies results in a broken market structure: the market needs conventional generators, but the subsidization of renewables makes it unattractive to build those generators. A "well functioning market economy" does not eliminate incentives to produce products that people need.

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

#116

Post by thinkcontext »

azeotropic wrote: post #105
thinkcontext wrote: post #61

Earlier quoted context omitted.

If you wait for power prices to be negative (or merely lower than usual) you are not getting an economic return on the money you put into the desalination plant when it is not running. Think about it, if you get a 100M Euros loan to make a desalination plant, how long will it take to pay that off if you only run your plant a few hours per day vs 24 hours per day. Whether it makes economic sense depends on the differe…

More like 1 hour every 4 days in Germany, if I'm counting the number of hours YTD correctly.

Well, I did also say low not just negative.

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

#117

Post by nostrademons »

petermcneeley wrote: post #113
nostrademons wrote: post #76

Earlier quoted context omitted.

Consumption and production are both inelastic and storage costs are high. Traditionally when a producer produces more of a good than consumers want to buy, the price drops, consumers buy more, and producers produce less. If consumption & production are both inelastic, consumers won't buy more and producers can't produce less. The excess goes into inventory, where it's treated as an asset and then sold (often at lower…

Right but Garbage almost certainly has a negative value so it makes sense.

At the instant where there's too much electricity on the grid and too few people using it, that electricity has negative value too. And you can't store it (without paying somebody) till some later instant.

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

#118

Post by tantalor »

CapitalistCartr wrote: post #71

I wonder if there's a way to remove CO2 from the air with surplus electricity without a half-billion dollar plant. That would be a win for everyone. It operates when the wholesale price of electicity drops below its threshold, perhaps only 4-6 hours per day, so would have to be a pretty cheap fixed cost.

Yes its called a grow light they cost about $7 at home depot. It doesn't matter what you grow; weeds will work.

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

#120

Post by DoctorOetker »

woodpanel wrote: post #87
DoctorOetker wrote: post #58

Earlier quoted context omitted.

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)…

Right, I explicitly mentioned not really believing desalination to be a good example, I was using it more as a fake illustrative example.

In hindsight I should have ended with posing the following question: how do we make a simple guide for factory/etc operators/consultants to recognize such steps in their production line?

Desalination is a bad example, because you need a complete new plant, while it is conceivable that other products have one or more energy dense steps.

What should such instructions look like?

Follow the product through your production line, and at each step measure the energy consumed per part at the step, and the volume per part when efficiently stacked. Also note if the step is automated or needs a human, if it is human, check if it can be automated.

If it is automatable, and the energy density for the step is high enough, calculate the cost for changing the production line, allocating sufficient storage, and possibly automating a certain task, and parallellizing the step such that it can be run during energy flood. Then calculate through the price difference how fast it pays itself back.

Mention the importance of actually measuring the energy consumption, instead of just reading off a machine specification of wattage, and cycle time.

Etc.

Edit:

The banks that wish to invest in cheapening such a step could train consultants and send them to factories interested in good deals. I.e. any potential profit is shared between company and bank, and the bank takes the risk (hence has the motivation to do the calculation properly, and will have best knowledge through experience of suitable step energy densities)

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