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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

#201

Post by downandout »

komali2 wrote: post #183

>It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity. The "solution" to this "problem" is, rather than investing in a green production method, to desperately cling to existing investments by sending lobbyists to the government to convince them that Clean Coal is the future. I love the line at the end of "The Big Short," I can't remember it ver…

I know you’re being facetious, but it seems to me that the actual solution for these companies’ financial woes would be to simply charge more for energy from their traditional plants when there is demand for it, just as suppliers of any other commodity do. If there are regulations in individual jurisdictions preventing them from doing this, those regulations should be relaxed. The reality is that we are still dependent on traditional energy sources sometimes. Therefore, these plants and the companies that own them have to be able to charge enough stay in business until we don’t need them anymore.

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

#202

Post by ridewinter »

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.

This seems like a brilliant idea. Anyone know how it could be done?

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

#203

Post by Dylan16807 »

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.

In this case "spreading" means "happening more often". And you could have a stable rational market where power prices go negative for an hour every day.

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

#204

Post by Dylan16807 »

tantalor wrote: post #118
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.

How much of the carbon in those weeds will stay out of the atmosphere?

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

#205

Post by jfrankamp »

rayiner wrote: post #115
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 traditi…

There are two things happening, both because of the negative externalities that traditional sources produce, but aren't factored in to prices. One is subsidies, the other is source prioritization both of which favor renewables. Plants that can provide that peaker gap on windless+cloudy days should be rewarded by the market by very high kwh purchase prices, but that's all. The current benefits that renewables receive are aligned with the true costs. Alternatively you could replace the prioritization and subsidies with a heavy carbon tax on traditional sources but the result would be the same.

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

#206

Post by mmt »

tensecondflash wrote: post #174
rwcarlsen wrote: post #132

Earlier quoted context omitted.

Due to subsidies, in the US people dumping home solar into the grid usually get back more than the market rate.

I don't think that's the case. Depending on where you are, you either get paid retail or wholesale rates, and still have to pay some monthly service fee regardless of surplus or deficit. I've never heard of any utility in the US buying solar production at more than retail rates.

> I've never heard of any utility in the US buying solar production at more than retail rates.

That doesn't refute the parent's claim of it being greater than the market rate. The residential retail rate [1] usually doesn't change, except on a long time scale, after regulatory approval, while the market rate changes intra-day, based on supply and demand.

If peak sun doesn't correspond to peak demand (and, from what I've read, it doesn't), those periods are where the utility could be taking a huge loss. For example, if PG&E has a customer in the top marginal usage tier is "selling" power at 25c/kWh when the wholesale market is selling it at 4c, that's a pretty tremendous loss.

[1] Often not even a single rate but a tiered one, so a heavy residential user could be "selling back" power at a particularly high retail rate, much higher than average.

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

#207

Post by icebraining »

fixermark wrote: post #77
xigma wrote: post #47

Earlier quoted context omitted.

You "currently" have a drought, but otherwise you have plenty of water, so a desalination plant isn't a wise investment (yet). Also keep in mind that these are energy spikes that cause negative prices, whereas most industrial uses need a constant and even supply. These spikes are countered by periods of little to no energy . This is the biggest problem with (most) renewables, they cannot entirely replace coal or nucl…

> Energy storage (at cost) is an unsolved problem. Super-true. It's actually pretty fascinating how it's currently done in the grid; storage of energy is often done by converting it (at significant efficiency loss) to a mechanical format. Those formats can get very creative---traditional is "pump a bunch of water uphill into an artificial reservoir," but in areas where big dry mines are available, capping the mine an…

Also, huge flywheels: https://en.wikipedia.org/wiki/Flywheel_storage_power_system

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

#208

Post by Dylan16807 »

WalterBright wrote: post #197
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…

> Consumption and production are both inelastic and storage costs are high. Consumption is inelastic because the electricity rates are fixed 24/7. Allow variable pricing based on supply, and you'll see very elastic behavior. For example, people will charge their car batteries when the rates are cheapest. Same for running the electric hot water heater, and the A/C, refrigerator, etc.

I'd say it's more "slightly elastic" than "very elastic". A lot of people won't spend the mental energy to optimize anything more than the most major consumptions, and even then most of what they can do is rearranging loads, not reducing them.

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

#209

Post by WalterBright »

psergeant wrote: post #199
WalterBright wrote: post #189

I'll suggest again that the solution to this is to charge variable prices to the consumer based on the supply. For example, I pay exactly the same rate, 24/7. Of course this will result in a mismatch of supply and demand. A lot of electricity demand can be shifted to when the supply is cheapest. When the supply varies wildly, like solar and wind do, there's a giant impedance mismatch when demand is charged a fixed pr…

But also: consumers with Powerwalls and other home storage options.

Heck, you could even go to town running an icemaker at noon when power is cheap, and set out trays of ice in the evening with a fan blowing over it. That can even be turned into an appliance that would be an accessory to your HVAC system.

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

#210

Post by jfrankamp »

cmsonger wrote: post #102
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.

> 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. Unless it affects grid reliability. Energy is not just a market. It's something that underpins modern society and the modern economy. I, for one, do not want my power to go out at 7pm because demand is peaking, traditional plants had to close, and the sun i…

You've defined a rapid peaker plant, which no one is implying we should lose. The destruction of the market for this type of bad-actor legacy baseload is a market opportunity for those who can provide the services you're talking about. Whoever can provide it should earn a premium for doing it.
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