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Clearing price for supplying power to Texas grid –$31.65

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Re: Clearing price for supplying power to Texas grid –$31.65

#91

Post by [deleted] »

godmode2019 wrote: post #74
Sparkle-san wrote: post #42

Earlier quoted context omitted.

Climate change leading to temperature extremes in both directions is an open question within climate science. There are some theories suggesting this is the case and there are skeptics of that theory, but if you've proven otherwise then you should probably submit your research to them.

I agree, I feel the burden of proof is in the new theory, rather than - here is a hypothesis, prove its wrong. It's pretty clear in the small scale studies co2 concentration affects temperature in the direction or warming in the long term and the short term affect of cooling because less energy makes it to the surface. (Similar to clouds or smog/ smoke blocking light) But a causing extreme cold weather events..

[deleted]

Re: Clearing price for supplying power to Texas grid –$31.65

#92

Post by hexane360 »

kortilla wrote: post #86
josephg wrote: post #49

Earlier quoted context omitted.

Free markets seem to do a bad job with resiliency. Redundancies, winterisation, warehousing N95 masks just in case, etc is treated as inefficiency by a free market and eliminated. These aren’t externalities - is there an economics name for this? I’m sure it’s been noticed before.

Free markets do account for huge shortages, but we’ve eliminated the motivation for actors to do something about it with anti price-gouging regulations. There would be tons of stockpiles if businesses could appropriately upcharge when there was mass panic buying. Instead we stupidly lock prices, which wipes out most of the point of paying extra storage costs compared to a just in time competitor. The problem is we’ve…

You'd need to make a strong argument to convince me that situation would actually be much better than the one we have currently. At least with the current price-gouging laws, we're able to semi-select for the people who are willing to spend the most time pursuing goods, which has a much better correlation with actual need than who's willing to spend the most money.

Furthermore, I'm not entirely convinced that removing price gouging laws would really prevent these sort of events. Capitalism has a tendency to optimize for the short term, and to select for firms that are perfectly optimized for the current environment, however unrepresentative that may be. Sure, counterculture firms exist, but there's rarely enough of them to make a big dent, and the markets often remain irrational longer than they can remain solvent.

Re: Clearing price for supplying power to Texas grid –$31.65

#93

Post by adolph »

throw0101a wrote: post #72
mrDmrTmrJ wrote: post #18

Earlier quoted context omitted.

Why do you hate ERCOT? I ask because I broadly understand ERCOT to have delivered the lowest prices and the highest reliability over the last decade. A far better outcome than PJM or CALISO. Last weeks failure was because the natural gas pipeline infrastructure isn't winterized - a separate issue from the structure of the electricity market. What leads you to a different opinion?

> I ask because I broadly understand ERCOT to have delivered the lowest prices and the highest reliability over the last decade. Until they didn't. Until any money savings you may have gotten over the last decade was eaten up by what will be the cost of the burst pipes and flooding of your house. How are ERCOT's prices compared to El Paso's? > El Paso Electric said they always try to prepare for the future and after…

That’s great that El Paso got this failure mode right. Are there other modes that they de-prioritized? Is holding them up as a model of success a form of "resulting" [0] since we don't know what counterfactuals in which they would have failed?

El Paso Energy is interesting bc it represents the old school community monopoly.[1] I wonder if the JPM buyout will help or hinder its mission.

0. https://nautil.us/issue/55/trust/the-resulting-fallacy-is-ru...

1. https://en.wikipedia.org/wiki/El_Paso_Electric

Re: Clearing price for supplying power to Texas grid –$31.65

#94

Post by tzs »

WalterBright wrote: post #66
taeric wrote: post #63

Earlier quoted context omitted.

Huh? I know the few times that gas has had a run on it in my lifetime, people immediately bring up gouging laws. Quickly reading, sounds like this is only a few states and depends on a few other factors?

I thought the gouging laws only applied when disasters are declared. The gouging laws are stupid, anyway, as they simply ensure there's no gas to buy. Everybody is worse off.

In most disasters for which gouging laws would apply, won't the gas stations still run out even without such laws? The gas stations usually run out because the disaster stops transportation into the disaster area so the gas stations can't get resupplied.

Re: Clearing price for supplying power to Texas grid –$31.65

#95

Post by asterialite »

godmode2019 wrote: post #33
mrDmrTmrJ wrote: post #30

Earlier quoted context omitted.

Honestly, I reach a very different conclusion. Comparing ERCOT to other grids (PJM or CALISO), ERCOT system has delivered very low prices and very high levels of renewable penetrations. PJM wastes billions of dollars a year in capacity payments to coal plants for no reason. What you write, "The market in power should only exist to optimise" well, that is exactly what ERCOT does. As for the disaster last week, that wa…

I'm sorry but how does a trace element affect the polar vortex/ jetstream bending. It doesn't. Its not a good argument if all weather situations can be explained by "climate change". It's too hot - climate change It's too cold - climate change What you are describing is called weather.

There's lots of ways global warming could lead to colder winters.[0] For example, the temperature differential between Arctic and mid-latitude air normally keeps the polar vortex contained. As this differential decreases, however, the polar vortex becomes less contained. As such, the maximum latitude reached by the jet stream increases with the Arctic's temperature. This creates colder weather in some places. [1] [2]

As unintuitive as it sounds, global warming can lead to colder temperatures. It is up to people who disagree with this theory, not its proponents, to prove their case.

[0] https://www.ucsusa.org/resources/does-cold-weather-disprove-...

[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4455715/

[2] https://www.tandfonline.com/doi/pdf/10.3402/tellusa.v68.3233... [pdf]

Re: Clearing price for supplying power to Texas grid –$31.65

#96

Post by hn_throwaway_99 »

cbmuser wrote: post #39
ggm wrote: post #22

The market in power should only exist to optimise. Its become a rei-ified good in its own right, and is being gamed by bad faith actors with stranded assets (coal, oil) to make a point about green power and capital investment money they want. It's possible no power network could have avoided some of this, but its patently obvious a regulated power utility function needs investment, and the market is not the best mode…

> The energy market is not the solution. The energy market is the problem. No, unreliable power sources such as wind, solar and gas are the problem. Except for a short outage due to a sensor failure, the four nuclear reactors have been steadily supplying electricity. The overall availability of nuclear across the United States is >90%. It’s far more reliable than any other source of electricity. > https://www.energy.…

Lots of regions with bitterly cold winters have wind, solar and gas plants that function just fine.

Re: Clearing price for supplying power to Texas grid –$31.65

#97

Post by randrews »

asmithmd1 wrote: post #12
jetrink wrote: post #10

Context: > For wind developers, federal tax credits also are a contributing factor, even allowing the wind resources to make offers at negative prices. However, low and/or negative offers are not limited to any particular resource, and it is not uncommon for thermal generators to submit negative prices to decrease their chances of being dispatched below their desired or capable levels. > ... > Market prices tend to g…

If your job is to establish a stable market between producers and consumers, and the market price you set swings positive and negative, through 6 orders of magnitude in just 72 hour...you are not doing a good job.

I live in rural Texas. Tuesday it was 10-20 degrees here, today was high 60s, tomorrow will be 70s. Thursday I was wondering where to evacuate to if I ran out of propane, today I turned off the furnace because it was too hot in the house.

To think this would not have an effect on energy demand, and thus price, is delusional.

Re: Clearing price for supplying power to Texas grid –$31.65

#98

Post by Guthur »

hexane360 wrote: post #92
kortilla wrote: post #86

Earlier quoted context omitted.

Free markets do account for huge shortages, but we’ve eliminated the motivation for actors to do something about it with anti price-gouging regulations. There would be tons of stockpiles if businesses could appropriately upcharge when there was mass panic buying. Instead we stupidly lock prices, which wipes out most of the point of paying extra storage costs compared to a just in time competitor. The problem is we’ve…

You'd need to make a strong argument to convince me that situation would actually be much better than the one we have currently. At least with the current price-gouging laws, we're able to semi-select for the people who are willing to spend the most time pursuing goods, which has a much better correlation with actual need than who's willing to spend the most money. Furthermore, I'm not entirely convinced that removin…

The problem is that markets, controlled or free, are at a level of complexity far beyond our capacity to effectivel control from a top down perspective, there have been countless examples with top down legislation have had unforeseen consequences (or overtly controlled markets in Soviet Union). The idea with free market capitalism is that as much as possible the transactions/pricing between parties should allow for systemic optimisation.

There are two main problems, a) not all transactions are captured appropriately, b) we fuck with the system from a top down perspective so much as to completely undermine the premise of the low level optimisation. Oftentimes it's in relation to (a) that we do (b), in (b) we should be aiming to provide recompense to the side of the hidden transaction via the government; unfortunately the government oversteps here and tries to optimise the system themselves.

Re: Clearing price for supplying power to Texas grid –$31.65

#99

Post by AnthonyMouse »

floatingatoll wrote: post #85
WalterBright wrote: post #45

Earlier quoted context omitted.

If the consumer retail electricity rate was allowed to float minute by minute, there'd be no need for "peaker" plants. The notion of fixed electricity rates is the source of most of the problems. After all, there are regular events where oil refineries go off like, burn down, blow up, etc., and yet I'm still able to buy gas because the pump prices go up, reducing demand to match the supply. Note that this big freeze…

In general, individual consumers expect sellers to increase the price above the cost of goods in exchange for decreasing the exposure of the consumer to volatility. A case could be made that gas prices violate this expectation, by transmitting sharp price shocks to consumers in violation of the unspoken agreement. I remember something about how gas prices quite reliably go up rapidly and go down very slowly, which do…

> In general, individual consumers expect sellers to increase the price above the cost of goods in exchange for decreasing the exposure of the consumer to volatility.

Most markets neither have nor want this. If there is a freeze in Florida, the price of oranges goes up. If someone discovers a large new deposit of cobalt, the price of cobalt goes down. If there is a flood in Thailand, the price of hard drives goes up. If a patent expires on a drug, the price of the drug generally goes down.

> I remember something about how gas prices quite reliably go up rapidly and go down very slowly, which doesn't at all reflect a market that's allowed to 'float'.

It's just a reflection of imperfect competition.

If the price they have to pay goes up then they raise prices immediately because there is no point in attracting customers with low prices so that you can sell to them at a loss.

Once wholesale prices come back down, not lowering prices until your competitors do allows you to charge higher margins. But lowering your prices increases your customer volume, so eventually somebody does and then the others have to follow. The fact that this doesn't happen immediately is a reflection of the fact that there are only tens and not thousands of local competitors.

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