Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Clearing price for supplying power to Texas grid –$31.65

ercot.com

Post reply on HN
Print view View original

111–120 of 266 posts

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

#111

Post by hh3k0 »

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.…

> 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.

> […] To avoid such outages in the future, Texas needs to build more nuclear reactors.

From an article I've read the other day:

> “This is a perfect example of the need for reliable energy sources like natural gas & coal,” tweeted U.S. Sen. Steve Daines, a Republican from Montana, on Tuesday.

> In reality, failures in natural gas, coal and nuclear energy systems were responsible for nearly twice as many outages as frozen wind turbines and solar panels, the Electric Reliability Council of Texas, which operates the state’s power grid, said in a press conference Tuesday.

"Texas blackouts fuel false claims about renewable energy": https://abcnews.go.com/US/wireStory/texas-blackouts-fuel-fal....

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

#112

Post by kristjansson »

tzs wrote: post #94
WalterBright wrote: post #66

Earlier quoted context omitted.

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.

The argument goes that if prices were unbounded above, demand would drop, and suppliers would move heaven and earth to deliver more to take advantage. No one fills their tank ‘just to be safe’ if the gas is $50/gallon; if they really could charge $50/gallon the oil companies would have private road clearing crews and tanker trucks outfitted like storm chasers? I don’t know.

While such a policy might maximize economic utility I think you’re correct that it’s advocates gloss the obvious physical - but also social - constraints.

Sometimes gas (or whatever) just can’t be delivered for any price. Since demand obviously drops off with price, it’s hard to believe suppliers could justify mammoth investments in delivery infrastructure.

More importantly, such a policy means rationing a essential resource proportional to wealth. Those with the most get what the need; the well off get a little at a painful price; those struggling under normal circumstances just go without. The argument does that a little at a painful price is better than none at a artificial price. I think that misses the size of the lattermost group, and the risk that expressing a fundamental inequality between humans during exigent circumstances - that if you don’t have money, you can’t have gas or heat, or whatever it is - puts social cohesion in jeopardy. Rationing resources either by explicit (1 gal per customer) or implicit (first come first served) policy might be economically inefficient, but socially expedient

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

#113

Post by [deleted] »

thinkloop wrote: post #110
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…

There is no way it would be effecient to perpetually store 1000X your regular demand just to upsell in an unprecendented crisis, regardless of price gouging policies.

[deleted]

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

#114

Post by foepys »

princekolt wrote: post #15
david-gpu wrote: post #13

Earlier quoted context omitted.

...or, hear me out, this system is far more complex than an armchair specialist from HN can understand from reading a couple of headlines, and the actual experts in this subject matter are doing everything in their power to make the system work as best as they can, balancing a zillion opposing forces.

Hmmm... It's almost like solving massive-scale real-life problems is harder than hacking some code together based off medium tutorials

That's a lesson many CS or maybe even all STEM grads have to learn at some point. Especially politics is more complicated than any code you can design.

There is quite a bit of elitism when programmers talk about real-life events but admittedly less here on HN than in many other forums.

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

#115

Post by mike_d »

aaur0 wrote: post #106
ncallaway wrote: post #103

Earlier quoted context omitted.

Largely not because the TX power grid mostly isn't physically connected to the grid of the rest of the US. https://www.king5.com/mobile/article/news/verify/texas-indep... My understanding is that this was largely deliberate on the part of the state of TX to minimize the impact of federal energy regulations on the TX grid. The idea being that the federal regulations devise their authority from the regulation of inters…

Wow. I hope other states who have a similar setup learn from this and take adequate measures to avoid situations like this in the future.

No other state operates its own grid, this is a unique "feature" of Texas trying to avoid federal energy regulation in the 70s.

The US (minus Texas) is split in to an Eastern and Western grid, so that a single doomsday event can't knock the entire country offline.

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

#116

Post by fallingknife »

spacemanmatt wrote: post #8
asmithmd1 wrote: post #2

I was not sure I was reading the map correctly, but it is true. If you rushed to get a power plant online because they were begging for power and offering $9k/MWhr, they are now charging you $30. http://www.ercot.com/content/cdr/html/20210220_real_time_spp

I believe that is an accurate description of disincentivizing oversupply. I hate ERCOT.

You hate ERCOT for disincentivizing oversupply?

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

#117

Post by chaganated »

mrDmrTmrJ wrote: post #54
Osiris wrote: post #35

Earlier quoted context omitted.

If the market solves all problems why would the government even need to mandate winterization? Wouldn't smart businesses have done the risk analysis and done the work? Maybe the problem here is that loss of electrical power has a significant external cost that isn't absorbed by the utilities. In other words, the cost of winterization was more than the cost to fix the damage to their equipment but doesn't take into ac…

Strongly agree. Free markets often fail to adopt low cost protections to tail events. E.g. the free market didn't get us 100% of new cars having seatbelts and airbags, government requirements did. And those standards were fought by the car manufacturers. My point is we need regulations to mandate our energy system to be resilient to outlier events (heat/cold/flooding/high wind etc.) and that's a government function s…

[flagged]

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

#118

Post by kortilla »

thinkloop wrote: post #110
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…

There is no way it would be effecient to perpetually store 1000X your regular demand just to upsell in an unprecendented crisis, regardless of price gouging policies.

This is super predictable behavior in storm areas like Texas. Hurricanes come, everyone goes for gas, places start to run out of gas, nobody can raise rates, they run out of gas. Even a double normal price could easily pay off a much larger tank.

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

#119

Post by sep_field »

AnthonyMouse wrote: post #101
sep_field wrote: post #77

Earlier quoted context omitted.

One problem with this is it forms a regressive structure where poor people are priced out while rich people get to keep consuming at whatever rate they can stomach. It would work better and much more fairly if the floating rate was scaled by the net worth of the customer.

That's completely defeating the purpose of the price signal, which is to cause whoever is the most price sensitive to cut usage. By charging less to the people who are most price sensitive, the average price charged in order to deter usage would have to increase dramatically. It also creates ridiculous perverse incentives where people with little money waste electricity in the midst of a shortage because they're not…

You are right it creates perverse incentives, but so does the current system. For instance check this article [0] that shows pictures of Houston's skyline during the recent power outages where completely empty skyscrapers are wasting power while ordinary people freeze.

I'd rather have poor people using electricity than rich corporations. At least keeping people warm is productive.

[0] https://heavy.com/news/photos-houston-skyline-lit-up-power-o...

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

#120

Post by Olreich »

khuey wrote: post #79
throw0101a wrote: post #72

Earlier quoted context omitted.

> 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…

> 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. Yeah but that's going to be paid for property insurers or perhaps federal disaster relief funds. ERCOT successfully externalized the cost of coping with frigid temperatures, allowing them to provide power at lower prices.

Externalizing costs might be good for business, but it’s pretty clearly not good for customers here.
Post reply on HN