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Clearing price for supplying power to Texas grid –$31.65

ercot.com

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

#161

Post by WalterBright »

leoedin wrote: post #156
WalterBright wrote: post #76

Earlier quoted context omitted.

> you're arguing for "market pricing" but arguing against government interference in pricing Market pricing is prices not set by the government. By definition. > If the government doesn't intervene, most people will buy fixed-price electricity contracts instead of market-priced contracts. That's speculation. Even if true, it would be their choice. > Are you sure? They were being portrayed as victims in the news becau…

There is absolutely no possibility that the decision to black out a particular neighborhood was made based on the energy plans that individual houses were on. The fact some people on variable price plans had electricity is completely unrelated to that - their neighbours also would have had electricity.

> absolutely no possibility

They did have to decide which neighborhoods to cut. Wouldn't you cut first the neighborhoods that had fewer people on the variable plan?

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

#162

Post by kevingadd »

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.

If this happens consistently enough, your insurance prices are going to go up. Disaster relief funds aren't unlimited either, and you can experience significant delays when the time comes to go ask for them to pay out.

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

#163

Post by imtringued »

mrDmrTmrJ wrote: post #34
asmithmd1 wrote: post #29

Earlier quoted context omitted.

They may have delivered low prices, but it was at the cost of ignoring handling “black swan” events. As the ERCOT CEO said, If they had not blacked out millions of customers, grid and consumer equipment would have been destroyed - wiping out all the accumulated cost savings. ERCOT does not pay producers for standby capacity. Just this week the New England grid completed its annual auction for capacity to be available…

Respectfully, I don't see the issue as one of choosing to have a capacity market. There was ample excess capacity (at least 26GWs!), just no natural gas to run it as the natural gas infrastructure was frozen. So what was the nature of the failure? Well, there was not resiliency standard that required the natural gas infrastructure to be winterized. Because this infrastructure froze, the state ran out of methane ('nat…

>Well, there was not resiliency standard that required the natural gas infrastructure to be winterized.

>I ask because I broadly understand ERCOT to have delivered the lowest prices

These two statements are the opposite of each other. Low costs because no winterization. Low costs because the grid is unreliable.

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

#164

Post by imtringued »

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…

What's needed is a way to shut off electricity on a per household level based on prices. Consumers set the max price they are willing to pay in an outage. If the price is above that, they get no electricity. Complicated solutions like IoT thermostats limiting max temperatures would be better but the expectation of such a deployment is unreasonable.

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

#165

Post by imtringued »

sep_field wrote: post #119
AnthonyMouse wrote: post #101

Earlier quoted context omitted.

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-ho…

>I'd rather have poor people using electricity than rich corporations.

Deicing power plants and pipelines requires electricity. If electricity cost is $9000/MWh then paying that money is worth it since you unlock the ability to produce more electricity and sell the additional production capacity you brought online for $7000/MWh. Repeat this with multiple power plants and you are back to $100/MWh.

If you just hand it out to random people you might not have enough electricity to keep the electric grid alive.

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

#166

Post by pjc50 »

chaganated wrote: post #133
Bombthecat wrote: post #125

Earlier quoted context omitted.

Dude, this might work on reddit. But not here. Give it up.

You should read his other comments. Most are quickly killed. Not sure if bot or schizo, but interesting.

No, they're not interesting, which is why they've been downvoted.

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

#167

Post by pjc50 »

imtringued wrote: post #147
rhodozelia wrote: post #78

Earlier quoted context omitted.

Vertically integrated government owned and operated utilities have imploded too- notably Ontario hydro failed due to costs related to their nuclear plants, and the rate payers had an extra line item on their bill - $10/mo? - for I don’t know how many decades to pay down the stranded debt. I don’t think markets are the right tool for electricity generation transmission and distribution - too much coordination is requi…

The Chinese model is pretty spot on. Just let the government own voting shares in private companies. The question isn't whether public vs private is better, it's about how to harness the best parts of both. You want the government to step in and prevent unfair and counter productive behavior and you want the private company to run the infrastructure as efficiently as it can.

This would have gone a lot better if you'd said "the French model", or even the "British pre-1970s model". China is a country without a free press; it may appear effective but it's also highly corrupt.

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

#168

Post by KDJohnBrown »

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 other source of energy is weather-independent, can store fuel supplies for several years on site, is emission free and extremely high capacity factors.

No other source of energy has the potential of devastating a region’s water supply and killing thousands with cancer after one earthquake, desigj flaw or incompetent engineer having a bad day.

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

#169

Post by iso1210 »

ajsnigrutin wrote: post #25
asmithmd1 wrote: post #17

Earlier quoted context omitted.

Ah yes, the appeal to authority argument. I can’t have anything valuable to say because I am not an authority. I am sure running a power grid with thousands of producers and millions of consumers is incredibly complex. Did you know every wind turbine and generator is spinning exactly in sync across the whole grid. I am amazed that it works. What obviously does not work is the libertarian fantasy of live market pricin…

> libertarian fantasy So what do you recommend? Mandatory lights/heaters/AC on/off times, so the power produced is actually used, and the power needed is actually produced? The british have the problem that during a football game half-time, a bunch of people start their tea kettles at the same time, and there is a relatively huge spike in electricity usage... this means, that the electricity providers have to plan fo…

That's why the UK has external sources - both inteconnects with other grids, and stored power - that can be brought up in seconds.

My understanding is Texas doesn't even have connections to other grids?

Historically the UK had "economy 7" usage, where domestic electricity was cheaper at night. It's not convenient, it stems back from the end of the socialist era of the 70s where individuals took a backseat to the good of society. Most users only use it to boil a hot-water tank and 'night storage' heaters.

It's a shoddy solution for a problem that shouldn't exist in an advanced economy.

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

#170

Post by iso1210 »

JumpCrisscross wrote: post #46

This is the market screaming for energy storage. If large negative-price swings, on account of higher power variability, become commonplace it could very elegantly pay for storage. It would also let storage be compared, apples to apples, dollar to dollar, with base load power supplies.

Why can't Texas simply output it's power to neighboring states?
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