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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

#211

Post by Retric »

roenxi wrote: post #185
mrDmrTmrJ wrote: post #54

Earlier quoted context omitted.

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…

What if I've got a prepper bent and am OK with losing power for a few days in a 1:100 year event? Can I still get cheap, slightly unreliable power? Not to make light of the events in Texas - it sounds scary and they need to be prepared for next time. But the answer isn't automatically "they should have had a gold plated the grid!". The answer might be "they should be have been prepared for a few days without power in…

Your personal value for reliability isn’t relevant. The electric grid is providing power for hospitals with back up generators and office building which don’t. The value of each of those 9’s to society and the overall economy is what matters and business being forced to shut down lose vastly more money than it would cost to prevent this issue.

The market based solution is to add a very large fine for blackouts on a per customer bases. Grid operators can still select how many actual 9’s they want, but the externalities for doing so are priced in.

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

#212

Post by burlesona »

iso1210 wrote: post #170
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?

1. What makes you think that they need it?

2. FWIW Texas is kind of an island. There are very few significant population centers near the TX border. Oklahoma City is the closest city, followed by New Orleans and Albuquerque. Plus Texas only has one major city near its own borders (El Paso). There aren’t that many neighbors nearby.

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

#213

Post by burlesona »

selestify wrote: post #121
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…

Why is there low demand right now? It’s still pretty cold in Texas.

It has warmed up a lot. It’s 50 degrees in Austin right now. On Monday it was 9. Yesterday it was 20 something in the morning.

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

#214

Post by burlesona »

visarga wrote: post #139

Is there any web page showing the current state of the Texas grid (how much recovered)?

Not that I know of, but my understanding is that electricity is basically back for everyone, except for some isolated cases where the transmission lines are still being repaired.

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

#216

Post by DontGiveTwoFlux »

burlesona wrote: post #204
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…

I generally agree that externalities are a common cause of problems from free markets, perhaps the most common. But I would suggest that free markets generally create good outcomes, and when we identify bad outcomes we should correct the rules of the market. In this case, it probably would make sense for there to be a penalty that providers had to pay if they failed to deliver service after it was committed. My under…

I haven’t done the analysis myself, but I highly doubt winterization would double the cost of energy. It’s probably some small portion of the capex to build the plant in the first place. Would you pay an additional 5% or 10%? Probably, especially if you get to avoid your home being flooded by burst pipes, rendering it potentially unlivable for much longer than the week of power outage.

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

#217

Post by guywhocodes »

mikewarot wrote: post #205

I seems to me that the owners of natural gas fired power plants in Texas are being incentivized to find a way to store a few days of natural gas on site, and winterizing that storage, so they can win the lottery the next time things freeze over. [edit - back of the napkin math] Extrapolating from https://www.eia.gov/tools/faqs/faq.php?id=667&t=3 it looks to me like it takes about 8 ft^3 of natural gas for 1 kwh of el…

At what pressure? Sounds like atmospheric.

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

#218

Post by twistedpair »

mikewarot wrote: post #205

I seems to me that the owners of natural gas fired power plants in Texas are being incentivized to find a way to store a few days of natural gas on site, and winterizing that storage, so they can win the lottery the next time things freeze over. [edit - back of the napkin math] Extrapolating from https://www.eia.gov/tools/faqs/faq.php?id=667&t=3 it looks to me like it takes about 8 ft^3 of natural gas for 1 kwh of el…

> So, to run a 1 GW plant for 24 hours would take 192,000,000 square feet... a cube about 575 feet on each side. That's a huge tank farm.

Isn't that why most gas is stored as LNG?

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

#219

Post by nicoburns »

Osiris wrote: post #35
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…

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…

"Free" markets don't solve these problems. But it's worth noting that regulated markets are still markets.

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

#220

Post by tyingq »

mikewarot wrote: post #205

I seems to me that the owners of natural gas fired power plants in Texas are being incentivized to find a way to store a few days of natural gas on site, and winterizing that storage, so they can win the lottery the next time things freeze over. [edit - back of the napkin math] Extrapolating from https://www.eia.gov/tools/faqs/faq.php?id=667&t=3 it looks to me like it takes about 8 ft^3 of natural gas for 1 kwh of el…

Reading about natural gas, it sounds like storage in underground natural geological pockets is common. And also in tanks, but liquified/LNG which is 600x more dense.

As for coal, it sounds like they already typically receive coal in 120 train car shipments daily which is close to your 12000 ton figure. I imagine keeping lots of spare train cars around isn't a big engineering task.

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