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

In Defense of Electricity Markets

austinvernon.site

Post reply on HN
Print view View original

11–20 of 142 posts

Re: In Defense of Electricity Markets

#11

Post by Maakuth »

cyberax wrote: post #5

Counterpoint: electricity markets are terrible for reliability. Markets are great, but there are no pricing signals for reliability. You won't know that your grid will collapse at the first strong breeze, until it happens (see: Texas). Theoretically, it can work because companies might invest in reliable generation, in the hopes of getting $$$$$$$$$ when the spot price goes up through the roof. But in practice, prett…

More cross-border capacity would help with reliability as well as making the investments' profitability easier to estimate. This is something Europe at least is investing in.

Re: In Defense of Electricity Markets

#12

Post by ok_dad »

timeimp wrote: post #2

I, for one, want Gen IV small-modular nuclear reactors built. They solve all our climate change-related challenges AND they eat the waste of older generation reactors. I fail to see why we're not investing in more nuclear over solar and wind (whose components are not usually recycled)

It’s money. Look at the cost of nuclear, the real cost with mining, development, construction, maintenance, and decommissioning. It’s way more than the market can bear, and it won’t get any cheaper. You also need a guaranteed pipeline of nuclear operators and an iron clad corporate safety culture to ensure there aren’t any mistakes ever.

I love nuclear tech, but it’s just not feasible today compared to other tech.

Re: In Defense of Electricity Markets

#13

Post by Animats »

cyberax wrote: post #5

Counterpoint: electricity markets are terrible for reliability. Markets are great, but there are no pricing signals for reliability. You won't know that your grid will collapse at the first strong breeze, until it happens (see: Texas). Theoretically, it can work because companies might invest in reliable generation, in the hopes of getting $$$$$$$$$ when the spot price goes up through the roof. But in practice, prett…

PJM does have pricing for reliability.

The first California deregulated electricity market had an auction every half hour and all pricing was spot. This caused blackouts and the bankruptcy of Pacific Gas and Electric, even though it was what PG&E had lobbied for.

Today, most markets (at least PJM and CAISO) have a "day ahead" auction, and a current auction to fine-tune. Most of the market is in the day-ahead auction. This seems to have reasonable stability.

I've read that the overall effect of electricity deregulation is that prices are slightly lower, and reliability is down. Rate-of-return regulation encourages utilities to overbuild somewhat, which is not necessarily a bad thing. Beats under-building.

Re: In Defense of Electricity Markets

#14

Post by ggm »

Its a public utility function. The problem is rationing. Both capex and opex.

Money only exists in this space to try and control things. It's not actually a good profit centre, unless 100% of the profits are hypothicated to the function it implements. The assumption was the market would equipoise to the "best" outcome. Well guess what: it only sort of works. Now we're in end-times for coal and gas look at what coal and gas electricity suppliers do, maximising their profit.

John Quiggin, University of Qld may be one of the last old-school economists who argue its time to walk back from this market madness. Yes, "it works, kinda" but the Kinda here is the massive amounts of market distortion which emerge to make profit, not to further the interests of the public utility function.

Remember, its a public utility. And, its a regulated market. This is not a profit centre, its a function we need, which has been put to market because economists believe their own bullshit and Politicians got on board. It worked, kinda.

Re: In Defense of Electricity Markets

#15

Post by Animats »

pstuart wrote: post #9
cyberax wrote: post #3

Earlier quoted context omitted.

Small modular reactors have almost nothing but disadvantages compared to the good old large-scale PWRs. The ONLY advantage of SMRs is that they are easier to build because only a handful of companies in the _world_ possess technology to build reactor vessels for large-scale PWRs. And none of them are in the US.

We have yet to see, as they've yet to truly enter the market. So far, the record's not been good for large plants -- they tend to go way over budget and schedule. Case in point: Vogtle.

NuScale's price has already gone 60%-70% over budget, and they haven't even built anything yet.[1]

[1] https://oilprice.com/Alternative-Energy/Nuclear-Power/Are-Sm...

Re: In Defense of Electricity Markets

#16

Post by ilaksh »

I like the idea but not sure about the implementation.

Here in deep south Texas they have electricity retailers. What they do is advertise a very low fixed rate, but make it only last for 6 months.

Then if you don't switch to a new provider, you may end up being stuck with a rate that is effectively double what you originally signed up for. Not in the rate that they say they are giving you, but there is some fee that they are allowed to add supposedly related to the real electricity costs from the actual power company, and they make it as high as they can get away with, in order to max out the effective rate.

Re: In Defense of Electricity Markets

#17

Post by sfn42 »

alphager wrote: post #8
cyberax wrote: post #5

Counterpoint: electricity markets are terrible for reliability. Markets are great, but there are no pricing signals for reliability. You won't know that your grid will collapse at the first strong breeze, until it happens (see: Texas). Theoretically, it can work because companies might invest in reliable generation, in the hopes of getting $$$$$$$$$ when the spot price goes up through the roof. But in practice, prett…

How is it worse in Europe? Where in Europe is it worse? I can't remember the last time the grid failed.

Not sure what OP refers to but it isn't very long ago that we were paying over a dollar per kwh in Norway. We've always had extremely low energy prices due to our abundant hydroelectric power etc, but now it's all being sold to Germany or whatever and we get to buy their coal power for 30 times the price we're used to.

Re: In Defense of Electricity Markets

#18

Post by Roark66 »

alphager wrote: post #8
cyberax wrote: post #5

Counterpoint: electricity markets are terrible for reliability. Markets are great, but there are no pricing signals for reliability. You won't know that your grid will collapse at the first strong breeze, until it happens (see: Texas). Theoretically, it can work because companies might invest in reliable generation, in the hopes of getting $$$$$$$$$ when the spot price goes up through the roof. But in practice, prett…

How is it worse in Europe? Where in Europe is it worse? I can't remember the last time the grid failed.

Exactly. If anything the electricity markets in Europe prove the point they can work.

Re: In Defense of Electricity Markets

#19

Post by theshrike79 »

sfn42 wrote: post #17
alphager wrote: post #8

Earlier quoted context omitted.

How is it worse in Europe? Where in Europe is it worse? I can't remember the last time the grid failed.

Not sure what OP refers to but it isn't very long ago that we were paying over a dollar per kwh in Norway. We've always had extremely low energy prices due to our abundant hydroelectric power etc, but now it's all being sold to Germany or whatever and we get to buy their coal power for 30 times the price we're used to.

Yea, that was when we refused to buy natural gas from a dictator attacking sovereign countries.

And due to how the market was built, Germany's over-reliance on Russian gas affected everyone for a good while.

On the other hand I've been enjoying pretty much free electricity for about 6 months now. A few rare spikes up to 40c/kWh, but it's mostly been under 1c/kWh.

Re: In Defense of Electricity Markets

#20

Post by andromeduck »

Animats wrote: post #13
cyberax wrote: post #5

Counterpoint: electricity markets are terrible for reliability. Markets are great, but there are no pricing signals for reliability. You won't know that your grid will collapse at the first strong breeze, until it happens (see: Texas). Theoretically, it can work because companies might invest in reliable generation, in the hopes of getting $$$$$$$$$ when the spot price goes up through the roof. But in practice, prett…

PJM does have pricing for reliability. The first California deregulated electricity market had an auction every half hour and all pricing was spot. This caused blackouts and the bankruptcy of Pacific Gas and Electric, even though it was what PG&E had lobbied for. Today, most markets (at least PJM and CAISO) have a "day ahead" auction, and a current auction to fine-tune. Most of the market is in the day-ahead auction.…

Day ahead isn't enough. Need capacity markets & year ahead futures from what I remember last time I read up.
Post reply on HN