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In Defense of Electricity Markets

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Re: In Defense of Electricity Markets

#51

Post by cyberax »

hef19898 wrote: post #44
cyberax wrote: post #41

Earlier quoted context omitted.

Nope. They are not fine. Europe is floundering with its renewable transition. Right now it's easy to build tons of cheap low-quality wind or solar generation, but it's not economic to build any kind of storage. As a result, Europe is now dependent on natural gas and coal during the winter. And there's nothing that can change that within the next decade.

Strong claims. Any evidence to back them up, besides "Germany shutting nuclear stupid"?

Germany is the main culprit. There's no plan for fossil fuel phaseout in Germany, or for most of the European countries that are not blessed with almost limitless hydroenergy.

Cheap renewables allowed Europe to quickly slash some emissions, but now they're hitting a hard wall of reality: the wintertime sucks for renewables in Europe.

Re: In Defense of Electricity Markets

#52

Post by littlestymaar »

Below is the fundamental hypothesis behind electricity markets:

> Efficient plants with low fuel/opportunity costs usually set the price, and prices rise slightly to bring on less efficient plants during peak hours.

You'll see it everywhere someone discusses electricity markets. The only problem is that this hypothesis is wrong in practice …

It's not so much the marginal price that sets which energy source start and stop, but mostly the technical flexibility of the produce mean. First of all, marginal price doesn't really exist in the first place[1], and different means of electricity production have very different ramp-up delay and costs, which is totally unaccounted by the marginal price hypothesis.

[1] and this isn't just the case in the electricity market, but pretty much everywhere: marginal price is a economic concept that just doesn't refer to anything existing in the real world, as illustrated by the work of Nobel Prize winner Maurice Allais.

Re: In Defense of Electricity Markets

#53

Post by hef19898 »

cyberax wrote: post #51
hef19898 wrote: post #44

Earlier quoted context omitted.

Strong claims. Any evidence to back them up, besides "Germany shutting nuclear stupid"?

Germany is the main culprit. There's no plan for fossil fuel phaseout in Germany, or for most of the European countries that are not blessed with almost limitless hydroenergy. Cheap renewables allowed Europe to quickly slash some emissions, but now they're hitting a hard wall of reality: the wintertime sucks for renewables in Europe.

Germany will exit coal none later than 2038. I guess the rest of comment is just as wrong as the first claim. You still didn't bring up nuclear, I am almost surprised.

Re: In Defense of Electricity Markets

#54

Post by tuukkah »

cyberax wrote: post #43
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.

Europe is worse in carbon-free transition. The grid itself is fine, but it's backed by fossil fuels with no way out.

What do you mean there's no way out? Some European countries have already stopped using fossil fuels, some are making good progress, in some the progress has recently stalled, some haven't really started yet...

Cheap electricity is going to be important for national economies and there are no countries that couldn't build cheap wind and solar (and/or cables to import neighbours' excess renewables production).

Re: In Defense of Electricity Markets

#55

Post by tuukkah »

yunohn wrote: post #26
theshrike79 wrote: post #19

Earlier quoted context omitted.

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.

> A few rare spikes up to 40c/kWh, but it's mostly been under 1c/kWh. The cheapest rate I can get in NL is ~30c/kwh, and that’s with a dynamic price contract. The government has applied an artificial limit of 40c/kwh for 2023, after energy companies here fleeced everyone last year. Unfortunately, it expires by 2024. The worst part is that NL privatized the energy market long ago, to give people “choice” - which has o…

Finland now has the opposite problem where the market price is negative at times. Our neighbours (Sweden, Estonia) are not able to import as much as we produce excess on good days. Luckily, more cables are being built and the variably cheap electricity attracts new industry that can make use of it (green hydrogen and green steel production).

Re: In Defense of Electricity Markets

#56

Post by cyberax »

tuukkah wrote: post #54
cyberax wrote: post #43

Earlier quoted context omitted.

Europe is worse in carbon-free transition. The grid itself is fine, but it's backed by fossil fuels with no way out.

What do you mean there's no way out? Some European countries have already stopped using fossil fuels, some are making good progress, in some the progress has recently stalled, some haven't really started yet... Cheap electricity is going to be important for national economies and there are no countries that couldn't build cheap wind and solar (and/or cables to import neighbours' excess renewables production).

> Some European countries have already stopped using fossil fuels

Yes, the ones that have classic hydro.

> Cheap electricity is going to be important for national economies and there are no countries that couldn't build cheap wind and solar (and/or cables to import neighbours' excess renewables production).

Solar and wind ARE NOT cheap if you actually want them to be reliable. They are about 5x-10x more expensive than nuclear power in this case.

The problem is called Dunkelflaute. Here's an actual example: https://energy-charts.info/charts/power/chart.htm?l=de&c=DE&... - renewable generation mostly disappeared for a week from 18-th to 25-th. These kinds of events happen almost every year, and often more than once.

Worst-case modelling shows that Germany can get about a _month_ of sustained Dunkelflaute about once in a century.

Re: In Defense of Electricity Markets

#57

Post by cyberax »

hef19898 wrote: post #53
cyberax wrote: post #51

Earlier quoted context omitted.

Germany is the main culprit. There's no plan for fossil fuel phaseout in Germany, or for most of the European countries that are not blessed with almost limitless hydroenergy. Cheap renewables allowed Europe to quickly slash some emissions, but now they're hitting a hard wall of reality: the wintertime sucks for renewables in Europe.

Germany will exit coal none later than 2038. I guess the rest of comment is just as wrong as the first claim. You still didn't bring up nuclear, I am almost surprised.

Yeah, and it'll switch to natgas. Great improvement. Not.

Re: In Defense of Electricity Markets

#58

Post by RandomLensman »

cyberax wrote: post #41
hef19898 wrote: post #39

Earlier quoted context omitted.

Actually, electricity markets in Europe work just fine, and provide in fact a lot of required stability. And income events are pretty much instantanious. The only problem European markets have is way too low costs for CO2 certificates which make coal plants way to cheap. Other than that, they work just fine.

Nope. They are not fine. Europe is floundering with its renewable transition. Right now it's easy to build tons of cheap low-quality wind or solar generation, but it's not economic to build any kind of storage. As a result, Europe is now dependent on natural gas and coal during the winter. And there's nothing that can change that within the next decade.

I have hard time seeing that electricity markets in Europe were designed with a view to achieving a renewable transition (some lib service notwithstanding), so not sure that is a failure of the market as designed.

Re: In Defense of Electricity Markets

#59

Post by hef19898 »

cyberax wrote: post #57
hef19898 wrote: post #53

Earlier quoted context omitted.

Germany will exit coal none later than 2038. I guess the rest of comment is just as wrong as the first claim. You still didn't bring up nuclear, I am almost surprised.

Yeah, and it'll switch to natgas. Great improvement. Not.

Youbsaid Germany doesn't have a plan to exit fossil fuels. I showed they in fact do. You are not happy, fair enough.

But since everything being done is either not enough or not feasible, what exactly is your proposal?

Re: In Defense of Electricity Markets

#60

Post by dukeyukey »

cyberax wrote: post #41
hef19898 wrote: post #39

Earlier quoted context omitted.

Actually, electricity markets in Europe work just fine, and provide in fact a lot of required stability. And income events are pretty much instantanious. The only problem European markets have is way too low costs for CO2 certificates which make coal plants way to cheap. Other than that, they work just fine.

Nope. They are not fine. Europe is floundering with its renewable transition. Right now it's easy to build tons of cheap low-quality wind or solar generation, but it's not economic to build any kind of storage. As a result, Europe is now dependent on natural gas and coal during the winter. And there's nothing that can change that within the next decade.

"Europe" is not a country.

France finished it's nuclear build-out decades ago. It's still got issues, but the matter is sorted.

The UK is adding scads of wind power every day.

Ditto for Spain, only with solar.

Norway, Sweden, Switzerland, and Finland have mix of hydro, nuclear, and renewables.

Yes, Germany is screwing the pooch on this one. Most places east of Germany isn't doing much better. But their failure is theirs, and not their Western and Northern neighbours.

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