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In Defense of Electricity Markets

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Re: In Defense of Electricity Markets

#81

Post by stuaxo »

jillesvangurp wrote: post #75
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…

Europe has a very robust energy market. The Ukrainian war put a lot of stress on it last winter. The lights stayed on. Sure prices rose a little and that sent off a strong price signal for people to conserve energy and invest in alternative solutions. Exactly what you'd hope for in a well functioning market. The European market is all interconnected. You might get electrons from Norwegian hydro, German or Danish wind…

In the UK at least - The prices were put up before the Ukrainian war, but then that was used as an excuse.

Re: In Defense of Electricity Markets

#82

Post by robertlagrant »

hef19898 wrote: post #69
cyberax wrote: post #65

Earlier quoted context omitted.

> I showed they in fact do. You actually haven't shown that. Coal exit does not mean fossil fuel exit. And I have not seen an actual plan to get out of fossil fuels, apart from general hand-waving. And I mean an actual plan, with detailed location of new power storage plants, exact targets for renewables, etc.

Such a plan is currently being prepared for coal. Gas, as a means to cover peaks on short notice, is still needed so, but also much better than coal, especially at significantly lower volumes. This is a classic case of letting the perfect be the enemy of the good. And revamping huge portions of an energy grid, and generation base, is nothing that is done easily or fast. Edit: Source in German: https://www.bundesnetza…

> This is a classic case of letting the perfect be the enemy of the good

No. If you say they're exiting fossil fuels, but they're moving on to gas, your claim is just wrong. Gas might be better than coal, but that wasn't the claim.

Re: In Defense of Electricity Markets

#83

Post by robertlagrant »

dukeyukey wrote: post #60
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.

"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 the…

The wind power over here is nice, but hopefully the nuclear gets rolling[0].

[0] https://www.bbc.co.uk/news/business-61010605

Re: In Defense of Electricity Markets

#84

Post by liampulles »

Here in South Africa, energy production is starting to move more and more to individual households and businesses, because our government power utility is failing. We don't have electricity markets, but that seems to be changing.

Hopefully we will get robust electricity markets here. Not because I think they are intrinsically a great thing, but because they are less terrible in the SA context.

Re: In Defense of Electricity Markets

#85

Post by jillesvangurp »

bee_rider wrote: post #22
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)

Invest in both, I don’t think nuclear is the future but wouldn’t mind being wrong. To pay for it, raise taxes on fossil fuels.

Invest proportional to the risk. Nuclear is a very risky investment. But it might pay off. The financial risk level is why it is so dependent on state subsidies and tax payer money. Without that, nuclear operators would be going bankrupt and no sane investor would risk their money on it. The risks include lengthy delays, cost overruns, policy issues, safety related cost, and much more. Some of those things might be fixable. But there are no guarantees. And without prices for nuclear energy coming down substantially, the resulting technology is not viable in the market. It might happen but it's not looking like that would happen before there's a few more tw more renewable capacity online in the next few decades.

Solar, wind, and other renewables are very popular investments right now. There are very clear learning effects visible when implementing them resulting on year on year cost reductions. These investments have a very reliable ROI. A very predictable and quick implementation. And they are easy to scale. That's why so much new capacity is coming online vs. the absolutely pitiful amounts of nuclear being added to the grid. The price gap is basically an order of magnitude and growing. You get about 10x more capacity in renewables for the same money. The realized capacity gap also is much larger for the same reason.

Re: In Defense of Electricity Markets

#86

Post by hef19898 »

robertlagrant wrote: post #82
hef19898 wrote: post #69

Earlier quoted context omitted.

Such a plan is currently being prepared for coal. Gas, as a means to cover peaks on short notice, is still needed so, but also much better than coal, especially at significantly lower volumes. This is a classic case of letting the perfect be the enemy of the good. And revamping huge portions of an energy grid, and generation base, is nothing that is done easily or fast. Edit: Source in German: https://www.bundesnetza…

> This is a classic case of letting the perfect be the enemy of the good No. If you say they're exiting fossil fuels, but they're moving on to gas, your claim is just wrong. Gas might be better than coal, but that wasn't the claim.

Oh dear... They have a plan to exit the dirtiest form fossil fuel, one Germany heavily relies on today. I did not say Germany is gonna move to gas, since I didn't read everything, that was just an assumption.

So, what you say is the current plan to exit coal, which you initially claimed didn't exist, is garbish because the result might include some gas. And hence, there is no such plan, and even if there was, said plan wouldn't be feasible because of reasons.

That is exactly getting a (poorly defined) perfect in the way of the good.

Edit: Just realized I replied to another commenter, so please replace "you" with GP.

Re: In Defense of Electricity Markets

#88

Post by tuukkah »

cyberax wrote: post #67
tuukkah wrote: post #62

Earlier quoted context omitted.

We are not stuck and these issues are solvable (as much as they exist): trade of electricity with neighbouring countries, storage etc. For example, a simple thing where Germany could try to follow the Nordic countries is heat pump installations to keep houses warm without fossil fuels.

> We are not stuck and these issues are solvable I don't believe they are solvable with the existing approaches. Transition to natural gas from coal is possible, but there's nothing on the horizon after that. The existing plans (if you can call them that) mostly depend on asterisks pointing to a footnote saying "magic happens here": cheap hydrogen, power-to-gas, radically cheaper batteries, etc. > For example, a simp…

> there's nothing on the horizon

We can build more of what we have, such as pumped hydro and EU-wide interconnections.

You mentioned the fear that the solutions will cost 5 times more than nuclear. That's not a horrible worst case scenario (as nuclear is so cheap ;-) and we can be sure that costs go down as the markets scale and technologies mature.

It may look bleak in Germany at the moment, but it certainly doesn't look bleak everywhere or for long.

Re: In Defense of Electricity Markets

#89

Post by mrtksn »

frutiger wrote: post #78
ilikerashers wrote: post #63

I don't think they can be defended. In the UK last winter, generators artificially "shut down" to drive up prices. It's a rigged game that hurts consumers: https://www.theguardian.com/business/2023/mar/23/uk-power-fi... The richest people I know (guys in their 30s worth 100 million) all made it through energy trading. Lots of hands in pockets here and is similar to most corrupt privatisation initiatives.

> generators artificially "shut down" to drive up prices Isn’t that an argument for having a proper market with multiple suppliers? Competitors would normally step in to provide supply at non inflated prices to generate greater revenue.

I wonder how realistic is this? It probably takes multiple years to build anything that generates electricity at scale so competition must be very predictable.

Then you can probably calculate your optimal profit strategy very easily and when you sell something that people have to buy, in some cases, probably just inflating the prices by reducing production is the most profitable strategy. There’s no risk of someone stepping in if it’s most profitable for everyone to just produce enough to inflate prices(if you produce one percent more you earn one percent more but if you produce one percent less and if the price go 10% up, you end up making much more money).

Aren’t the oil producers doing the same?

Re: In Defense of Electricity Markets

#90

Post by jillesvangurp »

lysecret wrote: post #10

Electric water heaters have long been in demand response programs, but new upgrades improve their ability to shift energy based on real-time conditions without leaving customers with cold water. Roughly 18% of household energy goes towards water heating, though many buildings still use fuels like natural gas. Would love to hear more on this point. Which companies are doing the integration?

There's a lot of activity around this topic in Europe. E.g. several companies with innovative products in the UK, Netherlands, and Scandinavia. Also changing regulations around gas are creating incentives for houses to modernize. A lot of home owners are spending lots of money in this new market.

One company that was promoted on the Fully Charged Youtube channel a few times is Myenergi. They have a range of products around managing energy in your house. If you combine them, you can do things like defining rules for when to use solar energy from your roof to charge your battery, heat your boiler, charge your car, or sell it back to the grid. Seems like a smart solution. There are many such solutions in the market.

Nice channel to check out if you want to know more about this. They regularly review products and solutions in this space.

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