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Spain has become one of Europe’s cheapest power markets

janrosenow.substack.com

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Re: Spain has become one of Europe’s cheapest power markets

#101

Post by tialaramex »

mhh__ wrote: post #40
pyrale wrote: post #37

Earlier quoted context omitted.

That it is treated as such speaks volumes to the craft of the people designing and maintaining the grid.

Unfortunately in Britain at least politicians are absolutely dead set on taking the piss / abusing this by e.g. adding huge amounts of subsidy and stealth taxes into what should be price discovery mechanisms (or for example when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes).

> when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes

All the time? Every single HN discussion about this ends mentioning CfD, often as if it's some secret nobody knows about even though the CfD strike prices are often headline news when they're agreed.

Re: Spain has become one of Europe’s cheapest power markets

#102

Post by mhh__ »

tialaramex wrote: post #101
mhh__ wrote: post #40

Earlier quoted context omitted.

Unfortunately in Britain at least politicians are absolutely dead set on taking the piss / abusing this by e.g. adding huge amounts of subsidy and stealth taxes into what should be price discovery mechanisms (or for example when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes).

> when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes All the time? Every single HN discussion about this ends mentioning CfD, often as if it's some secret nobody knows about even though the CfD strike prices are often headline news when they're agreed.

I've basically only just seen this stuff started to be discussed critically in the media in fairly recent years.

not including $work discussions with energy traders.

Re: Spain has become one of Europe’s cheapest power markets

#103

Post by [deleted] »

pyrale wrote: post #27

The author's point is that Spain's electricity is very cheap compared to other European countries thanks to its great electricity mix, etc. The reality is that Spain's electricity is cheap because it is relatively insulated from Europe's core network, because its interconnections with other countries are limited. In financial words, there is a spread with the rest of Europe because the ways to arbitrage that spread a…

[deleted]

Re: Spain has become one of Europe’s cheapest power markets

#104

Post by PowerElectronix »

pyrale wrote: post #27

The author's point is that Spain's electricity is very cheap compared to other European countries thanks to its great electricity mix, etc. The reality is that Spain's electricity is cheap because it is relatively insulated from Europe's core network, because its interconnections with other countries are limited. In financial words, there is a spread with the rest of Europe because the ways to arbitrage that spread a…

To add to this, Spain gets it gas from Algeria, the rest of europe gets it from Russia and the middle east. So yeah, It's easy to have better prices when your gas is comparatively free from disruptions.

Re: Spain has become one of Europe’s cheapest power markets

#105

Post by PowerElectronix »

ragebol wrote: post #43
miohtama wrote: post #29

Earlier quoted context omitted.

Hmm. Everyone should just disconnect Germany, let them freeze, and enjoy cheap electricity?

Spain's neighbors could also have lower energy prices with more interconnection to Spain. The whole network diversifies, which would be more beneficial for Europe as a whole.

France systematicaly refuses to increase the power of their interconect with Spain, as well as to make a gas pipe that would provide cheap Algerian gas to the rest of europe.

Re: Spain has become one of Europe’s cheapest power markets

#106

Post by XorNot »

victorbjorklund wrote: post #65
mhh__ wrote: post #39

Earlier quoted context omitted.

normally when you buy electricity it costs money!

Many times negative spot prices.

Which is bad, it's a market and infrastructure failure. Negative prices are to get generators to turn off.

A new feature on solar inverters is curtailment mode so they can be remote shutdown when the grid goes negative, since if you're on wholesale energy pricing you'll be charged if you keep driving the grid.

Re: Spain has become one of Europe’s cheapest power markets

#107

Post by g8oz »

pyrale wrote: post #27

The author's point is that Spain's electricity is very cheap compared to other European countries thanks to its great electricity mix, etc. The reality is that Spain's electricity is cheap because it is relatively insulated from Europe's core network, because its interconnections with other countries are limited. In financial words, there is a spread with the rest of Europe because the ways to arbitrage that spread a…

The relative isolation you cite for power being cheap were true a decade ago when power was expensive. The author is correct in extolling the virtues of renewables.

Re: Spain has become one of Europe’s cheapest power markets

#108

Post by XorNot »

crote wrote: post #76
badpun wrote: post #16

Earlier quoted context omitted.

How much would it cost to build out batteries which cover entire continent's electricy needs for say three weeks (as there can be 2-3 week lulls of no wind and no sun in Europe in the winter)? Cause that sounds like a lot of batteries. Not to mention, if a freak 4 week lull occurs, we'll go back to Middle Ages for a week.

"But what if thing thing that never happens were to happen?" We'd probably go deep into hydro, fire up every gas peaker plant, and through skyrocketing prices incentivize everyone to switch to emergency diesel generators where possible. You're talking about a once-in-100+-years event. We'll deal with it the same way we dealt with the various oil crises.

You can't fire up capacity you don't have. Your scenario implies a massive idle stock of power plants.

Who's going to build and run them? They'd be enormously expensive because they'd almost never sell power.

(Of course the answer is if you build 3 weeks of battery storage you can pretty obviously build 4).

Re: Spain has become one of Europe’s cheapest power markets

#109

Post by XorNot »

scythe wrote: post #74
PaulKeeble wrote: post #7

The past few years has also had Solar continuing to decrease in price so its increasingly going to be the primary choice. On top of that battery prices have been plummeting too so that now Solar + battery is cheaper than other options like Nuclear and especially Gas. Most of the EU will be running on Wind and Solar in the coming years, its a change that is now rapidly occuring based entirely on the rare economics. So…

>On top of that battery prices have been plummeting too so that now Solar + battery is cheaper than other options like Nuclear and especially Gas. I'm a little bit sad that pumped hydro doesn't get more attention in the discussion. It might be too late for it to matter, with improvements in battery prices and ongoing lithium discoveries. But that only underscores the fact that it should have been allowed to matter tw…

Pumped hydro is objectively worse then batteries.

Anyone can install batteries anywhere at a fairly minimal local fire risk.

A dam is a major mechanical structure which if it fails will straight up obliterate downstream towns, and as such requires a numerous specialized engineering designs and on going maintenance to retain basic safety.

Re: Spain has become one of Europe’s cheapest power markets

#110

Post by cheema33 »

hunterpayne wrote: post #92
maartenscholl wrote: post #79

Earlier quoted context omitted.

This is an interesting point about energy market balancing but it has causality backwards. Spain simply has a better energy mix than Germany, no matter how big the spread between the countries is as a function of interconnectedness.

The article is a mix of facts and figures on the supply side. However, the real reason for the current cheap prices is the lack of demand. Spain's economy isn't doing well and they have hurt their tourism industry with politics. That's most of the reason for the temporarily cheap power that they mostly import from their neighbor. Being dishonest about their energy policy is pure politics.

> Spain's economy isn't doing well and they have hurt their tourism industry with politics.

I don't live in Spain. And this is the first I have heard about their politics keeping tourists away. Can you elaborate?

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