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Solar farm has to switch off every second day due to negative prices

reneweconomy.com.au

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Re: Solar farm has to switch off every second day due to negative prices

#171

Post by icebraining »

movedx wrote: post #3
g82918 wrote: post #2

It seems almost silly that we can generate more energy than we can use some, but not all of, the time.

What's more annoying is we can provide that energy for virtually free, but because it doesn't make someone else profits it gets switched off. EDIT: just to clarify: I mean I wish that solar could be socialised and made into a social commodity. We're becoming increasing dependent on electricity as time passes, almost to the point it'll be difficult to live well without it. If that ever becomes the case, I would want t…

> We're becoming increasing dependent on electricity as time passes, almost to the point it'll be difficult to live well without it. If that ever becomes the case, I would want to see a social effort to ensure electricity becomes available to all, just like health care and drinking water.

I think we're already at that point, which is why many countries have subsidized electricity rates for low-income households.

Re: Solar farm has to switch off every second day due to negative prices

#172

Post by _ph_ »

zaarn wrote: post #166
ZeroGravitas wrote: post #80

I'm not a fan of most reporting of these negative price events. First, they rarely explain why the price is negative. As the article explains, solar can switch itself off, so it's nothing physical about solar that can cause negative prices, as all solar can switch itself off before it goes negative it would bottom out at zero for those reasons. In most cases I've seen so far, contractual agreements with gas, coal or…

The thing about a coal, gas or nuclear plant is that they can't switch off as fast as solar. Solar can switch off in the span of a microsecond without much of an issue. A coal/gas/nuclear plant might actually need the entire day to shut down operation to 0 kW output. And probably needs a day to get back to full operation. So in cases of negative prices, a solar energy producer can do the sensible thing and switch off…

Coal and nuclear plants are slow to switch off, but gas plants are usually reasonably fast.

Re: Solar farm has to switch off every second day due to negative prices

#173

Post by wisdomdata »

droithomme wrote: post #53
JMTQp8lwXL wrote: post #6

An explanation of the mechanics of how I'd have to pay somebody else to take my electricity (e.g., a negative rate) would be helpful. As prices approaches 0, I could take the excess electricity and say, mine cryptocurrency. Is nobody considering the arbitrage opportunities here? Take the 0-cost electricity, move water up a hill, and convert it back to electric when it's needed, etc.

> An explanation of the mechanics of how I'd have to pay somebody else to take my electricity (e.g., a negative rate) would be helpful. Sure. Let's say you have a million people producing a glut of electricity on sunny days from 11am to 2pm, when there is not a lot of demand. So there's massive overproduction and you need to create a financial incentive to incentivize the overproducers to pull back. So you have negat…

South Australian here - In South Australia keep in mind commercial scale solar is also generating against residential rooftop solar which is sold back via a feed in tarrif to the generator at a contracted fixed rate. The generators have to pay for (and take) this power. In some cases 20 year contracts where signed some time ago with feed-in tariffs much higher than what they ever should have been. This has resulted in early adapters making thousands in cash every year from residential solar (and still doing so). Everyone else is paying for it of course. Feed-in tarrifs available for contracts signed today are much lower, but some of these contracts still have a few years to run. Without more storage solar will continue to reduce reliability and add costs.

Re: Solar farm has to switch off every second day due to negative prices

#174

Post by _ph_ »

tremon wrote: post #167
ryan_j_naughton wrote: post #142

Earlier quoted context omitted.

I agree. Negative prices make perfect sense in electricity markets, and journalism does a bad job at explaining it. Supply and demand must always be in equilibrium in real time with electricity (forgetting storage / batteries for a second). If there is more supply than demand or vice versa, then you have instability in the grid and can have blackouts. Those electrons have to go somewhere. This is in contrast to virtu…

some supply simply cannot reduce quickly (e.g. nuclear) What is it about nuclear that makes it impossible to reduce as fast as gas or coal? From my layman's point of view, they all use comparable (steam) turbines to power the actual generators, so I would expect them to be equally capable of disengaging the generator from the turbine. Is this perhaps due to design decisions, or simply a size problem? A foolish questi…

The nuclear part of the reactor is slow to react to control input. Even when completely switched off it produces hundreds of megawatts of thermal energy. This is what doomed the Fukushima reactor. After the earthquake it was technically switched off, but required a lot of cooling as the nuclear reactions continue to go on even with the control rods completely extended. But with the failure of the power supply there was not enough cooling and the reactor eventually melted. Theoretically it should have been possible to passively cool this reactor, but due to operators mistake, one important valve was in the wrong position for that.

Beyond shutting down slowly, nuclear reactors are even slower to start up again. So after a complete shutdown it can take up to two weeks to put a reactor back into full production.

It is conceiveable to build nuclear reactors which are a bit quicker to ramp up and down - I guess more like the reactors of nuclear submarines, but our existing reactors are not suiteable for that, as this was not a requirement when they were designed. They were designed to be combined with quicker providers like gas and water plants.

Re: Solar farm has to switch off every second day due to negative prices

#175

Post by jabl »

Dylan16807 wrote: post #164
mhandley wrote: post #149

Earlier quoted context omitted.

If you have a way for consumers to bid for zero-price electricity, there are many things that can increase demand now and give reduced demand later when prices are higher. Everyone has a domestic freezer. If the freezer is smart, when prices reach zero, it can switch on and decrease the temperature another 10C. When prices are higher, it won't need to run as it warms up slowly. Similarly with domestic hot water - jus…

How much money does it cost to build this out to every house, compared to what it saves? And do people want their electricity prices to vary over the day? If you have a lower cost part of the day then you have to charge more the rest of the time, all else equal.

These spot price contracts for end users do exist in many places (don't know about SA specifically). They haven't been particularly popular; I guess most people are scared about the other side of the coin, will I accidentally drain my bank account if I do my laundry when prices are at the roof limit?

Re: Solar farm has to switch off every second day due to negative prices

#176

Post by ZeroGravitas »

7thaccount wrote: post #160
ZeroGravitas wrote: post #80

I'm not a fan of most reporting of these negative price events. First, they rarely explain why the price is negative. As the article explains, solar can switch itself off, so it's nothing physical about solar that can cause negative prices, as all solar can switch itself off before it goes negative it would bottom out at zero for those reasons. In most cases I've seen so far, contractual agreements with gas, coal or…

So as awesome as the wind production tax credits are in creating many GW of wind power (in the US at least), it did result in many wind farms being able to submit offers that are artificially low. That lowers price signals for everyone else too and causes market distortion.

That market distortion is the whole idea. Similar to a carbon tax, it's intended to correct for the market distortion of externalities from pollution and carbon.

If we just left the market alone it would make inefficient decisions. It's not perfect but it's moving things in the right direction.

Re: Solar farm has to switch off every second day due to negative prices

#177

Post by ZeroGravitas »

bmada wrote: post #145
ZeroGravitas wrote: post #80

I'm not a fan of most reporting of these negative price events. First, they rarely explain why the price is negative. As the article explains, solar can switch itself off, so it's nothing physical about solar that can cause negative prices, as all solar can switch itself off before it goes negative it would bottom out at zero for those reasons. In most cases I've seen so far, contractual agreements with gas, coal or…

In South Australia (SA) there's a few market-specific reasons why floor prices (here -$1000/MWh) occur: 1. Older wind farms have PPAs (essentially a swap) that have no floor. They make the strike price regardless of the market price, so they bid at floor to ensure dispatch. 2. System strength constraints [0] usually limit the amount of wind and solar in SA when there is a lot of intermittent generation (SA is never 1…

If I'm reading your comment right then the negative price is mostly a an accounting fiction.

If solar farms are bidding -1000, but not getting paid that (i.e. not paying that) when they deliver power, just using it as a placeholder like null, then the price isn't actually -1000.

Re: Solar farm has to switch off every second day due to negative prices

#178

Post by lightedman »

qtplatypus wrote: post #106
lightedman wrote: post #34

It's a PV farm, they could just take parts of the PV grid offline instead of playing arbitrage games such as paying others to take their power or trying to build storage systems (though any half-smart PV solar farm has some minor storage on-site.) It's not like the entire system is hooked to a singular large MPPT controller. They aren't bound by the typical issues of energy generation which nuclear or constant hydro-…

It isn’t the PV farm that is paying people to take there power. It is the baseline coal generators.

The article makes it abundantly clear that this is not the case. The first three paragraphs alone have most of the effective article impact.

"When Australia’s renewable energy portfolio reached its important milestone on Wednesday of providing 50 per cent of the main grid’s demand for the first time, one solar farm couldn’t be part of the fun, and had to look on from the sidelines.

The sight of wind and solar farms being switched off when wholesale electricity prices fall into negative territory has become increasingly common over the last few months, particularly in Queensland and South Australia.

But the facility that appears to have been affected the most has been the 95MW Tailem Bend solar farm in South Australia, owned by Vena Energy and operating since earlier this year."

Further reading shows that coal plants rarely need to shut down as evidenced by:

"It’s common to see wind and solar farms switch off when prices go into negative territory, or get close to zero. It happens either because their off-take agreements oblige them to do so, or because they are “merchant” facilities that take the spot price and don’t want to be paying other parties to take their output if prices do go negative."

Coal generators almost NEVER pay for arbitrage in Australia because of various specific agreements (and limits to the arbitrage that is possible in many areas.) It is almost the exclusive domain of wind and solar plants.

Re: Solar farm has to switch off every second day due to negative prices

#179

Post by 7thaccount »

ZeroGravitas wrote: post #176
7thaccount wrote: post #160

Earlier quoted context omitted.

So as awesome as the wind production tax credits are in creating many GW of wind power (in the US at least), it did result in many wind farms being able to submit offers that are artificially low. That lowers price signals for everyone else too and causes market distortion.

That market distortion is the whole idea. Similar to a carbon tax, it's intended to correct for the market distortion of externalities from pollution and carbon. If we just left the market alone it would make inefficient decisions. It's not perfect but it's moving things in the right direction.

I think your point misses part of the market's intent. If you want the market to act correctly, you have to model the carbon or greenhouse constraint in the opmization.

That way you'll send the proper price signals and incentivize new generation or other assets (badly needed in much of the US). What we're currently doing fixes one problem and causes another. This is why ERCOT is having to do things like add in a $9000/MWh ORDC (among other reasons). The prices are just too low.

Re: Solar farm has to switch off every second day due to negative prices

#180

Post by jmpman »

Would it be cost effective to have vats of aluminum oxide sitting idle, waiting for these negative pricing events? The raw material is cheap, and the electrodes are only worn away when actively smelting. With interest rates so low, the idle capital may not be a major impact to profitability.
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