Clearing price for supplying power to Texas grid –$31.65

Post by thechao » Sun, Feb 21, 2021, 1:30 PM UTC

roenxi wrote: post #185

mrDmrTmrJ wrote: post #54

Earlier quoted context omitted.

Strongly agree. Free markets often fail to adopt low cost protections to tail events. E.g. the free market didn't get us 100% of new cars having seatbelts and airbags, government requirements did. And those standards were fought by the car manufacturers. My point is we need regulations to mandate our energy system to be resilient to outlier events (heat/cold/flooding/high wind etc.) and that's a government function s…

What if I've got a prepper bent and am OK with losing power for a few days in a 1:100 year event? Can I still get cheap, slightly unreliable power? Not to make light of the events in Texas - it sounds scary and they need to be prepared for next time. But the answer isn't automatically "they should have had a gold plated the grid!". The answer might be "they should be have been prepared for a few days without power in…

Post by gruez » Sun, Feb 21, 2021, 1:51 PM UTC

oivey wrote: post #126

kortilla wrote: post #86

Earlier quoted context omitted.

Free markets do account for huge shortages, but we’ve eliminated the motivation for actors to do something about it with anti price-gouging regulations. There would be tons of stockpiles if businesses could appropriately upcharge when there was mass panic buying. Instead we stupidly lock prices, which wipes out most of the point of paying extra storage costs compared to a just in time competitor. The problem is we’ve…

I don’t think what you’re saying jives with the reality of what happened in Texas. The price of electric and natural gas skyrocketed during the shortage. A company that winterized their equipment stood to make a killing. And yet, despite the massive profit incentives, large swaths of Texas were blacked out due to lack of preparation. Besides that, the economic damage of the outages far outweigh how much winterization…

Post by wizzwizz4 » Sun, Feb 21, 2021, 2:01 PM UTC

steve76 wrote: post #83

mrDmrTmrJ wrote: post #54

Earlier quoted context omitted.

Strongly agree. Free markets often fail to adopt low cost protections to tail events. E.g. the free market didn't get us 100% of new cars having seatbelts and airbags, government requirements did. And those standards were fought by the car manufacturers. My point is we need regulations to mandate our energy system to be resilient to outlier events (heat/cold/flooding/high wind etc.) and that's a government function s…

[flagged]

Post by mabbo » Sun, Feb 21, 2021, 2:21 PM UTC

Osiris wrote: post #35

mrDmrTmrJ wrote: post #30

Earlier quoted context omitted.

Honestly, I reach a very different conclusion. Comparing ERCOT to other grids (PJM or CALISO), ERCOT system has delivered very low prices and very high levels of renewable penetrations. PJM wastes billions of dollars a year in capacity payments to coal plants for no reason. What you write, "The market in power should only exist to optimise" well, that is exactly what ERCOT does. As for the disaster last week, that wa…

If the market solves all problems why would the government even need to mandate winterization? Wouldn't smart businesses have done the risk analysis and done the work? Maybe the problem here is that loss of electrical power has a significant external cost that isn't absorbed by the utilities. In other words, the cost of winterization was more than the cost to fix the damage to their equipment but doesn't take into ac…

Post by sep_field » Sun, Feb 21, 2021, 2:25 PM UTC

gruez wrote: post #196

sep_field wrote: post #119

Earlier quoted context omitted.

You are right it creates perverse incentives, but so does the current system. For instance check this article [0] that shows pictures of Houston's skyline during the recent power outages where completely empty skyscrapers are wasting power while ordinary people freeze. I'd rather have poor people using electricity than rich corporations. At least keeping people warm is productive. [0] https://heavy.com/news/photos-ho…

>You are right it creates perverse incentives, but so does the current system. Does the current system charge customers by minute by minute spot prices? I don't think so. If electricity costs $5/kWh you bet the CFO is going to tell the janitor to turn off the lights.