Clearing price for supplying power to Texas grid

Re: Clearing price for supplying power to Texas grid –$31.65

#241

Post by oivey » Sun, Feb 21, 2021, 5:54 PM UTC

gruez wrote: post #193

oivey wrote: post #126

Earlier quoted context omitted.

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…

>The price of electric and natural gas skyrocketed during the shortage. AFAIK the price was capped. https://news.ycombinator.com/item?id=26160546

For context, the cap is nearly 100x the normal price. In colder states power companies manage to be profitable at around the normal price of electric in Texas. The price of winterization isn’t that high, and a company that did it could have made a year’s worth of profit last week. The cap was very high and did not contribute to the outage.

In your other post you say this is a once in a century event. It really isn’t. This is the 3rd time since 1989 that Texas has had outages due to insufficient winter prep. It’s more like a once in 10 years event.

Re: Clearing price for supplying power to Texas grid –$31.65

#242

Post by beerandt » Sun, Feb 21, 2021, 6:01 PM UTC

jasongill wrote: post #179

iso1210 wrote: post #170

Earlier quoted context omitted.

Why can't Texas simply output it's power to neighboring states?

Texas isn't connected to either of the two national power grids (east and west half of lower 48 states, roughly) so that their power system isn't subject to federal regulation.

That's just false- Texas has at least 5 DC interconnects, to both east and west US grids, as well as Mexico.

Edit: Check the last section on their real time status page:

http://www.ercot.com/content/cdr/html/real_time_system_condi...

Re: Clearing price for supplying power to Texas grid –$31.65

#243

Post by jtbayly » Sun, Feb 21, 2021, 6:50 PM UTC

PragmaticPulp wrote: post #47

Osiris wrote: post #35

Earlier quoted context omitted.

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…

In a truly free market, Texas would have simply received power production from nearby states that were connected into their grid. This isn't a free-market situation because the state has gone to great lengths to keep this power system isolated.

The other states that were struggling with blackouts? No. Being on the same grid wouldn’t have solved this, as far as I can tell.

Re: Clearing price for supplying power to Texas grid –$31.65

#244

Post by tyingq » Sun, Feb 21, 2021, 7:05 PM UTC

mikewarot wrote: post #232

tyingq wrote: post #220

Earlier quoted context omitted.

Reading about natural gas, it sounds like storage in underground natural geological pockets is common. And also in tanks, but liquified/LNG which is 600x more dense. As for coal, it sounds like they already typically receive coal in 120 train car shipments daily which is close to your 12000 ton figure. I imagine keeping lots of spare train cars around isn't a big engineering task.

>I imagine keeping lots of spare train cars around isn't a big engineering task. The solution I've seen in person is the "coal pile", with Caterpillar bulldozers on it, keeping the surface from combusting, and moving things around. They are proven simple technology, and work in winter. Keeping the coal in the train invites disaster, as rail infrastructure has issues with icing conditions.

Point taken, though disaster might be a strong word. It sounds like the net result is up to 20% of the coal sticking to the sides of the car. And there are ways to reduce that.

Re: Clearing price for supplying power to Texas grid –$31.65

#245

Post by Dylan16807 » Sun, Feb 21, 2021, 8:25 PM UTC

WalterBright wrote: post #76

Dylan16807 wrote: post #75

Earlier quoted context omitted.

> And what they got was no electricity when they needed it most. Yes. And what I'm saying is that it's a natural outcome of having a market. As far as I can tell you're arguing for "market pricing" but arguing against government interference in pricing, but I don't think you can have both of those at the same time. If the government doesn't intervene, most people will buy fixed-price electricity contracts instead of…

> you're arguing for "market pricing" but arguing against government interference in pricing Market pricing is prices not set by the government. By definition. > If the government doesn't intervene, most people will buy fixed-price electricity contracts instead of market-priced contracts. That's speculation. Even if true, it would be their choice. > Are you sure? They were being portrayed as victims in the news becau…

> Market pricing is prices not set by the government. By definition.

If a fixed rate contract counts as market pricing, then market pricing doesn't solve the problem.

> That's speculation. Even if true, it would be their choice.

It's their choice, but if enough people choose it then we run out of power.

> They were being portrayed as victims in the news because of their high bills. Having a bill means they had electricity.

Some of them had power, just like some people paying a fixed rate had power.

That doesn't mean that having such a contract gave you notably better odds of your power staying on. Even if it changed neighborhood priorities, that only gives you a very slight benefit for picking that plan.

Re: Clearing price for supplying power to Texas grid –$31.65

#246

Post by WalterBright » Sun, Feb 21, 2021, 8:50 PM UTC

Dylan16807 wrote: post #245

WalterBright wrote: post #76

Earlier quoted context omitted.

> you're arguing for "market pricing" but arguing against government interference in pricing Market pricing is prices not set by the government. By definition. > If the government doesn't intervene, most people will buy fixed-price electricity contracts instead of market-priced contracts. That's speculation. Even if true, it would be their choice. > Are you sure? They were being portrayed as victims in the news becau…

> Market pricing is prices not set by the government. By definition. If a fixed rate contract counts as market pricing, then market pricing doesn't solve the problem. > That's speculation. Even if true, it would be their choice. It's their choice, but if enough people choose it then we run out of power. > They were being portrayed as victims in the news because of their high bills. Having a bill means they had electr…

> If a fixed rate contract counts as market pricing, then market pricing doesn't solve the problem.

It will when people realize it means they won't suffer blackouts.

Currently, Texas doesn't have a fully market based system. For example, a market based system wouldn't shut power off to neighborhoods, it would be granular to the customer. But it takes time to evolve from the old system of government fixed prices.

I would also expect a market system to offer fixed price users an option when there's a supply crisis - go to a variable plan or get shut off.

You can have a system that reduces power use with blackouts, or one that reduces it by price.

Or you can have a government run system at a fixed price that is far higher, because you'll be paying for an inefficient government operation with all kinds of extra capacity and have peaker plants available at a moment's notice. Besides, that's also the least environmentally sound system.

Re: Clearing price for supplying power to Texas grid –$31.65

#247

Post by WalterBright » Sun, Feb 21, 2021, 8:52 PM UTC

tedunangst wrote: post #229

WalterBright wrote: post #161

Earlier quoted context omitted.

> absolutely no possibility They did have to decide which neighborhoods to cut. Wouldn't you cut first the neighborhoods that had fewer people on the variable plan?

Or did they cut neighborhoods without hospitals first? Is it possible some customers with spot pricing plans lived in the same neighborhood as a hospital?

They didn't cut power to neighborhoods with a police/fire station (I have a friend in Texas who wondered why his power didn't get cut). I don't know about hospitals. But hospitals usually have their own emergency generators.

BTW, the power to my house can be remotely and individually shut off any time the power company wants to (when they upgraded my meter). There's no reason this can't be used to shut off the fixed rate customers and leave the variable rate ones on.

Re: Clearing price for supplying power to Texas grid –$31.65

#248

Post by ncmncm » Sun, Feb 21, 2021, 9:57 PM UTC

GhostVII wrote: post #80

Osiris wrote: post #35

Earlier quoted context omitted.

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…

I don't think anybody said the market solves all problems. It's completely possible to have a free market with some regulations, you just say that to participate in the market you must meet certain reliability standards, like being able to withstand low temperatures for a long period of time. Private businesses can count on being bailed out when once in a few decade disasters happen (which makes some sense, imo, sinc…

Many people do, in fact, insist the free market solves all problems. Many of them are in public office, many of them in Texas.

In practice, there is nothing your typical free-market evangelist likes better than a government-subsidized monopoly, but preferably without any pesky regulations.

Re: Clearing price for supplying power to Texas grid –$31.65

#249

Post by glenneroo » Sun, Feb 21, 2021, 10:04 PM UTC

baybal2 wrote: post #189

baybal2 wrote: post #186

Access Denied Error 16 www.ercot.com 2021-02-21 13:10:47 UTC If you believe you have a valid business reason for accessing ERCOT resources, please contact the ERCOT HelpDesk at 512-248-6800 or 1-866-870-8124 (USA) or HelpDesk@ercot.com. Imperva

Did we DDOS them?

I get the same error but at the bottom it says:

> This request was blocked by the security rules

They are probably just blocking everyone outside the US.

Re: Clearing price for supplying power to Texas grid –$31.65

#250

Post by Dylan16807 » Sun, Feb 21, 2021, 10:21 PM UTC

WalterBright wrote: post #246

Dylan16807 wrote: post #245

Earlier quoted context omitted.

> Market pricing is prices not set by the government. By definition. If a fixed rate contract counts as market pricing, then market pricing doesn't solve the problem. > That's speculation. Even if true, it would be their choice. It's their choice, but if enough people choose it then we run out of power. > They were being portrayed as victims in the news because of their high bills. Having a bill means they had electr…

> If a fixed rate contract counts as market pricing, then market pricing doesn't solve the problem. It will when people realize it means they won't suffer blackouts. Currently, Texas doesn't have a fully market based system. For example, a market based system wouldn't shut power off to neighborhoods, it would be granular to the customer. But it takes time to evolve from the old system of government fixed prices. I wo…

If you can manage to have per-customer cutoffs, yes that would solve the problem.

I was talking in the context of what could help with the current grid design.

And heck if you can get even a fraction of that improvement in controlled cutoffs, then you can avoid this kind of blackout even without anything else. Because it would actually be possible to roll the blackout and only have people lose power for a few hours at a time.