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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

#51

Post by cperciva »

cetra3 wrote: post #28

I wish these prices were reflected to the consumer. Electricity bills in South Australia are ridiculous, and as a renter you don't have the luxury of installing solar panels.

The "retail" cost of power is always going to be higher than the "manufacturer wholesale" price, due to the cost of operating the grid.

Also, while I don't know details of the Australian electrical market, if it's anything like most of the world the consumer prices are regulated -- you don't get deep discounts during "cheap electricity" hours, but you also don't pay incredibly high rates during the days when e.g. people are running air conditioning during a heat wave and a couple major power plants had to be taken offline for emergency maintenance work simultaneously.

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

#52

Post by thaumasiotes »

duckymcduckface wrote: post #38
thaumasiotes wrote: post #29

Earlier quoted context omitted.

I think the dominant question here is, "I have this machinery that produces electricity, and it's hooked up to the grid. Why can't I also hook it up to the ground, and -- during periods of negative prices -- send the electricity into the ground instead of the grid?" Nobody charges you to ground your wires.

The ground is a poor load and also there's a finite amount of energy you can dump into it because every watt that goes in gets turned into heat, you'd liquify the ground very quickly at the multi MW scale.

We routinely dump lightning bolts right into the ground and they go well beyond multiple megawatts. They're very brief, but if lightning took ten seconds to strike, it would still provide several dozen megawatts of power. How quickly would we be melting the ground at the multi-MW scale? How many lightning bolts would it take before the ground around my house melted and flowed downhill?

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

#53

Post by droithomme »

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 negative rates. It's as simple as that.

How much you can charge has nothing to do with your cost. Your amortized cost of providing excess power every sunny mid-day might be extravagant. That is no matter as far as the market is concerned.

Solar energy production still costs a lot. But there's tons of articles claiming that it's now cheaper than pretty much every other energy source. Yes, it's cheaper to buy at noon in sunny areas during some months because of economics. That doesn't mean it's cheaper to produce and supply though.

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

#54

Post by coin »

steve19 wrote: post #15
wyxuan wrote: post #12

Earlier quoted context omitted.

Can’t they discharge it for free? Why do they have to pay to send it into the grid? The crypto one won’t work because there would only be free electricity half of the time, and the water idea is good but it takes immense capex and time to make

The grid has to finely balance supply and demand. You can't just dump power into the grid. If you did the grid frequency would increase out of spec and it could damage connected equipment and machinery. Water storage would only work if there is a steep mountain or big hill nearby. Another way to look at negitive pricing is the grid is paying industrial users to burn as much power as they can.

How does excess electricity impact the frequency?

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

#55

Post by roenxi »

rosege wrote: post #8

I'm in SA and I'm currently looking at getting solar panels and maybe a battery because we have the highest cost of electricity in the country. I'd like to know why we have the highest when the price seems to be going negative every other day?

The market reacts quite quickly if a company is going bankrupt; so assume for the sake of argument that all the electricity producers in the market are turning at least a small profit.

If power prices are negative but the provider is making a profit, then at some other time prices will have to be very high to bring the average price sold positive.

I assume that is what is happening here. I don't have a lot of respect for SA's electricity strategy, but it may work out. At least there are interesting opportunities if anyone can think of a way of profitably sinking vast amounts of power; there has to be something useful that can be done. Ironically in this case, using more power might reduce power prices because the providers don't need to charge as much in off-peak times.

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

#56

Post by droithomme »

wyxuan wrote: post #12
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.

Can’t they discharge it for free? Why do they have to pay to send it into the grid? The crypto one won’t work because there would only be free electricity half of the time, and the water idea is good but it takes immense capex and time to make

> Can’t they discharge it for free?

Yes they can and should and that's why they have to pay since there is a mitigation cost to handling the excess.

> Why do they have to pay to send it into the grid?

Because it's bad when there is a glut of overproduction.

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

#57

Post by cperciva »

Felz wrote: post #47
cetra3 wrote: post #28

I wish these prices were reflected to the consumer. Electricity bills in South Australia are ridiculous, and as a renter you don't have the luxury of installing solar panels.

I'm not sure how South Australia works, but I think in general you pay for the cost of electricity generated (here going to zero) AND for the infrastructure required to get it to your house. In part that's why rooftop solar is hazardous for a grid in high amounts- you don't pay the infrastructure price half the time, but the infrastructure still has to be there for you.

Indeed -- so called "net metering" ignores the fact that the costs are driven by both consumption and capacity. Providing a 400A supply to a house is expensive even if you never draw any power, because the utility has to be ready to provide the power.

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

#58

Post by solotronics »

apendleton wrote: post #17
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.

Anything you could do it with it would have capital costs. Maybe it's transient enough that that money would be better invested elsewhere. Like, if you only run your cryptocurrency mining when the price is negative, your capital is stuck in an idle asset most of the time, and if you run it all the time, it's the average price you want to consider, not the minimum price (even if the minimum price is negative), and my…

There are older bitcoin ASIC miners that aren't nearly as efficient but if you are getting totally free electricity... definately an opportunity here.

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

#59

Post by cperciva »

nl wrote: post #46
stOneskull wrote: post #40

Earlier quoted context omitted.

Good stuff. I was wondering if maybe a desalination plant could work..

How? Or was that meant ironically? Desalination plants use a lot of power, but it's not obvious to me how to use it to store power.

The idea there isn't that you store power but rather that you only run the plant when power is cheap (and then keep a large enough fresh water reservoir to serve demand until the next cheap electricity arrives). Demand management rather than supply management, effectively.

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

#60

Post by [deleted] »

apendleton wrote: post #17
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.

Anything you could do it with it would have capital costs. Maybe it's transient enough that that money would be better invested elsewhere. Like, if you only run your cryptocurrency mining when the price is negative, your capital is stuck in an idle asset most of the time, and if you run it all the time, it's the average price you want to consider, not the minimum price (even if the minimum price is negative), and my…

[deleted]
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