7 ms·

As noted in the article, wind power is highly variable, but other sources have the opposite problem: Slow ramp up and ramp down times. If you're running a mas

by Lazare 11y ago

As noted in the article, wind power is highly variable, but other sources have the opposite problem: Slow ramp up and ramp down times. If you're running a massive coal plant (and nuclear is ten times worse), you can't just turn it off for 5 minutes if the last 5 minute auction didn't go your way. Even if you think the next 10-20 auctions won't be economical for you to win and you start the shut down process, you'll still need to get rid of that power you're generating in the meantime. What (probably) happened is that the a combination of high wind production and low demand meant the system temporarily had a surplus of power, and some (non-wind) producers actually were selling power at a loss just to get rid of it because they couldn't wind their systems down fast enough. Which is a much more interesting story than "federal government subsidies wind". Shame Slate didn't talk about it.

venning 11y ago
Your point is an interesting one and leads me to an odd conclusion: the presence of wind producers in this market is not a requirement for negative prices. Assuming the author is accurately describing the market, by definition, the bids of wind producers will always account for a minority of the capacity. Which means the other 70+ percent of the supply is coming from other producers. If your explanation holds, then coal producers and the like were bidding themselves at a loss, which seems like that is a state that could happen even in the absence of wind producers. I can see how the wind producers are affecting this, but they're not a requirement. If there was a transition to considerably lower-usage electrical devices within Texas, the relative gap between demand and capacity of the existing producers would result in the same effect on the market: everyone scrambling to deal with ramp downs even at a loss. It's just that the wind farms produced that gap on the supply side instead.
- owen_griffiths 11y ago
  no wind is not a requirement, but the variability wind adds is so strong this may never happen in practice without wind power. if there was a general move to lower power use, the market would adjust to the lower level. it is the unpredictable variability that causes the negative prices.

by Lazare 11y ago

venning 11y ago

Your point is an interesting one and leads me to an odd conclusion: the presence of wind producers in this market is not a requirement for negative prices. Assuming the author is accurately describing the market, by definition, the bids of wind producers will always account for a minority of the capacity. Which means the other 70+ percent of the supply is coming from other producers. If your explanation holds, then coal producers and the like were bidding themselves at a loss, which seems like that is a state that could happen even in the absence of wind producers. I can see how the wind producers are affecting this, but they're not a requirement. If there was a transition to considerably lower-usage electrical devices within Texas, the relative gap between demand and capacity of the existing producers would result in the same effect on the market: everyone scrambling to deal with ramp downs even at a loss. It's just that the wind farms produced that gap on the supply side instead.

owen_griffiths 11y ago
no wind is not a requirement, but the variability wind adds is so strong this may never happen in practice without wind power. if there was a general move to lower power use, the market would adjust to the lower level. it is the unpredictable variability that causes the negative prices.