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In Germany, wholesale power prices can actually go negative on sunny afternoons. Conditions in the US are trending towards that. Why should actual generators g

In Germany, wholesale power prices can actually go negative on sunny afternoons. Conditions in the US are trending towards that. Why should actual generators get paid low (or negative) wholesale prices at the exact same moment that some consumer gets paid full retail rates? It doesn't make sense. Very practically, this is illustrated by California's duck curve. Also from Bloomberg: http://www.bloomberg.com/news/articles/2015-10-21/california-s-duck-curve-is-about-to-jolt-the-electricity-grid http://www.bloomberg.com/news/articles/2015-10-21/california... It has nothing to do with Musk and Buffet. How do you price power, both wholesale and retail, in a way that recognizes that there's a need to provide power even when it has been overcast for three weeks? It's crazy to unfairly penalize power companies just because the public loves solar power. It's a complicated question.

cbr 11y ago
Specifically: http://assets.bwbx.io/images/ilVXr6BF7iAU/v4/-1x-1.png http://assets.bwbx.io/images/ilVXr6BF7iAU/v4/-1x-1.png
- ZeroGravitas 11y ago
  It's a little weird that the article claims that the problem is worst in winter, when there is least sun. Also, that graph is unreadable? I'm already aware of what the duck curve is, and I can't make head nor tail of it.
  - rhino369 11y ago
    I bet it's a problem in the winter due to A/C and electric heating. When it's sunny in summer, solar production goes up but it also makes people use A/C more. There is significant canceling out. In winter, solar production goes up, but people use less energy due to electric heaters not be as needed since it's warmer. Not a lot of the country uses electric heaters, but it's enough to add to the problem.
skolos 11y ago
You are talking about spot market prices, not wholesale power prices. Most of the wholesale prices are established in forward markets (several months to a day ahead) and I don't remember ever seeing them negative. So following your logic it would be unfair that some power plants can run and earn positive income (when their production is sold forward) at the same time when other need to pay to run (when their production is sold on spot market). But there is nothing wrong in this - that's how balancing in power markets works. Also you mentioned that wholesale and retail power prices can be very different. There are multiple of reasons why this is the case, but the important result is that consumers do not understand how balancing market works and why prices can be one hour $1000 and the next negative. If we want to encourage solar power installations by retail customers the pricing should also be based on retail model. So I would disagree that your comment about negative prices is relevant to how prices should be set for power produced by home solar panels. But I do agree - it is quite complicated question as most questions concerning power grid.

cbr 11y ago

Specifically: http://assets.bwbx.io/images/ilVXr6BF7iAU/v4/-1x-1.png http://assets.bwbx.io/images/ilVXr6BF7iAU/v4/-1x-1.png

ZeroGravitas 11y ago
It's a little weird that the article claims that the problem is worst in winter, when there is least sun. Also, that graph is unreadable? I'm already aware of what the duck curve is, and I can't make head nor tail of it.
- rhino369 11y ago
  I bet it's a problem in the winter due to A/C and electric heating. When it's sunny in summer, solar production goes up but it also makes people use A/C more. There is significant canceling out. In winter, solar production goes up, but people use less energy due to electric heaters not be as needed since it's warmer. Not a lot of the country uses electric heaters, but it's enough to add to the problem.

skolos 11y ago

You are talking about spot market prices, not wholesale power prices. Most of the wholesale prices are established in forward markets (several months to a day ahead) and I don't remember ever seeing them negative. So following your logic it would be unfair that some power plants can run and earn positive income (when their production is sold forward) at the same time when other need to pay to run (when their production is sold on spot market). But there is nothing wrong in this - that's how balancing in power markets works. Also you mentioned that wholesale and retail power prices can be very different. There are multiple of reasons why this is the case, but the important result is that consumers do not understand how balancing market works and why prices can be one hour $1000 and the next negative. If we want to encourage solar power installations by retail customers the pricing should also be based on retail model. So I would disagree that your comment about negative prices is relevant to how prices should be set for power produced by home solar panels. But I do agree - it is quite complicated question as most questions concerning power grid.