6 ms·

Perhaps I'm not fully understanding how this works, but could one conceivably run a business whose only product is predicting when the price will go negative an

Perhaps I'm not fully understanding how this works, but could one conceivably run a business whose only product is predicting when the price will go negative and "wasting" power?

S_A_P 9y ago
Power traders do this all the time. Each power plant/wind farm/solar farm has a generation cost and a time span that is required for startup or shut down. Balancing these factors and meeting demand the cheapest way possible is their business. Also keep in mind that the price to consumers will never be negative. This would be only the generation and distribution side of the house.
nine_k 9y ago
While the utility of electricity for consumers may become zero, transport of it via the grid still costs money. So for producers the electricity price becomes negative.
NamTaf 9y ago
You could even go so far as to have a bank of batteries, be paid to take in power, then earn money selling it back to the grid later when prices are positive.
- LeifCarrotson 9y ago
  You'd probably need more batteries than would be economically feasible in that precise setup. But a similar scheme is used with electric water pumps and hydroelectric turbines. It's called pumped hydro: https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...
  - maxerickson 9y ago
    Grid batteries are starting to come online. A somewhat special case is Fairbanks (which is isolated, so the economics kick in earlier): http://www.windpowerengineering.com/design/electrical/battery-stores-40-mw-for-ankorage-emergencies/ http://www.windpowerengineering.com/design/electrical/batter... A much larger installation is planned in China (different tech too): http://www.engineering.com/DesignerEdge/DesignerEdgeArticles/ArticleID/12312/Massive-800-MegaWatt-hour-Battery-to-Be-Deployed-in-China.aspx http://www.engineering.com/DesignerEdge/DesignerEdgeArticles... There are also some megawatt-hour scale lithium-ion experiments at substations.
    - jonatron 9y ago
      There is a trial in the UK: http://www.bbc.co.uk/news/av/business-30488657/leighton-buzzard-electricity-facility-tests-largest-battery http://www.bbc.co.uk/news/av/business-30488657/leighton-buzz...
    - 205guy 9y ago
      There is also a Tesla/SolarCity solar+battery plant in Hawaii that opened earlier this year and is currently operational. It is 13 GWh and 52 GW, thus it provides 13 GW of stored solar energy for 4 hours after the sun goes away. http://thegardenisland.com/business/energy/kiuc-opens-new-megawatt-hour-solar-farm/article_29e735ee-6cbc-5f64-b8d0-d34778144fb8.html?mode=jqm http://thegardenisland.com/business/energy/kiuc-opens-new-me...
      - maxerickson 9y ago
        * Megawatts But a good example that grid batteries are starting to make sense for power companies.
- emmelaich 9y ago
  There are many ways to store energy. Molten salt has been used in Spain and Arizon USA, but not at huge scale. https://en.wikipedia.org/wiki/Thermal_energy_storage#Molten_salt_technology https://en.wikipedia.org/wiki/Thermal_energy_storage#Molten_...
marcell 9y ago
You could mine bitcoins :)
- incompatible 9y ago
  It would be idle most of the year though. Perhaps a big bank of resistors would be cheap enough to soak up some of that negative priced power and profit.
jweir 9y ago
It is a signal to ramp down or if you have a storage facility store. If the prices remain negative or low for long periods it is a indicator to build transmission to where prices are high. Or if yours are a consumer build you factor or data center in the zone with low prices.
deleted 9y ago
[deleted]
manacit 9y ago
Perhaps not just when prices are negative, but it's not an uncommon practice to 'store' power by pumping water uphill when it's cheap and demand is low (generally at night), and then using that potential energy to generate and sell it when electricity is more expensive. I have absolutely no clue what it would take to make that profitable, but it's a strategy for handling the natural spikes of demand when using power generation methods like solar and wind that are unable to adjust quickly to changing demand.
- jweir 9y ago
  A lot of hyrdro plants have exactly that ability. Buy low sell high.
  - k__ 9y ago
    So they could now make money when buying AND selling?
    - jamesrom 9y ago
      Just like everything else, yes.
      - wapz 9y ago
        I don't think there are too many products that you can make money from buying. The few I can think of are things like bee hives (paid to remove it and paid for the bees), dirt/sand in abundance areas (I'm not sure they sell it), and other natural resources. Most of them you're getting paid for removal and not buying though.
        oh_sigh 9y ago
        Housing and real property can sometimes effectively work that way, where you are paid for buying because you are taking on responsibilities by purchasing the property(say, for liens, cleanup, etc)
deleted 9y ago
[deleted]
Baeocystin 9y ago
Aluminum smelters already do exactly that. They use power no matter what, of course, but are well-positioned to be able to absorb massive amounts of electricity when the cost structure makes it beneficial to do so.
- daveguy 9y ago
  Why aluminum smelters in particular? The process has a wide range of parallelism? It seems like most industrial processes would adjust more on demand.
  - Baeocystin 9y ago
    The way you separate aluminum from alumina is by electrolysis. Like you guessed, it is highly parallel. It is as simple as having hundreds of pots, each with huge carbon electrodes, dumping megawatts of power into the molten matrix to extract the metal. And it consumes an obscene amount of power to do so. https://www.youtube.com/watch?v=fa6KEwWY9HU&feature=youtu.be&t=1m8s https://www.youtube.com/watch?v=fa6KEwWY9HU&feature=youtu.be... https://theconversation.com/the-trouble-with-aluminium-7245 https://theconversation.com/the-trouble-with-aluminium-7245 This is also the primary reason that aluminum recycling is so beneficial. It is dirt cheap to remelt already refined aluminum vs. smelting fresh ore, even though aluminum itself is an exceptionally common element.
    - crazy2be 9y ago
      Yes, but aluminium smelting has certain constraints - namely, the molten metal cannot solidify[1]. This restricts your ability to quickly spin up and down smelters, but they are still potentially a very useful part of an energy smoothing strategy. [1] https://en.wikipedia.org/wiki/Aluminium_smelting https://en.wikipedia.org/wiki/Aluminium_smelting
      - Baeocystin 9y ago
        Sure. But the thermal mass of an in-use pot is significant, and that buys you time. You can read more about the details here: http://www.aluminiumtoday.com/contentimages/features/Oyeweb.pdf http://www.aluminiumtoday.com/contentimages/features/Oyeweb.... It's a well-done summary, I think you'll find it interesting. The tl;dr is that power interruptions up to ~4-5 hours do not cause significant trouble.
dredmorbius 9y ago
That's what energy storage is. Another concept is "dispatchable load". With fuel-driven generation, you have dispatchable power -- additinal generating capacity is brought online to meet anticipated demand. With dispatchable load, some process which can be rapidly activated or deactivated with little loss in overall efficiency is utilised. Examples would be water pumping (simply for water storage, irrigation, or other uses, not pumped-hydro power storage), or aluminium smelting, or electrically-driven thermal or reduction processes. An equivalent concept is "make hay while the sun shines". The Sun's power isn't dispatchable (though it's fairly predictable), and if you're doing something that relies on it, you're best advised to make use of it whilst you can.
jcfrei 9y ago
There's a facility in Switzerland which does exactly that: http://www.alpiq.com/news-stories/media-releases/media_releases.jsp?news=tcm:95-150090 http://www.alpiq.com/news-stories/media-releases/media_relea... It provides "negative balancing energy" and turns water into steam.
ocschwar 9y ago
If you own a large building or campus, you can get an ice maker to integrate into your HVAC system, and exploit electricity price dips. Thenwhen juice is pricy, you're just running air past your stored ice instead of running the AC. The one catch is if you want this, you essentially have to let the utility control your system over TCP/IP
- greglindahl 9y ago
  Done since the 1960s.
Sukotto 9y ago
Yes. Modeling the load on the grid and anticipating supply/demand is basically what energy commodities traders do. If you can provide superior guesses about prices, then you'd have traders lining up to buy your service.
mschaef 9y ago
I'm thinking that'd be a stretch. Anything that would sink enough power would have high capital costs, and negative prices (in my experience in US power markets) don't occur all that often. If you tried this as your primary business model, you'd wind up with a lot of money sunk in assets that may or may not pay off (and if they do pay off, will happen indeterminately in the future).

Perhaps I'm not fully understanding how this works, but could one conceivably run a business whose only product is predicting when the price will go negative and "wasting" power?

S_A_P 9y ago

Power traders do this all the time. Each power plant/wind farm/solar farm has a generation cost and a time span that is required for startup or shut down. Balancing these factors and meeting demand the cheapest way possible is their business. Also keep in mind that the price to consumers will never be negative. This would be only the generation and distribution side of the house.

nine_k 9y ago

While the utility of electricity for consumers may become zero, transport of it via the grid still costs money. So for producers the electricity price becomes negative.

NamTaf 9y ago

You could even go so far as to have a bank of batteries, be paid to take in power, then earn money selling it back to the grid later when prices are positive.

LeifCarrotson 9y ago
You'd probably need more batteries than would be economically feasible in that precise setup. But a similar scheme is used with electric water pumps and hydroelectric turbines. It's called pumped hydro: https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...
- maxerickson 9y ago
  Grid batteries are starting to come online. A somewhat special case is Fairbanks (which is isolated, so the economics kick in earlier): http://www.windpowerengineering.com/design/electrical/battery-stores-40-mw-for-ankorage-emergencies/ http://www.windpowerengineering.com/design/electrical/batter... A much larger installation is planned in China (different tech too): http://www.engineering.com/DesignerEdge/DesignerEdgeArticles/ArticleID/12312/Massive-800-MegaWatt-hour-Battery-to-Be-Deployed-in-China.aspx http://www.engineering.com/DesignerEdge/DesignerEdgeArticles... There are also some megawatt-hour scale lithium-ion experiments at substations.
  - jonatron 9y ago
    There is a trial in the UK: http://www.bbc.co.uk/news/av/business-30488657/leighton-buzzard-electricity-facility-tests-largest-battery http://www.bbc.co.uk/news/av/business-30488657/leighton-buzz...
  - 205guy 9y ago
    There is also a Tesla/SolarCity solar+battery plant in Hawaii that opened earlier this year and is currently operational. It is 13 GWh and 52 GW, thus it provides 13 GW of stored solar energy for 4 hours after the sun goes away. http://thegardenisland.com/business/energy/kiuc-opens-new-megawatt-hour-solar-farm/article_29e735ee-6cbc-5f64-b8d0-d34778144fb8.html?mode=jqm http://thegardenisland.com/business/energy/kiuc-opens-new-me...
    - maxerickson 9y ago
      * Megawatts But a good example that grid batteries are starting to make sense for power companies.
emmelaich 9y ago
There are many ways to store energy. Molten salt has been used in Spain and Arizon USA, but not at huge scale. https://en.wikipedia.org/wiki/Thermal_energy_storage#Molten_salt_technology https://en.wikipedia.org/wiki/Thermal_energy_storage#Molten_...

marcell 9y ago

You could mine bitcoins :)

incompatible 9y ago
It would be idle most of the year though. Perhaps a big bank of resistors would be cheap enough to soak up some of that negative priced power and profit.

jweir 9y ago

It is a signal to ramp down or if you have a storage facility store. If the prices remain negative or low for long periods it is a indicator to build transmission to where prices are high. Or if yours are a consumer build you factor or data center in the zone with low prices.

deleted 9y ago

[deleted]

manacit 9y ago

Perhaps not just when prices are negative, but it's not an uncommon practice to 'store' power by pumping water uphill when it's cheap and demand is low (generally at night), and then using that potential energy to generate and sell it when electricity is more expensive. I have absolutely no clue what it would take to make that profitable, but it's a strategy for handling the natural spikes of demand when using power generation methods like solar and wind that are unable to adjust quickly to changing demand.

jweir 9y ago
A lot of hyrdro plants have exactly that ability. Buy low sell high.
- k__ 9y ago
  So they could now make money when buying AND selling?
  - jamesrom 9y ago
    Just like everything else, yes.
    - wapz 9y ago
      I don't think there are too many products that you can make money from buying. The few I can think of are things like bee hives (paid to remove it and paid for the bees), dirt/sand in abundance areas (I'm not sure they sell it), and other natural resources. Most of them you're getting paid for removal and not buying though.
      - oh_sigh 9y ago
        Housing and real property can sometimes effectively work that way, where you are paid for buying because you are taking on responsibilities by purchasing the property(say, for liens, cleanup, etc)

deleted 9y ago

[deleted]

Baeocystin 9y ago

Aluminum smelters already do exactly that. They use power no matter what, of course, but are well-positioned to be able to absorb massive amounts of electricity when the cost structure makes it beneficial to do so.

daveguy 9y ago
Why aluminum smelters in particular? The process has a wide range of parallelism? It seems like most industrial processes would adjust more on demand.
- Baeocystin 9y ago
  The way you separate aluminum from alumina is by electrolysis. Like you guessed, it is highly parallel. It is as simple as having hundreds of pots, each with huge carbon electrodes, dumping megawatts of power into the molten matrix to extract the metal. And it consumes an obscene amount of power to do so. https://www.youtube.com/watch?v=fa6KEwWY9HU&feature=youtu.be&t=1m8s https://www.youtube.com/watch?v=fa6KEwWY9HU&feature=youtu.be... https://theconversation.com/the-trouble-with-aluminium-7245 https://theconversation.com/the-trouble-with-aluminium-7245 This is also the primary reason that aluminum recycling is so beneficial. It is dirt cheap to remelt already refined aluminum vs. smelting fresh ore, even though aluminum itself is an exceptionally common element.
  - crazy2be 9y ago
    Yes, but aluminium smelting has certain constraints - namely, the molten metal cannot solidify[1]. This restricts your ability to quickly spin up and down smelters, but they are still potentially a very useful part of an energy smoothing strategy. [1] https://en.wikipedia.org/wiki/Aluminium_smelting https://en.wikipedia.org/wiki/Aluminium_smelting
    - Baeocystin 9y ago
      Sure. But the thermal mass of an in-use pot is significant, and that buys you time. You can read more about the details here: http://www.aluminiumtoday.com/contentimages/features/Oyeweb.pdf http://www.aluminiumtoday.com/contentimages/features/Oyeweb.... It's a well-done summary, I think you'll find it interesting. The tl;dr is that power interruptions up to ~4-5 hours do not cause significant trouble.

dredmorbius 9y ago

That's what energy storage is. Another concept is "dispatchable load". With fuel-driven generation, you have dispatchable power -- additinal generating capacity is brought online to meet anticipated demand. With dispatchable load, some process which can be rapidly activated or deactivated with little loss in overall efficiency is utilised. Examples would be water pumping (simply for water storage, irrigation, or other uses, not pumped-hydro power storage), or aluminium smelting, or electrically-driven thermal or reduction processes. An equivalent concept is "make hay while the sun shines". The Sun's power isn't dispatchable (though it's fairly predictable), and if you're doing something that relies on it, you're best advised to make use of it whilst you can.

jcfrei 9y ago

There's a facility in Switzerland which does exactly that: http://www.alpiq.com/news-stories/media-releases/media_releases.jsp?news=tcm:95-150090 http://www.alpiq.com/news-stories/media-releases/media_relea... It provides "negative balancing energy" and turns water into steam.

ocschwar 9y ago

If you own a large building or campus, you can get an ice maker to integrate into your HVAC system, and exploit electricity price dips. Thenwhen juice is pricy, you're just running air past your stored ice instead of running the AC. The one catch is if you want this, you essentially have to let the utility control your system over TCP/IP

greglindahl 9y ago
Done since the 1960s.

Sukotto 9y ago

Yes. Modeling the load on the grid and anticipating supply/demand is basically what energy commodities traders do. If you can provide superior guesses about prices, then you'd have traders lining up to buy your service.

mschaef 9y ago

I'm thinking that'd be a stretch. Anything that would sink enough power would have high capital costs, and negative prices (in my experience in US power markets) don't occur all that often. If you tried this as your primary business model, you'd wind up with a lot of money sunk in assets that may or may not pay off (and if they do pay off, will happen indeterminately in the future).