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So if you operate a windmill in your backyard while prices are negative the power company will send you a bill? Why couldn't the power company just break the ci

So if you operate a windmill in your backyard while prices are negative the power company will send you a bill? Why couldn't the power company just break the circuit if they couldn't handle the incoming power? The windmill would still spin but not generate any power, like a gas generator with nothing plugged in. Seems better than sending the windmill operator a bill so the power company can generate a bunch of steam 100s of miles away...

post_break 9y ago
Still need to maintain the grid, that isn't free.
- joshribakoff 9y ago
  if you had an extension cord running from your gas generator to your neighbors house and he doesn't want anymore power, couldn't he just unplug on his end? What kind of maintenance costs are we talking about? I can understand if a tornado knocks down your power lines, but how does the amount of power on those lines increase costs? And if the person on the other end unplugs isn't there no electricity running on those lines anyways?
  - jamesrom 9y ago
    Negative prices are incentive to unplug your own generator. It's distributed by nature. Centralizing control is pretty much the exact opposite of what you want in an electrical grid.
  - post_break 9y ago
    If your extension cord had the amount of copper a mains line had it would have cost thousands of dollars. Now imagine if you ran these extension cords through to every neighbor in a city. And then there is a storm that takes some of those extension cords out. Then you have to have a truck with a cherry picker to get up there and fix them. Well then you need to hire people to do that. Then you need insurance to cover them. Etc.
    - jamesredman 9y ago
      Electricity is run long distances with high voltage and transformers, not super thick copper wires.
ocschwar 9y ago
Not realy. There are TWO markets for electricity. One is the Day Ahead system, where producers and consumers agree on who runs what generators and who consumes how much, in 24 hours. The real time market, meanwhile, covers who it is who has to adjust his production or consumption to cover the difference between what everyone thought would happen 24 hours ago and what happens now. The real time price hits negative, but it's only the delta between real time volume and day-ahead volume that's traded at the negative price. And it's the people who are turning knobs, being paid by those who are sticking to what they planned to do at the Day Ahead market.
ars 9y ago
Sigh. This gets posted so many times. There are no negative prices. Here's how it works: Generators put out bids for how much they can produce and the price. Consumers pull in the bids ordered by price until they have enough power. After that they pay everyone the highest price for the power. So making your power negative just means you want to be first on the list. You don't actually get paid negative money. It's just a tactic.
- snowwindwaves 9y ago
  If demand is low then the highest price can be negative. When prices are negative Generators have to pay for the power they produced, for the privilege of not shutting down their process be it nuclear, coal etc. presumably hydro and natural gas would shut down in response to negative prices.
  - ars 9y ago
    This doesn't happen. If you shut down every fast responding power source, then there is not enough power and the price will not go negative. For example the article talks about wind. Wind generators have no problem shutting down. No, it's not about the privilege of not shutting down, it's what I said: it's simply the bottom of the order book, not the actual flow of money.
    - snowwindwaves 9y ago
      The article is about this just happening in the UK. For 5 consecutive hours the price was minus $25. It also happens in Ontario, and maybe elsewhere but I don't know as much about how other markets deal with oversupply. Wind generators generally have fixed price contracts for as much as they can produce so they carry on generating even if the price is negative and they get the same positive price. Or if they do have to shut down for system reliability they will get paid even though they didn't generate any power. That is called being constrained off. If the price is negative it is because generators would rather pay than go offline. The nuclear plants in Ontario will bid negative because they have real costs if they have to alter their output. I maintain that the price is negative because the highest selected bid was negative, and any generators producing during those 5 hours had to pay $25 for every MWH they produced. are you in the power business in the UK? I used to work on software that implemented the market settlement rules in Ontario in order to calculate a distribution utility's cost of power every day, and I've also spoken at length with an economist who wrote market rules, and examined the behavior of the market participants for compliance with the rules, but it is possible that the uk and Ontario markets differ in this regard, although the article indicates the price was negative.

post_break 9y ago

Still need to maintain the grid, that isn't free.

joshribakoff 9y ago
if you had an extension cord running from your gas generator to your neighbors house and he doesn't want anymore power, couldn't he just unplug on his end? What kind of maintenance costs are we talking about? I can understand if a tornado knocks down your power lines, but how does the amount of power on those lines increase costs? And if the person on the other end unplugs isn't there no electricity running on those lines anyways?
- jamesrom 9y ago
  Negative prices are incentive to unplug your own generator. It's distributed by nature. Centralizing control is pretty much the exact opposite of what you want in an electrical grid.
- post_break 9y ago
  If your extension cord had the amount of copper a mains line had it would have cost thousands of dollars. Now imagine if you ran these extension cords through to every neighbor in a city. And then there is a storm that takes some of those extension cords out. Then you have to have a truck with a cherry picker to get up there and fix them. Well then you need to hire people to do that. Then you need insurance to cover them. Etc.
  - jamesredman 9y ago
    Electricity is run long distances with high voltage and transformers, not super thick copper wires.

ocschwar 9y ago

Not realy. There are TWO markets for electricity. One is the Day Ahead system, where producers and consumers agree on who runs what generators and who consumes how much, in 24 hours. The real time market, meanwhile, covers who it is who has to adjust his production or consumption to cover the difference between what everyone thought would happen 24 hours ago and what happens now. The real time price hits negative, but it's only the delta between real time volume and day-ahead volume that's traded at the negative price. And it's the people who are turning knobs, being paid by those who are sticking to what they planned to do at the Day Ahead market.

ars 9y ago

Sigh. This gets posted so many times. There are no negative prices. Here's how it works: Generators put out bids for how much they can produce and the price. Consumers pull in the bids ordered by price until they have enough power. After that they pay everyone the highest price for the power. So making your power negative just means you want to be first on the list. You don't actually get paid negative money. It's just a tactic.

snowwindwaves 9y ago
If demand is low then the highest price can be negative. When prices are negative Generators have to pay for the power they produced, for the privilege of not shutting down their process be it nuclear, coal etc. presumably hydro and natural gas would shut down in response to negative prices.
- ars 9y ago
  This doesn't happen. If you shut down every fast responding power source, then there is not enough power and the price will not go negative. For example the article talks about wind. Wind generators have no problem shutting down. No, it's not about the privilege of not shutting down, it's what I said: it's simply the bottom of the order book, not the actual flow of money.
  - snowwindwaves 9y ago
    The article is about this just happening in the UK. For 5 consecutive hours the price was minus $25. It also happens in Ontario, and maybe elsewhere but I don't know as much about how other markets deal with oversupply. Wind generators generally have fixed price contracts for as much as they can produce so they carry on generating even if the price is negative and they get the same positive price. Or if they do have to shut down for system reliability they will get paid even though they didn't generate any power. That is called being constrained off. If the price is negative it is because generators would rather pay than go offline. The nuclear plants in Ontario will bid negative because they have real costs if they have to alter their output. I maintain that the price is negative because the highest selected bid was negative, and any generators producing during those 5 hours had to pay $25 for every MWH they produced. are you in the power business in the UK? I used to work on software that implemented the market settlement rules in Ontario in order to calculate a distribution utility's cost of power every day, and I've also spoken at length with an economist who wrote market rules, and examined the behavior of the market participants for compliance with the rules, but it is possible that the uk and Ontario markets differ in this regard, although the article indicates the price was negative.