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So, I work in this field, and I have to find it really annoying to see the NYTimes miss the big picture. The price for electricity tomorrow from 12 to 1 was se

So, I work in this field, and I have to find it really annoying to see the NYTimes miss the big picture. The price for electricity tomorrow from 12 to 1 was set in the Day Ahead Market already, by all the participants (generator owners, utilities, big consumers.) At that market (making up numbers for the sake of explanation), let's say the utilities together bought 22000 KWH for that one hour. The amount of money changing hands is quanitity times price, let's say at $30 per KWH. 12 o'clock comes around, and for whatever reason, consumers are just not flipping enough switches and consumption is 20000. Now at the Real Time Market, money changes hands to get enough generators to dial back production, and enough big time consumers to dial theirs up. Some times utilities don't buy 100% of their power on Day Ahead, taking the risk that they can get a decent deal at Real Time for the small amount of top-up they will need. SOmetimes they overbuy because of bad forecasts. That's when negative pricing kicks in. Back to our example: Consumers only need 20000KWH for that hour. So 2000KWH's worth of dials need to turn. The people turning the dials get paid for it, at that negative price. But the amount of money changing hands is small compared to what happend the day before when forecasted power was scheduled. TLDR:This is not a big deal.

heisenbit 9y ago
I'm a bit shocked your first hand explanation was down-voted. Facts should be appreciated even if they do not fit what one would prefer to be the case. Another fact bit: Germany electricity retail prices were forecasted to go up next year. There is a fair amount of subsidizing of the build-out of renewable energy still going on. Also the network is not geared towards the new energy source distribution and requires investments for which consumers are billed in part up-front before seeing the benefits. Another fun fact: The subsidies have angered the liberal party (which has become the bearer holder of liberal markets ideology and is anything but left). To stop the build-out they have started putting up significant building permit regulations in NRW, a state where they have recently risen to power. Explaining how the restrictions on land owners fit with their platform requires a few mental twists.
- ocschwar 9y ago
  I'll admit it was not my best written comment I was rushing to catch a plane. BTW, here's a live picture of the New England power market, both real time and day ahead. Older nuclear plants require a day's notice to change their power output, so day-ahead is the norm, but some markets also arrange purchases n hours ahead where n < 24 as well. https://www.iso-ne.com/isoexpress/web/charts/guest-hub?p_p_id=lmpmapportlet_WAR_isonelmpmapportlet_INSTANCE_6n3S&p_p_lifecycle=0&p_p_state=pop_up&p_p_mode=view&p_p_col_id=column-5&p_p_col_count=3 https://www.iso-ne.com/isoexpress/web/charts/guest-hub?p_p_i...

heisenbit 9y ago

I'm a bit shocked your first hand explanation was down-voted. Facts should be appreciated even if they do not fit what one would prefer to be the case. Another fact bit: Germany electricity retail prices were forecasted to go up next year. There is a fair amount of subsidizing of the build-out of renewable energy still going on. Also the network is not geared towards the new energy source distribution and requires investments for which consumers are billed in part up-front before seeing the benefits. Another fun fact: The subsidies have angered the liberal party (which has become the bearer holder of liberal markets ideology and is anything but left). To stop the build-out they have started putting up significant building permit regulations in NRW, a state where they have recently risen to power. Explaining how the restrictions on land owners fit with their platform requires a few mental twists.

ocschwar 9y ago
I'll admit it was not my best written comment I was rushing to catch a plane. BTW, here's a live picture of the New England power market, both real time and day ahead. Older nuclear plants require a day's notice to change their power output, so day-ahead is the norm, but some markets also arrange purchases n hours ahead where n < 24 as well. https://www.iso-ne.com/isoexpress/web/charts/guest-hub?p_p_id=lmpmapportlet_WAR_isonelmpmapportlet_INSTANCE_6n3S&p_p_lifecycle=0&p_p_state=pop_up&p_p_mode=view&p_p_col_id=column-5&p_p_col_count=3 https://www.iso-ne.com/isoexpress/web/charts/guest-hub?p_p_i...