3 ms·

Does this include wear and tear and replacement costs on the battery storage cells?

diafygi 9y ago
Yes. These bids are usually for a "power purchase agreement", which is a bid to deliver X amount of power over some period of time. All of the maintenance, fuel, wear/replacement costs are included with the bid since it's just a raw end power delivery contract. The interesting thing that's new about this is that these bids are for "dispatchable" renewables. Up until this point, most renewables were not dispatchable since they didn't have cost competitive storage. This means that renewables now can bid for much higher levels of grid penetration in capacity markets.
- wlesieutre 9y ago
  Note that coal is also not a dispatchable power source. Mostly they're base load plants [1], best case they're load following power plants [2]. No way for them to respond quickly to demand changes like natural gas, hydroelectric, or batteries can. [1] https://en.wikipedia.org/wiki/Base_load https://en.wikipedia.org/wiki/Base_load [2] https://en.wikipedia.org/wiki/Load_following_power_plant#Coal_based_power_plants https://en.wikipedia.org/wiki/Load_following_power_plant#Coa...
  - wlesieutre 9y ago
    One last reference, these are in contrast to peaker power plants [3] which can quickly start up and shut down as needed to cover high demand periods. Gas, hydro, and grid tied batteries fit into this category. At least in the US, the grid runs as a market where as demand rises, plants bid their price to meet the demand. The energy price that they charge for these peaks is substantially higher than the base load price because you have to build enough power plants to meet the highest demand (else you get brownouts) and the peaker plants are only going to run for a small fraction of the time. The price they charge for that small time still has to cover all of the infrastructure cost. Since the peak energy price is so high, that makes a good opportunity for batteries to jump in. Tesla's recent Australian battery project is a great showcase of that. [3] https://en.wikipedia.org/wiki/Peaking_power_plant https://en.wikipedia.org/wiki/Peaking_power_plant

Yes. These bids are usually for a "power purchase agreement", which is a bid to deliver X amount of power over some period of time. All of the maintenance, fuel, wear/replacement costs are included with the bid since it's just a raw end power delivery contract. The interesting thing that's new about this is that these bids are for "dispatchable" renewables. Up until this point, most renewables were not dispatchable since they didn't have cost competitive storage. This means that renewables now can bid for much higher levels of grid penetration in capacity markets.

wlesieutre 9y ago
Note that coal is also not a dispatchable power source. Mostly they're base load plants [1], best case they're load following power plants [2]. No way for them to respond quickly to demand changes like natural gas, hydroelectric, or batteries can. [1] https://en.wikipedia.org/wiki/Base_load https://en.wikipedia.org/wiki/Base_load [2] https://en.wikipedia.org/wiki/Load_following_power_plant#Coal_based_power_plants https://en.wikipedia.org/wiki/Load_following_power_plant#Coa...
- wlesieutre 9y ago
  One last reference, these are in contrast to peaker power plants [3] which can quickly start up and shut down as needed to cover high demand periods. Gas, hydro, and grid tied batteries fit into this category. At least in the US, the grid runs as a market where as demand rises, plants bid their price to meet the demand. The energy price that they charge for these peaks is substantially higher than the base load price because you have to build enough power plants to meet the highest demand (else you get brownouts) and the peaker plants are only going to run for a small fraction of the time. The price they charge for that small time still has to cover all of the infrastructure cost. Since the peak energy price is so high, that makes a good opportunity for batteries to jump in. Tesla's recent Australian battery project is a great showcase of that. [3] https://en.wikipedia.org/wiki/Peaking_power_plant https://en.wikipedia.org/wiki/Peaking_power_plant