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> This outcome is in a particularly distorted badly operated market, one where for no very good reasons regulatory power is not being applied . . . You describ

by spodek 8y ago

> This outcome is in a particularly distorted badly operated market, one where for no very good reasons regulatory power is not being applied . . . You described most energy markets on the planet.

boyter 8y ago
It’s particularly bad in Australia and South Australia where this battery is was the worst. Australia despite having abundant reserves of coal, gas and uranium as well as excellent solar and wind locations has some of their most expensive electricity prices in the world.
- deleted 8y ago
  [deleted]
- jazoom 8y ago
  This is true and it blows my mind. It also makes me sad. We have some really smart and educated people in this country. What's the problem here?
  - stephen_g 8y ago
    Mostly the Coalition. Seriously. It’s clear from the AEMO market makeup etc. that almost all the cost increase was attributable to the cost of gas (due to Santos having contracts to export more gas than they had supply for to Japan etc., while the international gas price has fallen. So they are sucking up gas on the domestic market pushing up domestic prices and their liquefication operation is unprofitable anyway). But the Coalition instead chose to use the cost of electricity as a political tool in a bizarre anti-renewables push. Economists have suggested that a large enough gas reservation policy (like WA has) would rectify that. The LNP could legislate it in a few weeks at worst. This would also benefit industrial gas users that have been struggling with big increases. A more minor part (like what this battery is helping to stop) is the privatised generators gaming the market by constraining supply artificially to push up prices at certain high-demand times. Some of this also naturally happens with some of the older coal stations tripping out and falling off for a few hours (I think Liddel is only achieving something like 46% capacity on average or something?).
    - wallace_f 8y ago
      >almost all the cost increase was attributable to the cost of gas Unfortunately natgas prices determines price because it's often the price at the margin. If policy makers care about efficiency, fairness, and reducing pollution, they would better-allow, or outright demand, price signals flow through to the marketplace.
    - roenxi 8y ago
      > Mostly the Coalition. Seriously. Pull the other one, the risk is something like what happened in Germany. The cheap, reliable option in Australia is coal. So an investor has 2 options: 1) Invest in coal. At some point a Labor-Green government gets in and copies the German model - all your capital now makes a loss (ie, the plant you just built). 2) Invest in something else. This isn't as politically risky, but if the government decides that high power prices have to go and pours money into something (eg, new coal plants) then you just got set up as a marginal producer. I mean, I haven't crunched the numbers, but unless wind/solar are legitimately the most cost effective options (which historically they most certainly have not been) then you would have to be a real risk taker to get involved. Blaming that situation on the Coalition is too much; the political risks go way beyond them. The issue is that the Coalition wants cheap, the greens want clean, and Labor isn't committed either way as far as I know. And the regulator is a long way from perfect.
      - plantain 8y ago
        Fortunately, people have crunched the numbers: https://reneweconomy.com.au/plunging-costs-make-solar-wind-and-battery-storage-cheaper-than-coal-83151/ https://reneweconomy.com.au/plunging-costs-make-solar-wind-a... The Coalition doesn't want cheap - they've spun coal so hard it's no longer politically tenable to unspin it.
        aplummer 8y ago
        isn't their only major energy investment a bigger hydro dam?
      - stephen_g 8y ago
- caf 8y ago
  When the resources are internationally tradeable, the size of the local reserves doesn't really matter. The price faced will still be the market price. Generation is far from the only factor in power prices, anyway, and Australia is not nearly so blessed when it comes to the economics of power transmission.
sbov 8y ago
Not to the point where it costs $14,000 per MW. At that pricepoint hiring humans to hand crank generators is not the laughably ridiculous proposition it should be.
- jws 8y ago
  For reference, a megawatt (MW) is 13000 humans cranking generators. You might get by with fewer since the problem being addressed is short bursts of capacity mismatch.
- Retric 8y ago
  A human might average 100W per hour over a workday at say 10$ per hour to keep the numbers clean (1$ = 10Wh). 14,000$ per 1,000,000Wh is 72wh per dollar so far cheaper. Except this is instantaneous power so they would need 1,000,000 people to sit around doing nothing most of the day and then occasionally have have some or all of them work, because again that battery caps at 100MW. Really, people in AU don't pay 14$ per kWh making 14$ per MWh meaningless. They are really paying to keep generating capacity online not for actual power. A backup generator that's never used costs infinite dollars per W, that does not make it useless. PS: Well under 1 million beause people can generate more power in short periods.
  - imron 8y ago
    > to keep the numbers clean With Australia's minimum wage, it's likely to be at least double this.
    - Retric 8y ago
      Fair enough, I was thinking people might average more power and you might use someone outside Australia. On the other hand you need to pay for equipment so ~3W/$ may be more accurate but being generous does not change things much. Anyway ~20$ /h * 24 h a day * 1 million people / -123 MW (Tesla capacity) = ~3,900,000 $ / MWh which is closer than I thought it would be.
  - Jedd 8y ago

by spodek 8y ago

> This outcome is in a particularly distorted badly operated market, one where for no very good reasons regulatory power is not being applied . . . You described most energy markets on the planet.

boyter 8y ago

It’s particularly bad in Australia and South Australia where this battery is was the worst. Australia despite having abundant reserves of coal, gas and uranium as well as excellent solar and wind locations has some of their most expensive electricity prices in the world.

deleted 8y ago
[deleted]
jazoom 8y ago
This is true and it blows my mind. It also makes me sad. We have some really smart and educated people in this country. What's the problem here?
- stephen_g 8y ago
  Mostly the Coalition. Seriously. It’s clear from the AEMO market makeup etc. that almost all the cost increase was attributable to the cost of gas (due to Santos having contracts to export more gas than they had supply for to Japan etc., while the international gas price has fallen. So they are sucking up gas on the domestic market pushing up domestic prices and their liquefication operation is unprofitable anyway). But the Coalition instead chose to use the cost of electricity as a political tool in a bizarre anti-renewables push. Economists have suggested that a large enough gas reservation policy (like WA has) would rectify that. The LNP could legislate it in a few weeks at worst. This would also benefit industrial gas users that have been struggling with big increases. A more minor part (like what this battery is helping to stop) is the privatised generators gaming the market by constraining supply artificially to push up prices at certain high-demand times. Some of this also naturally happens with some of the older coal stations tripping out and falling off for a few hours (I think Liddel is only achieving something like 46% capacity on average or something?).
  - wallace_f 8y ago
    >almost all the cost increase was attributable to the cost of gas Unfortunately natgas prices determines price because it's often the price at the margin. If policy makers care about efficiency, fairness, and reducing pollution, they would better-allow, or outright demand, price signals flow through to the marketplace.
  - roenxi 8y ago
    > Mostly the Coalition. Seriously. Pull the other one, the risk is something like what happened in Germany. The cheap, reliable option in Australia is coal. So an investor has 2 options: 1) Invest in coal. At some point a Labor-Green government gets in and copies the German model - all your capital now makes a loss (ie, the plant you just built). 2) Invest in something else. This isn't as politically risky, but if the government decides that high power prices have to go and pours money into something (eg, new coal plants) then you just got set up as a marginal producer. I mean, I haven't crunched the numbers, but unless wind/solar are legitimately the most cost effective options (which historically they most certainly have not been) then you would have to be a real risk taker to get involved. Blaming that situation on the Coalition is too much; the political risks go way beyond them. The issue is that the Coalition wants cheap, the greens want clean, and Labor isn't committed either way as far as I know. And the regulator is a long way from perfect.
    - plantain 8y ago
      Fortunately, people have crunched the numbers: https://reneweconomy.com.au/plunging-costs-make-solar-wind-and-battery-storage-cheaper-than-coal-83151/ https://reneweconomy.com.au/plunging-costs-make-solar-wind-a... The Coalition doesn't want cheap - they've spun coal so hard it's no longer politically tenable to unspin it.
      - aplummer 8y ago
        isn't their only major energy investment a bigger hydro dam?
    - stephen_g 8y ago
caf 8y ago
When the resources are internationally tradeable, the size of the local reserves doesn't really matter. The price faced will still be the market price. Generation is far from the only factor in power prices, anyway, and Australia is not nearly so blessed when it comes to the economics of power transmission.

sbov 8y ago

Not to the point where it costs $14,000 per MW. At that pricepoint hiring humans to hand crank generators is not the laughably ridiculous proposition it should be.

jws 8y ago
For reference, a megawatt (MW) is 13000 humans cranking generators. You might get by with fewer since the problem being addressed is short bursts of capacity mismatch.
Retric 8y ago
A human might average 100W per hour over a workday at say 10$ per hour to keep the numbers clean (1$ = 10Wh). 14,000$ per 1,000,000Wh is 72wh per dollar so far cheaper. Except this is instantaneous power so they would need 1,000,000 people to sit around doing nothing most of the day and then occasionally have have some or all of them work, because again that battery caps at 100MW. Really, people in AU don't pay 14$ per kWh making 14$ per MWh meaningless. They are really paying to keep generating capacity online not for actual power. A backup generator that's never used costs infinite dollars per W, that does not make it useless. PS: Well under 1 million beause people can generate more power in short periods.
- imron 8y ago
  > to keep the numbers clean With Australia's minimum wage, it's likely to be at least double this.
  - Retric 8y ago
    Fair enough, I was thinking people might average more power and you might use someone outside Australia. On the other hand you need to pay for equipment so ~3W/$ may be more accurate but being generous does not change things much. Anyway ~20$ /h * 24 h a day * 1 million people / -123 MW (Tesla capacity) = ~3,900,000 $ / MWh which is closer than I thought it would be.
- Jedd 8y ago