23 ms·

Power Worth Less Than Zero Spreads as Green Energy Floods the Grid

537 points by bumholio 8y ago

ars 8y ago
Last time there were "weird" issues with power someone was gaming the system: Enron. Something about this article just seems off to me, something isn't right from a technology point of view, and I suspect someone is manipulating things. (No, I do not have evidence. Just a feeling like this isn't such a hard problem to solve technically.)
- wyattpeak 8y ago
  What problem are you talking about? I'm not getting any problem from the article at all, except the structural (and well-known) problem of a lot of our power infrastructure being designed for more predictable output patterns than we have today. It's fairly typical 'state of the industry' coverage, with no real surprises.
- nachexnachex 8y ago
  > Enron "Quien se quemó con leche, ve una vaca y llora." It can seem weird to have an excess of power availability, but it's a consequence of electric power not being easily stored -- electricity is just a good energy _transmission_ system. While using electrostatics (batteries) is possible for storing very small amonts of energy, when you think at a state or country scale, it's just too much to store. This means excess energy must be either immediately consumed, or transformed in order to store it. The most common storage system would be gravity -- build a pump right besides your dam, and pump water upstream so you can use it later when power is not readily available. There are already some reservoirs using this -- at least one in Wales and I've recently read they'd like to build one in Hoover Dam. It's not simple though, because usually water is left to fall yet another bit right after the dam, so a second reservoir right below the dam would be needed. So, what does a negative price mean. As the article puts it, its a signal from the grid that it has no use for your energy, _right now_, as there's an excess of generation. But if untapped, wind and solar will be just lost, so why not offer it to the users. As renewables continue to grow, probably more storages will get built that can buy that excess and this anomaly will cease.
  - majewsky 8y ago
    To save you the Google tour: > Quien se quemó con leche, ve una vaca y llora. This appears to be a saying that corresponds to the English saying "A burnt child dreads the fire."
    - JetSpiegel 8y ago
      But the literal translation is "That who has been burn with milk, watches a cow and cries". Much funnier
- pandasun 8y ago
  I suspect the same thing. There's NEVER anything in this industry that is a coincidence. You might not get a lot of people agreeing with you right now, but just wait a few months and your comment will be spot on.
- bsmith 8y ago
  Yes, someone (thing?) is gaming the system: cheaper renewable energy generation assets, and thus, weather (which is inherently unpredictable). When the sun is shining and wind is gusting isn't always at highest demand, which depresses rates during these totally unanticipated spikes in supply. Unless someone is playing God with the weather, I don't think there's a finger to point here.
aphextron 8y ago
Can someone please explain then why we are paying the highest prices in the continental US for retail electricity, at $0.28/kWh, in a state with the highest percentage of renewables in the country?
- harryh 8y ago
  Supply might be high, but demand exceeds it.
- sxates 8y ago
  Has a power company ever voluntarily lowered rates?
  - gameswithgo 8y ago
    yes
- mikestew 8y ago
  Can someone please explain then why we are paying the highest prices in the continental US Not until you tell us where you live, because I'm not going to backtrack by looking up which state has $0.28/kWh electricity. Though without that knowledge, I'm going to guess something something supply and demand.
  - dev_dull 8y ago
    Without a doubt California w/ PG&E.
- Latteland 8y ago
  you left out your state :-) I thought washington state was the state with most renewables. I pay about 12c per kwh.
  - milcron 8y ago
    That's mostly due to the hydroelectric dams, though. Negative prices come from too much solar power in the middle of the day.
deweller 8y ago
Surely Bitcoin miners will snatch up these opportunities soon. Cheap electricity can be translated into money if you have the mining equipment.
- rb808 8y ago
  Agreed but its a weird transaction system that works better on windy days. :)
  - epx 8y ago
    I just saw myself licking the thumb, putting the arm out of the window, waiting a bit and thinking "ok the thumb got chilled enough so it is great time to pay that bill".
  - sriram_sun 8y ago
    Interesting point! It seems to me that the economy regularly takes a beating on extreme weather days. However, these things are factored in. For e.g. whenever there is a cyclone brewing near the Louisiana coast, gas prices go up. If there is a blizzard, people stay home. Then there are forest fires - these might cause property destruction and have a long term health impact - directly and indirectly affecting the economy. Although the exact timing of these events are not predictable, a huge part of our economy - the insurance industry tries to factor extreme weather into account. Similarly, mining during windy days should even out, given enough players are invested.
- Geee 8y ago
  Not really. Mining has high capital costs which can't be covered if the energy source isn't reliable. Mines need to run 24/7 to be profitable.
  - bufferoverflow 8y ago
    Well, with free/negative electricity you can mine cryptocurrencies with outdated gear, no need to invest into the latest ASICs. It's free money, just not much of it.
maerF0x0 8y ago
> It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity. Good. That's a well functioning market economy. Those who make poor investment choices need to feel the sting of losses else the market fails to work correctly.
- perl4ever 8y ago
  I think that negative prices are prima facie evidence of a market economy not functioning "well". Negative prices seem to me to be to be equivalent to fines for doing things that aren't socially useful. If they proliferate, that's a suggestion something is out of whack.
  - bjoernw 8y ago
    Only if they stay negative
    - perl4ever 8y ago
      That's reasonable. The headline says it's spreading though.
      - xigma 8y ago
        It's spreading because the market is oversatured with renewables because of government subsidies. A sound investor would stop (or go bankrupt) when the negatives outweigh the positives.
        perl4ever 8y ago
        Subsidies seem to be on the decline. In fact, I was just reading that due to the Chinese government cutting back, people are predicting PV prices will plummet in the next year.
      - Dylan16807 8y ago
        In this case "spreading" means "happening more often". And you could have a stable rational market where power prices go negative for an hour every day.
stcredzero 8y ago
If the general pattern holds of the electrical power market being like the natural gas market, just at much shorter time scales, then does this mean that we are going to see an increase in electrical power storage in the next few years? Companies have been making money by offering storage and pooling services in energy for quite awhile. It's just that storage has been more difficult from an economic and technical sense with electricity than with, say, natural gas.
- EvilEndures 8y ago
  Probably that and "quick start" powerplants already serving this function in the UK. https://www.ft.com/content/ba6bd46a-1d75-11e8-956a-43db76e69936 https://www.ft.com/content/ba6bd46a-1d75-11e8-956a-43db76e69... > The episode showed how small, flexible power plants are now bridging the supply gaps, especially at a local level, between intermittent renewables and Britain’s fleet of large, but slow-to-fire-up, gas and coal plants.
  - stcredzero 8y ago
    Probably that and "quick start" powerplants already serving this function in the UK. Right. Quick start plants basically convert "stored" energy in the form of natural gas into electrical energy on the grid. The natural gas supply has a chemistry/physics advantage in terms of storage efficiency. (As well as industrial infrastructure already built up.) This would allow us to calculate a target number for the storage cost of batteries which could compete. We can then apply industry trends to see which battery chemistry or power storage technology might become competitive, and when it is likely to achieve that.
dev_dull 8y ago
The logical next step is devices (storage) which can arbitrage these prices and make a profit. Capitalism is a wonderful thing, especially when it’s helping make green energy more efficient.
- Firerouge 8y ago
  A power wall that's paid to be charged during peak generation, and gets paid again to discharge during peak consumption would be pretty fantastic.
  - logfromblammo 8y ago
    Why would a power utility allow customers to perform time-of-day arbitrage when they could do that themselves without upgrading all the meters?
    - dev_dull 8y ago
      Lid shifting. PGE actually pays a subsidy for you to do it via a battery.
rwcarlsen 8y ago
Negative energy prices have been a not uncommon occurrence in various places in the US and EU for a while. They are not necessarily a good thing. They occur due to a combination of how generating sources are managed/dispatched [1] and because of policies that make it possible for (some) generating facilities to still make a profit while bidding to provide electricity at a negative cost (literally paying the recipient to take the electricity). This is not necessarily a good thing and can actually lead to increased carbon footprints of our energy generation mix along with other not necessarily good outcomes [2]. [1] https://www.eia.gov/todayinenergy/detail.php?id=7590 https://www.eia.gov/todayinenergy/detail.php?id=7590 [2] https://ieeexplore.ieee.org/document/6917222/ https://ieeexplore.ieee.org/document/6917222/
- talltimtom 8y ago
  > They are not necessarily a good thing Indeed. I would even go as far as to say they are never a good thing. They indicate that the plants are having to spend money to keep things running, and that extra cost is carried over to the very same consumers who for short periods get “free” power or get paid to absorb the load. And since the scenario of having negative prices is far from efficient the total cost is still positive. So unless you have a very unusual completely selective powerusage you end up paying more net than if the prices had remained positive but slightly lower throughout.
DoctorOetker 8y ago
I don't truly understand this "problem". I understand storing the energy in batteries is currently very expensive economically and materially. However I believe there are plenty of "goods" (irrespective of if they are bulk materials, or partially processed products) which have a high processing energy per volume ratio (this does not need to be recoverable stored energy). Allow me to give an example: currently we have a drought in Belgium (or at least Flanders). We are not landlocked, there is plenty of water in the sea. Desalination is energy intensive. Instead of only looking at energy storage, why can't we increase the processing capacity (more desalination sites capable of working in parallel), and desalinate say sea water during the energy flood? I don't expect this to be an ideal real world example, only a pattern for identifying such examples: any product (could be composite parts, or bulk material) which is relatively compact and has some high energy per product volume processinng step. Just do the process (desalination, welding some part to another part...) when the sun shines, and store them for later. Products with very high step energy density are good candidates for storing, and could help flatten daily variations, and perhaps even seasonal variations! Now some companies would prefer avoiding risk if they don't have guaranteed orders far enough into the future, then perhaps there should be a market for insurance or loans, so that the company is encouraged to take the risk, instead of wasting the cheap energy...
- verisimilitude 8y ago
  I believe aluminum is nicknamed "solid electricity" due to the ore purification process or somesuch; which dovetails well with the strategy you outline here!
  - bluGill 8y ago
    Unfortunately it doesn't. Aluminum needs a lot of electricity, but it needs to be consistent for several hours. It takes a lot of energy true, but the furnaces need to be at operating temperature. You can't just turn them on and off, there are startup and cool down times that need to be accounted for.
    - docker_up 8y ago
petermcneeley 8y ago
Can someone with a microecon background explain how this is possible? (My guess is that consumption is somehow completely independent of unit price and that its also inelastic?)
- MrRadar 8y ago
  The key thing to understand is that the electricity market is unusual in that electricity can't be easily "stockpiled" the same way most commodities can be. This means it needs to be produced at almost the same rate it's consumed. Some types of generators have long ramp-up/ramp-down times so it can actually be cheaper to keep them running and pay someone to consume the excess power they're producing compared to how much it would cost to stop them when the energy they're producing is no longer needed and then start back up again when it is. Additionally, some other types of generators (wind and solar) receive tax credits for every kWh they produce so even if you lose money selling the energy you can come out ahead when factoring in the tax credit.
  - jabl 8y ago
    Also some producers in some markets receive subsidies in the form of feed in tariffs (fit). With FIT and near zero marginal costs (e.g. wind or solar) you can bid a negative price and still make a profit.
- cbdumas 8y ago
  No microecon background but I worked in an energy adjacent field for a while. One of the big issues here is that there is a huge price/cost mismatch. Consumers are billed a flat price at all times of the day and year (mostly), but the cost of producing 1 kWh of energy varies enormously throughout the day. This dynamic has always been true to some extent, but a huge increase in distributed solar generation has exacerbated this problem considerably in some places. In most (all?) cases utilities cannot actually set their own price structures without sign off from regulators, so the onus is essentially entirely on utilities themselves to level out their costs (with storage or more flexible generation).
- iaw 8y ago
ethagknight 8y ago
Bring on the compressed air economy! http://www.lowtechmagazine.com/2018/05/history-and-future-of-the-compressed-air-economy.html http://www.lowtechmagazine.com/2018/05/history-and-future-of...
- mpax 8y ago
  “You only sell hot air?” “Yes, I’m full of it! And quite dense!”
brendog 8y ago
the key to solving this problem is a communications link between the supply side and the demand side. It's crazy that there's a complete disconnect between something that consumes power (that in many cases could delay it's consumption until a time when there was excess capacity, or at least make a more informed decision) and the supply side. I started episensor in Ireland and we've been working on this problem for many years.
- sounds 8y ago
  To add to that, this recent article on HN [1] goes into a lot of great detail on how the economics of a home solar installation are part of the problem. Basically, if there were an incentive for residential solar installations to include a little bit of storage capacity, it would be a net win for the entire economy. [1] https://syonyk.blogspot.com/2018/05/why-typical-home-solar-setup-does-not-work-off-grid.html https://syonyk.blogspot.com/2018/05/why-typical-home-solar-s...
- pbhjpbhj 8y ago
  It's pretty crazy that 30 years ago in UK Economy7 [7 hours lower rate electric at night] was a big thing, you got cheaper electric at night and had a special meter to accommodate the billing needs. But I can't get that now despite being offered a device that will give instantaneous cost readings.
CapitalistCartr 8y ago
I wonder if there's a way to remove CO2 from the air with surplus electricity without a half-billion dollar plant. That would be a win for everyone. It operates when the wholesale price of electicity drops below its threshold, perhaps only 4-6 hours per day, so would have to be a pretty cheap fixed cost.
- tantalor 8y ago
  Yes its called a grow light they cost about $7 at home depot. It doesn't matter what you grow; weeds will work.
  - logfromblammo 8y ago
    A bioreactor full of algae is a bit more efficient. You can even pump CO2 exhaust from your power plant directly into it. Then you can sell the glop.
    - tantalor 8y ago
      Now that's soylent.
  - Dylan16807 8y ago
    How much of the carbon in those weeds will stay out of the atmosphere?
- ridewinter 8y ago
  This seems like a brilliant idea. Anyone know how it could be done?
  - deleted 8y ago
    [deleted]
mabbo 8y ago
Sounds like a great time to be building Tesla-style battery stations. Get paid to take in energy when it's flooded, get paid to output energy when it's not flooded.
- bluGill 8y ago
  Sounds like it, but as always the devil is in the details...
- brandmeyer 8y ago
  When residential and small commercial customers can participate in the spot markets, this will happen.
ZeroGravitas 8y ago
Price signals that go negative seem to really freak people out, but the real transition point is when the price dips below the marginal cost. If you're burning 1 dollar of fuel to generate one dollar worth of electricity then anything less is a signal to switch off. If your boiler has physical reasons for not turning off and on sharply then you can find yourself eating a loss in the short term to make money on average even with positive prices. Which puts a monetary price on flexibility or integrated storage.
- philipkglass 8y ago
  Agreed. The only nationwide incentive that drives negative prices in the US is the wind Production Tax Credit. It's paid per MWh generated, regardless of market price at the time. The solar Investment Tax Credit incentivizes construction, not generation, so there's no incentive for selling solar MWh at negative prices -- though they can go arbitrarily close to zero. If the wind PTC were to be renewed in the future, it could be structured so as to avoid negative-pricing incentives. Instead of $N dollars per megawatt hour, it could be something more like "up to $N dollars per megawatt hour, where $N <= the current average price paid to all generators." At a cap of $23 and current market price of $10, the wind generator would get $10 of tax credit per MWh. At a current market price of $35 the wind generator would get the full $23. State and local incentives would also need similar conditionals to eliminate all negative pricing incentives. IMO a change like this would take a lot of wind out of the sails of fossil generators decrying "irrational and unfair" renewable tax credits. But it would not actually solve the overarching problem of unprofitability. The things mostly killing profitability for threatened fossil plants are lower price spikes and lower median prices. Ensuring slightly-above-zero prices instead of negative prices won't save them.
- caf 8y ago
  There is another transition point at zero price, though - that's where it starts to make sense to vent the steam to the atmosphere instead of running it through the turbine.
  - TheCoelacanth 8y ago
    Is there zero cost involved in safely venting the steam? I wouldn't think so. It's probably not a very high cost, but I can't imagine it's actually zero.
true_tuna 8y ago
Here’s a crazy idea. Batteries? https://cleantechnica.com/2018/08/06/analysis-reveals-that-worlds-largest-battery-saves-south-australia-8-9-million-in-6-months/ https://cleantechnica.com/2018/08/06/analysis-reveals-that-w...
- mattmanser 8y ago
  They can't magically make national grid grade batteries overnight. So, yes, at the moment it's a crazy idea. The whole point of the trials in Australia and places is to get it to work at the scale needed. You can't just plug in 1,000,000 rechargeable batteries and hope it works.
  - jldugger 8y ago
    You'd probably be better off with water pumps to put water back behind a hydro dam. If you assume the presence of hydro, it's a pretty cheap battery to lift water back up.
witchcrathack 8y ago
contact WESTERNHACK78 @ GMAIL .COM for all your hacking job
OliverJones 8y ago
Interesting that the utilities with fixed sunk costs are feeling a pinch from renewables. I suppose some of them will take the bailout path (companies keep profits, taxpayers or ratepayers shoulder losses). Traditional utility economics guarantees a return on capital, and imposes ratesetting in return for geographic monopolies. The real story here is the upending of that model as carbon-based fuel loses its deathgrip over the grid. A consequence of this is less economy-of-scale advantage for vast generation plants. Small distributed generation is more attractive than it was a generation ago. But every market has its quirks. The Texas grid system doesn't have any way to export power to other markets. And West Texas is a windy place. So they find themselves with excess capacity sometimes. I wonder if any grid operators will respond to these price signals by developing smart grids: by realizing that their future lies in offering both electricity and good information about that electricity. Then they can send signals to local time-shiftable equipment (for example car charging, water heating, power storage, desalinization, even blockchain mining). In Norway the grid operators deliver near-real-time supply signals to customers using the same sort of radio signals that tell people the song that's playing on the radio station. Sure, the US is bigger. But if the don't try to do this, they'll never figure out how to do it. One negative consequence of this pinch: as it spreads the net metering deal that current solar-cell households enjoy will fade away.
maherbeg 8y ago
Power companies should really be petitioning the federal government to continue EV subsidies and help market them to create more demand. Generally this seems like a temporary phenomenon until EVs start to come online in en masse.
lucidguppy 8y ago
Champagne problems...
- quickthrower2 8y ago
  Well champagne has plenty of CO2, too.
  - usmeteora 8y ago
    this is what masogyny looks like.
- usmeteora 8y ago
  I actually don't drink, but when I used too, I preferred Syrah, or whiskey. I understand time domain based analysis is difficult for computer scientists to understand, and most people don't understand the ACOPF. You can go read more about how all of this works, but I understand it's actual work, and the topic is complex enough to span beyond stereotypical litmus test viewpoints on both convservative and liberal sides, which makes people immediately shut down. That's the best way for media to control people, is to polarize them so they are mentally too close minded to even explore the possibility that anyone in the field of "clean energy" might be engaged in corruption. (oh no! I thought only people who sell oil do that!). Exposing pricing incentives to clean energy could encourage more generators to increase performance and reliability. Right now, they throw away roughly 70% of the energy and easily 30% of it could be saved and put into the grid and supplied to people if they had any reward/loss mechanism other than receiving flat government subsidies for simply existing. To believe that clean energy doesn't need a proper incentive system like everything else is fine. Europe does this well, but then the discussion should center around whether real time energy pricing markets should exist at all. To me, it's debatable. I think the fundamentals are sound, but it's too complicated of a system for the average person to understand, so politics rules the compass for how much corruption is at play. That's never a good thing. We would probably be better off operating like how Germany operates. Still, wind turbines and solar panels could do better on their energy efficiency... Acting like clean energy generators should get a free pass, free funding and never be reviewed on performance or reliability metrics or incentivised to perform better is like saying "my child is a genius. He's two years old, but he deserves to be at Harvard. He doesn't need to do homework, or work at anything in his life/ He's my son, hes entitled to all the success in the world because he has "potential" and is objectively more gifted than the other competitors". no, you need to work at things, and get better. Solar panels and wind turbines need to get alot better. They have gaping holes in their performance metrics, all which can be fixed if they could profit from getting better. I challenge you to a test that requires holding more than one thought in your head for 5 minutes. Go find one clean energy company in the U.S. producing solar or wind. The actual company who funds it, and follow the subsidy money. Where does it go? Does it go to power your home? Go find out, tell me where it goes....
komali2 8y ago
>It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity. The "solution" to this "problem" is, rather than investing in a green production method, to desperately cling to existing investments by sending lobbyists to the government to convince them that Clean Coal is the future. I love the line at the end of "The Big Short," I can't remember it verbatim but it was something along the lines of how "once again, like we've always done, we're going to seek out the short term gains and cripple long term ones, for no good reason."
- downandout 8y ago
  I know you’re being facetious, but it seems to me that the actual solution for these companies’ financial woes would be to simply charge more for energy from their traditional plants when there is demand for it, just as suppliers of any other commodity do. If there are regulations in individual jurisdictions preventing them from doing this, those regulations should be relaxed. The reality is that we are still dependent on traditional energy sources sometimes. Therefore, these plants and the companies that own them have to be able to charge enough stay in business until we don’t need them anymore.
WalterBright 8y ago
I'll suggest again that the solution to this is to charge variable prices to the consumer based on the supply. For example, I pay exactly the same rate, 24/7. Of course this will result in a mismatch of supply and demand. A lot of electricity demand can be shifted to when the supply is cheapest. When the supply varies wildly, like solar and wind do, there's a giant impedance mismatch when demand is charged a fixed price.
- psergeant 8y ago
  But also: consumers with Powerwalls and other home storage options.
  - WalterBright 8y ago
    Heck, you could even go to town running an icemaker at noon when power is cheap, and set out trays of ice in the evening with a fan blowing over it. That can even be turned into an appliance that would be an accessory to your HVAC system.
    - WalterBright 8y ago
      During the winter, one can electrically heat concrete blocks during the day, they release their heat at night. (A concrete block makes for a pretty cheap "battery" !! )
      - hoschicz 8y ago
        Why heat concrete blocks? Doesn't water have a higher thermal capacity?
        kilotaras 8y ago
        Depends on the actual concrete. It will have lower thermal capacity per weight, but that may be offset with higher density. (The most common concrete would be worse than water with capacity being 1.3 (vs 4.2 in water) and density of 2400 kg/m3).
notatoad 8y ago
This seems like an opportunity for all that currently-useless "smart home" tech that companies are so eager to sell. I don't need smartphone notifications from my internet connected washing machine to tell me when the laundry is done, because i know when i started it. But if i could load the washing machine and tell it to switch on when the cost of electricity dropped below a certain threshold, and it would actually save me money, then suddenly the smart home would actually be providing some value. unfortunately, as far as i know not only is there no consumer tech that does this, but energy companies don't make real-time pricing available to all but the largest consumers.
- caf 8y ago
  At least for the specific case of washing you can get most of the benefit by moving to a time-of-use tariff and scheduling the washing machine to run during the off peak time. (Washing machines do seem to use a surprisingly large amount of energy, particularly the ones that heat the water internally).
  - carlmr 8y ago
    With a quick search I can't find any energy company in my area offering time-of-use tariffs. I remember in the 90s it used to be standard to have a cheaper night tariff. But there's nothing that actually does impedance matching through financial incentives. By the second spot rates might be slightly too volatile for the average consumer to use, but what you could have is smart pricing mechanisms where you can e.g. lock in a rate for the next 1 or 2h and then your washing machine waits for the expected best rate in the day and with maybe a timeout when it starts anyway (if you need it). That way you could usually get good rates when you start your washing machine in the morning and it waits a few hours, depending on price history. This is just a case of simple enough statistics that they can be calculated on the smalles microcontrollers available. Those are already in most home appliances. If you now add Wifi capabilities (which also a lot of home appliances have), you could get the communication done. For any smart appliance the marginal cost to implement this is zero. The investment cost is only the software. You'd still need a company offering this.
torpfactory 8y ago
Negative energy prices are one of the signals which might drive the devlopment of grid scale storage. Very obvious arbitrage potential here. The fact that utilities themselves are complaining about this instead of investing in storage is a little dismaying.
- deleted 8y ago
  [deleted]
m1n1 8y ago
So store the excess with a gravity train and sell it back later. https://www.aresnorthamerica.com/ https://www.aresnorthamerica.com/
usmeteora 8y ago
Hi. I'm an Electrical Power Engineer and I analyzed electrical power energy pricing for three years after working a startup designing renewable stations. I worked at the NYISO, which runs all the real time energy pricing markets on a realtime power market separate from the public stock market. The issue is this. NYISO, MISO, ERCOT, CAISO run real time energy markets throughout the U.S. The idea is energy demand is met with energy supply obtained at the LBMP (locational based marginal price) from energy bid into the markets by energy suppliers who can meet demand in that area (transmission line losses are 10%) so there is an advantage to local/decentralized energy as the markets price congestion on these transmission lines. Transmission lines are expensive (consider buying up all those little protesting family farms lawsuits buying individual land) and will melt or if run beyond 90% of their capacity which could leave an area stranded and blacked out by cascading over voltage conditions and blacking out the entire power grid. So the tldr is energy can only move so far before it becomes uneconomic and needs to be synced with another power bus. Now, you have politicians throwing free money in subsidies, grants or 20yr loans to Venture capital funds who contract renewable energy farms like wind for example. They get paid subsidies for the power they produce. That sounds reasonable, but this is where it becomes unreasonable. Power is realtime and needs to respond to demand usage. The other important thing to note is even if we did vote for high taxes in the u.s. to fund clean energy, clean energy is massively inefficient right now, and this doesn't provide an economic incentive to innovate in the industry. Quite the opposite. It makes the people raking up this free money hapoy sitting on their behinds, which brings me to my previous point, The VCs get paid to produce power but not when it's needed. They could store this in a battery somewhere, but it turns out hurricane Sandy flooded a $50million battery that was supposed to back up all of long island. Ironic. Most investors tweaked out after this, and anyways, why would venture capitalists spend their free money on actually investing in making the technology better by buying batteries to save power being produced when it's not needed (a windy night on a mtn vs 4pm the next day when everyone is using power) when they are getting paid either way? The money that isn't lining their pockets is subsidizing their cost of production bids into thr market. So wind plants in NY always bid in at $0 and they get the bid to produce Everytime. Since every five minutes economic dispatch (Google "acopf ferc") creates a price signal based on demand needed and this can actually drive the price negative. The decision making tree here is based on a mixed integer programming algorithm for which the implementation is close sourced by an algorithm contracting company, which I personally think is an egregious injustice to stakeholders but that's just me. Sounds great, how does it get worse? Well, because not in my backyard policy, all of these wind plants are in upstate NY, so they have to waste and dissipate 10% of the power on the way down to NYC clogging the transmission lines, if they happen to be running when it's needed. For the few companies truly interested in putting batteries on their plants, the NYISO, CAISO and ERCOT are decades behind implementing the legal economic markets for these generators to engage in to set up batteries at different entry points on the power grid than where they are supplying it. Germany runs on 50% solar and does well, which clearly shows this is not a technical background but a legal, political and organizational one. However, the economic efficiency is not entirely revealed t us. Do you think the u.s. would vote for 50% taxes like they have in Germany? Hope that helps and feel free reach out if you have any more questions.
whitej125 8y ago
Any good book recommendations that could shed light on the mechanics/economics/incentives of the power industry and how it came to be?
- computerphage 8y ago
  The Grid. I heard about it two years ago and recommend it often. https://www.gatesnotes.com/Books/The-Grid https://www.gatesnotes.com/Books/The-Grid https://www.gatesnotes.com/About-Bill-Gates/Best-Books-2016 https://www.gatesnotes.com/About-Bill-Gates/Best-Books-2016
  - whitej125 8y ago
    Awesome, thanks!
deleted 8y ago
[deleted]
alexeckermann 8y ago
Some insight into the change year-on-year to the South Australian negative pricing; the change may be due to more active management by AEMO (Australian Energy Market Operator). Wind is now mostly curtailed at ~1.2GW and a minimum quantity of synchronised gas generators operating. This was in response to a system security scare in 2016 where the entire state experienced a 'Black System' event where we lost all power -- lights out in the entire state. That was caused by a storm taking out some primary transmission lines on top of a less-than-ideal market generation mix causing a chain of events but it put focus and revealed the bigger security issue everyone ignored -- higher risk figures were reported but nobody cared until it was a problem. Whilst we have enough wind and solar to take the state to 100% renewable (at times) it is not secure enough to provide industrial contracts or services like FCAS (Frequency Control Ancillary Service). With dwindling industrial contracts for energy providers the generation market has gotten smaller, primarily supplying domestic load/customers. That on top of a privatised market lacking responsibility for planning ahead has left the local market in a flux. The spot market has become so unreliable that some businesses have opted for their own on-site diesel generation. One may assume that this would mean our power prices are pretty low. But that isn't the case. It has been said we have some of the highest electricity prices in the world. In context, this has been because of waining industrial load contracts and profit focussed privatised generators. We just also happen to have a high-wind generator mix. So whilst living in a state with a high % of renewables is great, the lack of planning in a privatised market has left everything a bit messed up. Businesses looking outside the highly variable spot market into the hands of fossil fuel generators, domestic customers paying some of the highest power prices in the world, and nobody is really responsible/accountable for keeping the lights on.
exabrial 8y ago
I'm not anti-gteen, but it's not worth "less than zero", it's the people's money being given away. This isn't a so much as a huge success as it is a legislative oversight. :/
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bit_logic 8y ago
A carbon tax combined with excess green energy could cause some unexpected results. Currently, most assume that EV cars are the future. However, there are companies working on processes that can convert CO2 from the air + energy + water into synthetic fuel. There are already working examples of this such as the Canadian company Carbon Engineering. If the energy is green (such as excess solar/wind) this fuel would be basically carbon neutral and exempt from any carbon tax. The process would be economically viable because the carbon tax would raise the price of oil from traditional fossil sources. But the increased price of oil would make a carbon neutral synthetic process like this viable at the same time. If this happens, the EV car becomes much less competitive. From a pure efficiency view, EV is still much more efficient. But there is a lot of existing infrastructure supporting carbon fuel and billions of cars. This synthetic fuel would immediately fit into that. If there's a heavy carbon tax, can EV complete successfully against a carbon neutral synthetic fuel?
- adrianN 8y ago
  Yes they can because they don't cause air pollution in cities. Air quality standards are only getting stricter.
iamgopal 8y ago
Subsidy should be reduce now to become zero in 20-25 years.
jnxx 8y ago
That the market price of renewable power can and sometimes does go to zero is simply a consequence of that the marginal cost of producing additional energy is zero. The market price does not include the upfront cost but depends only on that marginal cost. About the same is valid for nuclear power. Only the upfront cost is higher, and there is a much larger cost for decommissioning a plant. That's the reason why renewable power needs to be subsidized, at least to some degree, and why nuclear power was always subsidized.
- geezerjay 8y ago
  I've assumed that the reason was that green energy production, which is tied to climate factors (windy/rainy/sunny days), can't be ramped up or down to match demand. As surplus energy can't be stored or sold then its value tends to zero.
talltimtom 8y ago
I find it funny that there is an ongoing discussion of how much electricity bitcoin mining wastes and another ongoing discussion of how to store free electricity. The answer is simple! Mine bitcoins when electricity is free and use the bitcoins to buy power when prices go up! I call the scheme cryprographic energy storage. I am current looking into creating an ICO at $10 billion valuation. /s
- swarnie_ 8y ago
  You've added a /s but some mad man is already pitching this somewhere in the valley and it probably being taken seriously
theshadowknows 8y ago
Or in other words watch out for the power companies to lobby to make wind and solar power illegal.
amarant 8y ago
so...bitcoinminers now have 2 sources of income?
jillesvangurp 8y ago
This is not a problem but a huge opportunity. Instead of shutting down capacity, they need to find ways to utilize it. There are plenty of things you can do with energy. Water desalination, splitting water into h2 and o2, etc. all take lots of energy. California has a huge water shortage and apparently too much electricity.
- dm319 8y ago
  Or use it to remove CO2?
- dalore 8y ago
  Also cryptocurrency. People are complaining about the huge amounts of energy being wasted by it. But if prices are negative, and coming from green sources, then it's not an issue.
korantu 8y ago
The nagging thought here is that this property of wind/solar make them not sustainable in capitalistic setup. Let me explain: soon there will be point where investment in W/S would stop making sense - very difficult to compete when you mostly get your investment to produce power when all your competitors also produce power! In most other markets you are free to produce if the price suits you, and stop otherwise.. . Oil is too cheap - stop pumping it, ice cream in winter not very popular - reduce production, don't pay people to please eat it because your ice cream making machine works best in winter..
kbutler 8y ago
The only reason power costs go less than zero is the contracts that the green (primarily wind) generators have that guarantee a minimum price for their power regardless of time of supply. This creates an incentive for them to keep producing electricity beyond what people are currently willing to pay for it. These minimums have been required to fund the capital expenditures to build the plants and have generally been funded by government subsidies. Coal plants have a different incentive structure - they are very hard to bring online/offline quickly ("base load"). Natural gas plants are _relatively_ easy to spin up/down. I expect this will resolve itself in changes to energy storage and contracts as the technologies involved become more pervasive.
safgasCVS 8y ago
How do you store it for when night comes? If you live near a mountain you could pump it up during the day but not everyone is that lucky. Now what about winter when its overcast half the time and solar panels barely work? Just think how much additional capacity needs to be built to allow for these long periods youre not making power. Basically one has to build 3-4x the capacity to supply what one coal plant produces nonstop. The next Rockerfeller will be the one who stores gigawats on the cheap
qiqing 8y ago
It seems like a good time to use cryptocurrency mining to balance out the periods of zero or negative energy cost.
whateveryou381 8y ago
Another way to see this problem is: you have too much energy at the wrong time of day. This is a fundamental problem with unmitigated installation of green technologies without grid level storage mechanisms. The green plants are losing money while this is happening. Solar/wind energy aren't delivering enough power in non-peak operation to shutdown other traditional sources. It is just the coal/traditional power industry optimizing for total profit...
foxyv 8y ago
So we need a product that uses large amounts of nearly free electricity that can be produced during specific parts of the day. Maybe some sort of smart aluminum factory, hydrogen generator or water purifier. Then again, maybe the capital depreciation would necessitate continuous usage.

537 points by bumholio 8y ago

ars 8y ago

Last time there were "weird" issues with power someone was gaming the system: Enron. Something about this article just seems off to me, something isn't right from a technology point of view, and I suspect someone is manipulating things. (No, I do not have evidence. Just a feeling like this isn't such a hard problem to solve technically.)

wyattpeak 8y ago
What problem are you talking about? I'm not getting any problem from the article at all, except the structural (and well-known) problem of a lot of our power infrastructure being designed for more predictable output patterns than we have today. It's fairly typical 'state of the industry' coverage, with no real surprises.
nachexnachex 8y ago
> Enron "Quien se quemó con leche, ve una vaca y llora." It can seem weird to have an excess of power availability, but it's a consequence of electric power not being easily stored -- electricity is just a good energy _transmission_ system. While using electrostatics (batteries) is possible for storing very small amonts of energy, when you think at a state or country scale, it's just too much to store. This means excess energy must be either immediately consumed, or transformed in order to store it. The most common storage system would be gravity -- build a pump right besides your dam, and pump water upstream so you can use it later when power is not readily available. There are already some reservoirs using this -- at least one in Wales and I've recently read they'd like to build one in Hoover Dam. It's not simple though, because usually water is left to fall yet another bit right after the dam, so a second reservoir right below the dam would be needed. So, what does a negative price mean. As the article puts it, its a signal from the grid that it has no use for your energy, _right now_, as there's an excess of generation. But if untapped, wind and solar will be just lost, so why not offer it to the users. As renewables continue to grow, probably more storages will get built that can buy that excess and this anomaly will cease.
- majewsky 8y ago
  To save you the Google tour: > Quien se quemó con leche, ve una vaca y llora. This appears to be a saying that corresponds to the English saying "A burnt child dreads the fire."
  - JetSpiegel 8y ago
    But the literal translation is "That who has been burn with milk, watches a cow and cries". Much funnier
pandasun 8y ago
I suspect the same thing. There's NEVER anything in this industry that is a coincidence. You might not get a lot of people agreeing with you right now, but just wait a few months and your comment will be spot on.
bsmith 8y ago
Yes, someone (thing?) is gaming the system: cheaper renewable energy generation assets, and thus, weather (which is inherently unpredictable). When the sun is shining and wind is gusting isn't always at highest demand, which depresses rates during these totally unanticipated spikes in supply. Unless someone is playing God with the weather, I don't think there's a finger to point here.

aphextron 8y ago

Can someone please explain then why we are paying the highest prices in the continental US for retail electricity, at $0.28/kWh, in a state with the highest percentage of renewables in the country?

harryh 8y ago
Supply might be high, but demand exceeds it.
sxates 8y ago
Has a power company ever voluntarily lowered rates?
- gameswithgo 8y ago
  yes
mikestew 8y ago
Can someone please explain then why we are paying the highest prices in the continental US Not until you tell us where you live, because I'm not going to backtrack by looking up which state has $0.28/kWh electricity. Though without that knowledge, I'm going to guess something something supply and demand.
- dev_dull 8y ago
  Without a doubt California w/ PG&E.
Latteland 8y ago
you left out your state :-) I thought washington state was the state with most renewables. I pay about 12c per kwh.
- milcron 8y ago
  That's mostly due to the hydroelectric dams, though. Negative prices come from too much solar power in the middle of the day.

deweller 8y ago

Surely Bitcoin miners will snatch up these opportunities soon. Cheap electricity can be translated into money if you have the mining equipment.

rb808 8y ago
Agreed but its a weird transaction system that works better on windy days. :)
- epx 8y ago
  I just saw myself licking the thumb, putting the arm out of the window, waiting a bit and thinking "ok the thumb got chilled enough so it is great time to pay that bill".
- sriram_sun 8y ago
  Interesting point! It seems to me that the economy regularly takes a beating on extreme weather days. However, these things are factored in. For e.g. whenever there is a cyclone brewing near the Louisiana coast, gas prices go up. If there is a blizzard, people stay home. Then there are forest fires - these might cause property destruction and have a long term health impact - directly and indirectly affecting the economy. Although the exact timing of these events are not predictable, a huge part of our economy - the insurance industry tries to factor extreme weather into account. Similarly, mining during windy days should even out, given enough players are invested.
Geee 8y ago
Not really. Mining has high capital costs which can't be covered if the energy source isn't reliable. Mines need to run 24/7 to be profitable.
- bufferoverflow 8y ago
  Well, with free/negative electricity you can mine cryptocurrencies with outdated gear, no need to invest into the latest ASICs. It's free money, just not much of it.

maerF0x0 8y ago

> It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity. Good. That's a well functioning market economy. Those who make poor investment choices need to feel the sting of losses else the market fails to work correctly.

perl4ever 8y ago
I think that negative prices are prima facie evidence of a market economy not functioning "well". Negative prices seem to me to be to be equivalent to fines for doing things that aren't socially useful. If they proliferate, that's a suggestion something is out of whack.
- bjoernw 8y ago
  Only if they stay negative
  - perl4ever 8y ago
    That's reasonable. The headline says it's spreading though.
    - xigma 8y ago
      It's spreading because the market is oversatured with renewables because of government subsidies. A sound investor would stop (or go bankrupt) when the negatives outweigh the positives.
      - perl4ever 8y ago
        Subsidies seem to be on the decline. In fact, I was just reading that due to the Chinese government cutting back, people are predicting PV prices will plummet in the next year.
    - Dylan16807 8y ago
      In this case "spreading" means "happening more often". And you could have a stable rational market where power prices go negative for an hour every day.

stcredzero 8y ago

If the general pattern holds of the electrical power market being like the natural gas market, just at much shorter time scales, then does this mean that we are going to see an increase in electrical power storage in the next few years? Companies have been making money by offering storage and pooling services in energy for quite awhile. It's just that storage has been more difficult from an economic and technical sense with electricity than with, say, natural gas.

EvilEndures 8y ago
Probably that and "quick start" powerplants already serving this function in the UK. https://www.ft.com/content/ba6bd46a-1d75-11e8-956a-43db76e69936 https://www.ft.com/content/ba6bd46a-1d75-11e8-956a-43db76e69... > The episode showed how small, flexible power plants are now bridging the supply gaps, especially at a local level, between intermittent renewables and Britain’s fleet of large, but slow-to-fire-up, gas and coal plants.
- stcredzero 8y ago
  Probably that and "quick start" powerplants already serving this function in the UK. Right. Quick start plants basically convert "stored" energy in the form of natural gas into electrical energy on the grid. The natural gas supply has a chemistry/physics advantage in terms of storage efficiency. (As well as industrial infrastructure already built up.) This would allow us to calculate a target number for the storage cost of batteries which could compete. We can then apply industry trends to see which battery chemistry or power storage technology might become competitive, and when it is likely to achieve that.

dev_dull 8y ago

The logical next step is devices (storage) which can arbitrage these prices and make a profit. Capitalism is a wonderful thing, especially when it’s helping make green energy more efficient.

Firerouge 8y ago
A power wall that's paid to be charged during peak generation, and gets paid again to discharge during peak consumption would be pretty fantastic.
- logfromblammo 8y ago
  Why would a power utility allow customers to perform time-of-day arbitrage when they could do that themselves without upgrading all the meters?
  - dev_dull 8y ago
    Lid shifting. PGE actually pays a subsidy for you to do it via a battery.

rwcarlsen 8y ago

Negative energy prices have been a not uncommon occurrence in various places in the US and EU for a while. They are not necessarily a good thing. They occur due to a combination of how generating sources are managed/dispatched [1] and because of policies that make it possible for (some) generating facilities to still make a profit while bidding to provide electricity at a negative cost (literally paying the recipient to take the electricity). This is not necessarily a good thing and can actually lead to increased carbon footprints of our energy generation mix along with other not necessarily good outcomes [2]. [1] https://www.eia.gov/todayinenergy/detail.php?id=7590 https://www.eia.gov/todayinenergy/detail.php?id=7590 [2] https://ieeexplore.ieee.org/document/6917222/ https://ieeexplore.ieee.org/document/6917222/

talltimtom 8y ago
> They are not necessarily a good thing Indeed. I would even go as far as to say they are never a good thing. They indicate that the plants are having to spend money to keep things running, and that extra cost is carried over to the very same consumers who for short periods get “free” power or get paid to absorb the load. And since the scenario of having negative prices is far from efficient the total cost is still positive. So unless you have a very unusual completely selective powerusage you end up paying more net than if the prices had remained positive but slightly lower throughout.

DoctorOetker 8y ago

I don't truly understand this "problem". I understand storing the energy in batteries is currently very expensive economically and materially. However I believe there are plenty of "goods" (irrespective of if they are bulk materials, or partially processed products) which have a high processing energy per volume ratio (this does not need to be recoverable stored energy). Allow me to give an example: currently we have a drought in Belgium (or at least Flanders). We are not landlocked, there is plenty of water in the sea. Desalination is energy intensive. Instead of only looking at energy storage, why can't we increase the processing capacity (more desalination sites capable of working in parallel), and desalinate say sea water during the energy flood? I don't expect this to be an ideal real world example, only a pattern for identifying such examples: any product (could be composite parts, or bulk material) which is relatively compact and has some high energy per product volume processinng step. Just do the process (desalination, welding some part to another part...) when the sun shines, and store them for later. Products with very high step energy density are good candidates for storing, and could help flatten daily variations, and perhaps even seasonal variations! Now some companies would prefer avoiding risk if they don't have guaranteed orders far enough into the future, then perhaps there should be a market for insurance or loans, so that the company is encouraged to take the risk, instead of wasting the cheap energy...

verisimilitude 8y ago
I believe aluminum is nicknamed "solid electricity" due to the ore purification process or somesuch; which dovetails well with the strategy you outline here!
- bluGill 8y ago
  Unfortunately it doesn't. Aluminum needs a lot of electricity, but it needs to be consistent for several hours. It takes a lot of energy true, but the furnaces need to be at operating temperature. You can't just turn them on and off, there are startup and cool down times that need to be accounted for.
  - docker_up 8y ago

petermcneeley 8y ago

Can someone with a microecon background explain how this is possible? (My guess is that consumption is somehow completely independent of unit price and that its also inelastic?)

MrRadar 8y ago
The key thing to understand is that the electricity market is unusual in that electricity can't be easily "stockpiled" the same way most commodities can be. This means it needs to be produced at almost the same rate it's consumed. Some types of generators have long ramp-up/ramp-down times so it can actually be cheaper to keep them running and pay someone to consume the excess power they're producing compared to how much it would cost to stop them when the energy they're producing is no longer needed and then start back up again when it is. Additionally, some other types of generators (wind and solar) receive tax credits for every kWh they produce so even if you lose money selling the energy you can come out ahead when factoring in the tax credit.
- jabl 8y ago
  Also some producers in some markets receive subsidies in the form of feed in tariffs (fit). With FIT and near zero marginal costs (e.g. wind or solar) you can bid a negative price and still make a profit.
cbdumas 8y ago
No microecon background but I worked in an energy adjacent field for a while. One of the big issues here is that there is a huge price/cost mismatch. Consumers are billed a flat price at all times of the day and year (mostly), but the cost of producing 1 kWh of energy varies enormously throughout the day. This dynamic has always been true to some extent, but a huge increase in distributed solar generation has exacerbated this problem considerably in some places. In most (all?) cases utilities cannot actually set their own price structures without sign off from regulators, so the onus is essentially entirely on utilities themselves to level out their costs (with storage or more flexible generation).
iaw 8y ago

ethagknight 8y ago

Bring on the compressed air economy! http://www.lowtechmagazine.com/2018/05/history-and-future-of-the-compressed-air-economy.html http://www.lowtechmagazine.com/2018/05/history-and-future-of...

mpax 8y ago
“You only sell hot air?” “Yes, I’m full of it! And quite dense!”

brendog 8y ago

the key to solving this problem is a communications link between the supply side and the demand side. It's crazy that there's a complete disconnect between something that consumes power (that in many cases could delay it's consumption until a time when there was excess capacity, or at least make a more informed decision) and the supply side. I started episensor in Ireland and we've been working on this problem for many years.

sounds 8y ago
To add to that, this recent article on HN [1] goes into a lot of great detail on how the economics of a home solar installation are part of the problem. Basically, if there were an incentive for residential solar installations to include a little bit of storage capacity, it would be a net win for the entire economy. [1] https://syonyk.blogspot.com/2018/05/why-typical-home-solar-setup-does-not-work-off-grid.html https://syonyk.blogspot.com/2018/05/why-typical-home-solar-s...
pbhjpbhj 8y ago
It's pretty crazy that 30 years ago in UK Economy7 [7 hours lower rate electric at night] was a big thing, you got cheaper electric at night and had a special meter to accommodate the billing needs. But I can't get that now despite being offered a device that will give instantaneous cost readings.

CapitalistCartr 8y ago

I wonder if there's a way to remove CO2 from the air with surplus electricity without a half-billion dollar plant. That would be a win for everyone. It operates when the wholesale price of electicity drops below its threshold, perhaps only 4-6 hours per day, so would have to be a pretty cheap fixed cost.

tantalor 8y ago
Yes its called a grow light they cost about $7 at home depot. It doesn't matter what you grow; weeds will work.
- logfromblammo 8y ago
  A bioreactor full of algae is a bit more efficient. You can even pump CO2 exhaust from your power plant directly into it. Then you can sell the glop.
  - tantalor 8y ago
    Now that's soylent.
- Dylan16807 8y ago
  How much of the carbon in those weeds will stay out of the atmosphere?
ridewinter 8y ago
This seems like a brilliant idea. Anyone know how it could be done?
- deleted 8y ago
  [deleted]

mabbo 8y ago

Sounds like a great time to be building Tesla-style battery stations. Get paid to take in energy when it's flooded, get paid to output energy when it's not flooded.

bluGill 8y ago
Sounds like it, but as always the devil is in the details...
brandmeyer 8y ago
When residential and small commercial customers can participate in the spot markets, this will happen.

ZeroGravitas 8y ago

Price signals that go negative seem to really freak people out, but the real transition point is when the price dips below the marginal cost. If you're burning 1 dollar of fuel to generate one dollar worth of electricity then anything less is a signal to switch off. If your boiler has physical reasons for not turning off and on sharply then you can find yourself eating a loss in the short term to make money on average even with positive prices. Which puts a monetary price on flexibility or integrated storage.

philipkglass 8y ago
Agreed. The only nationwide incentive that drives negative prices in the US is the wind Production Tax Credit. It's paid per MWh generated, regardless of market price at the time. The solar Investment Tax Credit incentivizes construction, not generation, so there's no incentive for selling solar MWh at negative prices -- though they can go arbitrarily close to zero. If the wind PTC were to be renewed in the future, it could be structured so as to avoid negative-pricing incentives. Instead of $N dollars per megawatt hour, it could be something more like "up to $N dollars per megawatt hour, where $N <= the current average price paid to all generators." At a cap of $23 and current market price of $10, the wind generator would get $10 of tax credit per MWh. At a current market price of $35 the wind generator would get the full $23. State and local incentives would also need similar conditionals to eliminate all negative pricing incentives. IMO a change like this would take a lot of wind out of the sails of fossil generators decrying "irrational and unfair" renewable tax credits. But it would not actually solve the overarching problem of unprofitability. The things mostly killing profitability for threatened fossil plants are lower price spikes and lower median prices. Ensuring slightly-above-zero prices instead of negative prices won't save them.
caf 8y ago
There is another transition point at zero price, though - that's where it starts to make sense to vent the steam to the atmosphere instead of running it through the turbine.
- TheCoelacanth 8y ago
  Is there zero cost involved in safely venting the steam? I wouldn't think so. It's probably not a very high cost, but I can't imagine it's actually zero.

true_tuna 8y ago

Here’s a crazy idea. Batteries? https://cleantechnica.com/2018/08/06/analysis-reveals-that-worlds-largest-battery-saves-south-australia-8-9-million-in-6-months/ https://cleantechnica.com/2018/08/06/analysis-reveals-that-w...

mattmanser 8y ago
They can't magically make national grid grade batteries overnight. So, yes, at the moment it's a crazy idea. The whole point of the trials in Australia and places is to get it to work at the scale needed. You can't just plug in 1,000,000 rechargeable batteries and hope it works.
- jldugger 8y ago
  You'd probably be better off with water pumps to put water back behind a hydro dam. If you assume the presence of hydro, it's a pretty cheap battery to lift water back up.

witchcrathack 8y ago

contact WESTERNHACK78 @ GMAIL .COM for all your hacking job

OliverJones 8y ago

Interesting that the utilities with fixed sunk costs are feeling a pinch from renewables. I suppose some of them will take the bailout path (companies keep profits, taxpayers or ratepayers shoulder losses). Traditional utility economics guarantees a return on capital, and imposes ratesetting in return for geographic monopolies. The real story here is the upending of that model as carbon-based fuel loses its deathgrip over the grid. A consequence of this is less economy-of-scale advantage for vast generation plants. Small distributed generation is more attractive than it was a generation ago. But every market has its quirks. The Texas grid system doesn't have any way to export power to other markets. And West Texas is a windy place. So they find themselves with excess capacity sometimes. I wonder if any grid operators will respond to these price signals by developing smart grids: by realizing that their future lies in offering both electricity and good information about that electricity. Then they can send signals to local time-shiftable equipment (for example car charging, water heating, power storage, desalinization, even blockchain mining). In Norway the grid operators deliver near-real-time supply signals to customers using the same sort of radio signals that tell people the song that's playing on the radio station. Sure, the US is bigger. But if the don't try to do this, they'll never figure out how to do it. One negative consequence of this pinch: as it spreads the net metering deal that current solar-cell households enjoy will fade away.

maherbeg 8y ago

Power companies should really be petitioning the federal government to continue EV subsidies and help market them to create more demand. Generally this seems like a temporary phenomenon until EVs start to come online in en masse.

lucidguppy 8y ago

Champagne problems...

quickthrower2 8y ago
Well champagne has plenty of CO2, too.
- usmeteora 8y ago
  this is what masogyny looks like.
usmeteora 8y ago
I actually don't drink, but when I used too, I preferred Syrah, or whiskey. I understand time domain based analysis is difficult for computer scientists to understand, and most people don't understand the ACOPF. You can go read more about how all of this works, but I understand it's actual work, and the topic is complex enough to span beyond stereotypical litmus test viewpoints on both convservative and liberal sides, which makes people immediately shut down. That's the best way for media to control people, is to polarize them so they are mentally too close minded to even explore the possibility that anyone in the field of "clean energy" might be engaged in corruption. (oh no! I thought only people who sell oil do that!). Exposing pricing incentives to clean energy could encourage more generators to increase performance and reliability. Right now, they throw away roughly 70% of the energy and easily 30% of it could be saved and put into the grid and supplied to people if they had any reward/loss mechanism other than receiving flat government subsidies for simply existing. To believe that clean energy doesn't need a proper incentive system like everything else is fine. Europe does this well, but then the discussion should center around whether real time energy pricing markets should exist at all. To me, it's debatable. I think the fundamentals are sound, but it's too complicated of a system for the average person to understand, so politics rules the compass for how much corruption is at play. That's never a good thing. We would probably be better off operating like how Germany operates. Still, wind turbines and solar panels could do better on their energy efficiency... Acting like clean energy generators should get a free pass, free funding and never be reviewed on performance or reliability metrics or incentivised to perform better is like saying "my child is a genius. He's two years old, but he deserves to be at Harvard. He doesn't need to do homework, or work at anything in his life/ He's my son, hes entitled to all the success in the world because he has "potential" and is objectively more gifted than the other competitors". no, you need to work at things, and get better. Solar panels and wind turbines need to get alot better. They have gaping holes in their performance metrics, all which can be fixed if they could profit from getting better. I challenge you to a test that requires holding more than one thought in your head for 5 minutes. Go find one clean energy company in the U.S. producing solar or wind. The actual company who funds it, and follow the subsidy money. Where does it go? Does it go to power your home? Go find out, tell me where it goes....

komali2 8y ago

>It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity. The "solution" to this "problem" is, rather than investing in a green production method, to desperately cling to existing investments by sending lobbyists to the government to convince them that Clean Coal is the future. I love the line at the end of "The Big Short," I can't remember it verbatim but it was something along the lines of how "once again, like we've always done, we're going to seek out the short term gains and cripple long term ones, for no good reason."

downandout 8y ago
I know you’re being facetious, but it seems to me that the actual solution for these companies’ financial woes would be to simply charge more for energy from their traditional plants when there is demand for it, just as suppliers of any other commodity do. If there are regulations in individual jurisdictions preventing them from doing this, those regulations should be relaxed. The reality is that we are still dependent on traditional energy sources sometimes. Therefore, these plants and the companies that own them have to be able to charge enough stay in business until we don’t need them anymore.

WalterBright 8y ago

I'll suggest again that the solution to this is to charge variable prices to the consumer based on the supply. For example, I pay exactly the same rate, 24/7. Of course this will result in a mismatch of supply and demand. A lot of electricity demand can be shifted to when the supply is cheapest. When the supply varies wildly, like solar and wind do, there's a giant impedance mismatch when demand is charged a fixed price.

psergeant 8y ago
But also: consumers with Powerwalls and other home storage options.
- WalterBright 8y ago
  Heck, you could even go to town running an icemaker at noon when power is cheap, and set out trays of ice in the evening with a fan blowing over it. That can even be turned into an appliance that would be an accessory to your HVAC system.
  - WalterBright 8y ago
    During the winter, one can electrically heat concrete blocks during the day, they release their heat at night. (A concrete block makes for a pretty cheap "battery" !! )
    - hoschicz 8y ago
      Why heat concrete blocks? Doesn't water have a higher thermal capacity?
      - kilotaras 8y ago
        Depends on the actual concrete. It will have lower thermal capacity per weight, but that may be offset with higher density. (The most common concrete would be worse than water with capacity being 1.3 (vs 4.2 in water) and density of 2400 kg/m3).

notatoad 8y ago

This seems like an opportunity for all that currently-useless "smart home" tech that companies are so eager to sell. I don't need smartphone notifications from my internet connected washing machine to tell me when the laundry is done, because i know when i started it. But if i could load the washing machine and tell it to switch on when the cost of electricity dropped below a certain threshold, and it would actually save me money, then suddenly the smart home would actually be providing some value. unfortunately, as far as i know not only is there no consumer tech that does this, but energy companies don't make real-time pricing available to all but the largest consumers.

caf 8y ago
At least for the specific case of washing you can get most of the benefit by moving to a time-of-use tariff and scheduling the washing machine to run during the off peak time. (Washing machines do seem to use a surprisingly large amount of energy, particularly the ones that heat the water internally).
- carlmr 8y ago
  With a quick search I can't find any energy company in my area offering time-of-use tariffs. I remember in the 90s it used to be standard to have a cheaper night tariff. But there's nothing that actually does impedance matching through financial incentives. By the second spot rates might be slightly too volatile for the average consumer to use, but what you could have is smart pricing mechanisms where you can e.g. lock in a rate for the next 1 or 2h and then your washing machine waits for the expected best rate in the day and with maybe a timeout when it starts anyway (if you need it). That way you could usually get good rates when you start your washing machine in the morning and it waits a few hours, depending on price history. This is just a case of simple enough statistics that they can be calculated on the smalles microcontrollers available. Those are already in most home appliances. If you now add Wifi capabilities (which also a lot of home appliances have), you could get the communication done. For any smart appliance the marginal cost to implement this is zero. The investment cost is only the software. You'd still need a company offering this.

torpfactory 8y ago

Negative energy prices are one of the signals which might drive the devlopment of grid scale storage. Very obvious arbitrage potential here. The fact that utilities themselves are complaining about this instead of investing in storage is a little dismaying.

deleted 8y ago
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m1n1 8y ago

So store the excess with a gravity train and sell it back later. https://www.aresnorthamerica.com/ https://www.aresnorthamerica.com/

usmeteora 8y ago

Hi. I'm an Electrical Power Engineer and I analyzed electrical power energy pricing for three years after working a startup designing renewable stations. I worked at the NYISO, which runs all the real time energy pricing markets on a realtime power market separate from the public stock market. The issue is this. NYISO, MISO, ERCOT, CAISO run real time energy markets throughout the U.S. The idea is energy demand is met with energy supply obtained at the LBMP (locational based marginal price) from energy bid into the markets by energy suppliers who can meet demand in that area (transmission line losses are 10%) so there is an advantage to local/decentralized energy as the markets price congestion on these transmission lines. Transmission lines are expensive (consider buying up all those little protesting family farms lawsuits buying individual land) and will melt or if run beyond 90% of their capacity which could leave an area stranded and blacked out by cascading over voltage conditions and blacking out the entire power grid. So the tldr is energy can only move so far before it becomes uneconomic and needs to be synced with another power bus. Now, you have politicians throwing free money in subsidies, grants or 20yr loans to Venture capital funds who contract renewable energy farms like wind for example. They get paid subsidies for the power they produce. That sounds reasonable, but this is where it becomes unreasonable. Power is realtime and needs to respond to demand usage. The other important thing to note is even if we did vote for high taxes in the u.s. to fund clean energy, clean energy is massively inefficient right now, and this doesn't provide an economic incentive to innovate in the industry. Quite the opposite. It makes the people raking up this free money hapoy sitting on their behinds, which brings me to my previous point, The VCs get paid to produce power but not when it's needed. They could store this in a battery somewhere, but it turns out hurricane Sandy flooded a $50million battery that was supposed to back up all of long island. Ironic. Most investors tweaked out after this, and anyways, why would venture capitalists spend their free money on actually investing in making the technology better by buying batteries to save power being produced when it's not needed (a windy night on a mtn vs 4pm the next day when everyone is using power) when they are getting paid either way? The money that isn't lining their pockets is subsidizing their cost of production bids into thr market. So wind plants in NY always bid in at $0 and they get the bid to produce Everytime. Since every five minutes economic dispatch (Google "acopf ferc") creates a price signal based on demand needed and this can actually drive the price negative. The decision making tree here is based on a mixed integer programming algorithm for which the implementation is close sourced by an algorithm contracting company, which I personally think is an egregious injustice to stakeholders but that's just me. Sounds great, how does it get worse? Well, because not in my backyard policy, all of these wind plants are in upstate NY, so they have to waste and dissipate 10% of the power on the way down to NYC clogging the transmission lines, if they happen to be running when it's needed. For the few companies truly interested in putting batteries on their plants, the NYISO, CAISO and ERCOT are decades behind implementing the legal economic markets for these generators to engage in to set up batteries at different entry points on the power grid than where they are supplying it. Germany runs on 50% solar and does well, which clearly shows this is not a technical background but a legal, political and organizational one. However, the economic efficiency is not entirely revealed t us. Do you think the u.s. would vote for 50% taxes like they have in Germany? Hope that helps and feel free reach out if you have any more questions.

whitej125 8y ago

Any good book recommendations that could shed light on the mechanics/economics/incentives of the power industry and how it came to be?

computerphage 8y ago
The Grid. I heard about it two years ago and recommend it often. https://www.gatesnotes.com/Books/The-Grid https://www.gatesnotes.com/Books/The-Grid https://www.gatesnotes.com/About-Bill-Gates/Best-Books-2016 https://www.gatesnotes.com/About-Bill-Gates/Best-Books-2016
- whitej125 8y ago
  Awesome, thanks!

deleted 8y ago

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alexeckermann 8y ago

Some insight into the change year-on-year to the South Australian negative pricing; the change may be due to more active management by AEMO (Australian Energy Market Operator). Wind is now mostly curtailed at ~1.2GW and a minimum quantity of synchronised gas generators operating. This was in response to a system security scare in 2016 where the entire state experienced a 'Black System' event where we lost all power -- lights out in the entire state. That was caused by a storm taking out some primary transmission lines on top of a less-than-ideal market generation mix causing a chain of events but it put focus and revealed the bigger security issue everyone ignored -- higher risk figures were reported but nobody cared until it was a problem. Whilst we have enough wind and solar to take the state to 100% renewable (at times) it is not secure enough to provide industrial contracts or services like FCAS (Frequency Control Ancillary Service). With dwindling industrial contracts for energy providers the generation market has gotten smaller, primarily supplying domestic load/customers. That on top of a privatised market lacking responsibility for planning ahead has left the local market in a flux. The spot market has become so unreliable that some businesses have opted for their own on-site diesel generation. One may assume that this would mean our power prices are pretty low. But that isn't the case. It has been said we have some of the highest electricity prices in the world. In context, this has been because of waining industrial load contracts and profit focussed privatised generators. We just also happen to have a high-wind generator mix. So whilst living in a state with a high % of renewables is great, the lack of planning in a privatised market has left everything a bit messed up. Businesses looking outside the highly variable spot market into the hands of fossil fuel generators, domestic customers paying some of the highest power prices in the world, and nobody is really responsible/accountable for keeping the lights on.

exabrial 8y ago

I'm not anti-gteen, but it's not worth "less than zero", it's the people's money being given away. This isn't a so much as a huge success as it is a legislative oversight. :/

dionna767675 8y ago

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bit_logic 8y ago

A carbon tax combined with excess green energy could cause some unexpected results. Currently, most assume that EV cars are the future. However, there are companies working on processes that can convert CO2 from the air + energy + water into synthetic fuel. There are already working examples of this such as the Canadian company Carbon Engineering. If the energy is green (such as excess solar/wind) this fuel would be basically carbon neutral and exempt from any carbon tax. The process would be economically viable because the carbon tax would raise the price of oil from traditional fossil sources. But the increased price of oil would make a carbon neutral synthetic process like this viable at the same time. If this happens, the EV car becomes much less competitive. From a pure efficiency view, EV is still much more efficient. But there is a lot of existing infrastructure supporting carbon fuel and billions of cars. This synthetic fuel would immediately fit into that. If there's a heavy carbon tax, can EV complete successfully against a carbon neutral synthetic fuel?

adrianN 8y ago
Yes they can because they don't cause air pollution in cities. Air quality standards are only getting stricter.

iamgopal 8y ago

Subsidy should be reduce now to become zero in 20-25 years.

jnxx 8y ago

That the market price of renewable power can and sometimes does go to zero is simply a consequence of that the marginal cost of producing additional energy is zero. The market price does not include the upfront cost but depends only on that marginal cost. About the same is valid for nuclear power. Only the upfront cost is higher, and there is a much larger cost for decommissioning a plant. That's the reason why renewable power needs to be subsidized, at least to some degree, and why nuclear power was always subsidized.

geezerjay 8y ago
I've assumed that the reason was that green energy production, which is tied to climate factors (windy/rainy/sunny days), can't be ramped up or down to match demand. As surplus energy can't be stored or sold then its value tends to zero.

talltimtom 8y ago

I find it funny that there is an ongoing discussion of how much electricity bitcoin mining wastes and another ongoing discussion of how to store free electricity. The answer is simple! Mine bitcoins when electricity is free and use the bitcoins to buy power when prices go up! I call the scheme cryprographic energy storage. I am current looking into creating an ICO at $10 billion valuation. /s

swarnie_ 8y ago
You've added a /s but some mad man is already pitching this somewhere in the valley and it probably being taken seriously

theshadowknows 8y ago

Or in other words watch out for the power companies to lobby to make wind and solar power illegal.

amarant 8y ago

so...bitcoinminers now have 2 sources of income?

jillesvangurp 8y ago

This is not a problem but a huge opportunity. Instead of shutting down capacity, they need to find ways to utilize it. There are plenty of things you can do with energy. Water desalination, splitting water into h2 and o2, etc. all take lots of energy. California has a huge water shortage and apparently too much electricity.

dm319 8y ago
Or use it to remove CO2?
dalore 8y ago
Also cryptocurrency. People are complaining about the huge amounts of energy being wasted by it. But if prices are negative, and coming from green sources, then it's not an issue.

korantu 8y ago

The nagging thought here is that this property of wind/solar make them not sustainable in capitalistic setup. Let me explain: soon there will be point where investment in W/S would stop making sense - very difficult to compete when you mostly get your investment to produce power when all your competitors also produce power! In most other markets you are free to produce if the price suits you, and stop otherwise.. . Oil is too cheap - stop pumping it, ice cream in winter not very popular - reduce production, don't pay people to please eat it because your ice cream making machine works best in winter..

kbutler 8y ago

The only reason power costs go less than zero is the contracts that the green (primarily wind) generators have that guarantee a minimum price for their power regardless of time of supply. This creates an incentive for them to keep producing electricity beyond what people are currently willing to pay for it. These minimums have been required to fund the capital expenditures to build the plants and have generally been funded by government subsidies. Coal plants have a different incentive structure - they are very hard to bring online/offline quickly ("base load"). Natural gas plants are _relatively_ easy to spin up/down. I expect this will resolve itself in changes to energy storage and contracts as the technologies involved become more pervasive.

safgasCVS 8y ago

How do you store it for when night comes? If you live near a mountain you could pump it up during the day but not everyone is that lucky. Now what about winter when its overcast half the time and solar panels barely work? Just think how much additional capacity needs to be built to allow for these long periods youre not making power. Basically one has to build 3-4x the capacity to supply what one coal plant produces nonstop. The next Rockerfeller will be the one who stores gigawats on the cheap

qiqing 8y ago

It seems like a good time to use cryptocurrency mining to balance out the periods of zero or negative energy cost.

whateveryou381 8y ago

Another way to see this problem is: you have too much energy at the wrong time of day. This is a fundamental problem with unmitigated installation of green technologies without grid level storage mechanisms. The green plants are losing money while this is happening. Solar/wind energy aren't delivering enough power in non-peak operation to shutdown other traditional sources. It is just the coal/traditional power industry optimizing for total profit...

foxyv 8y ago

So we need a product that uses large amounts of nearly free electricity that can be produced during specific parts of the day. Maybe some sort of smart aluminum factory, hydrogen generator or water purifier. Then again, maybe the capital depreciation would necessitate continuous usage.