8 ms·

Wholesale price is definitely not “zero”. It fluctuates wildly, and if a retailer is exposed to the real time market at the flow date, they can expect to lose h

Wholesale price is definitely not “zero”. It fluctuates wildly, and if a retailer is exposed to the real time market at the flow date, they can expect to lose hundreds of thousands of dollars. RTM prices can easily spike from $50/MW to $8000/MW in an instant if a generator trips. So, retailers buy hedges to cover this risk, at price premiums that reflect the inherent exposure insurance.

zaroth 7y ago
But what’s happening more and more now is that batteries are arbitraging those rate spike, and ultimately those spikes will disappear entirely.
- astanway 7y ago
  Utility scale batteries are not yet a proven and deployed technology. Not to say there aren’t successes - Aliso Canyon and the AEMO installation in Australia have both been very well received by their respective system operators. But there’s a very long way to go before batteries will exist as a viable, general alternative to natural gas peaker plants.
  - tomrod 7y ago
    You're exactly right. Thanks for adding the the knowledge pool today!
  - zaroth 7y ago
    I did not say that they are an alternative to natural gas peaker plants. I said that in markets where the spot price can spike to $8,000 per MWh, grid scale batteries are being deployed in order to serve those load spikes more economically. There is about ~1GWh of grid scale battery storage already deployed in the US alone. 150MW was deployed in 2019 Q1 - which represents 232% growth YoY . ~5 GWh is projected to be installed annually by 2024. [1] I think that this qualifies as proven and deployed. [1] - https://www.woodmac.com/research/products/power-and-renewables/us-energy-storage-monitor/ https://www.woodmac.com/research/products/power-and-renewabl...
    - TheSpiceIsLife 7y ago
      I agree, proven and delayed, when and where it makes sense to do so. It remains to be seen if this will become a common deployment generally speaking, though with more grid scale wind and solar being built it does seem likely, in my opinion.
      - zaroth 7y ago
        Minimum US national load is ~400GWh and peak is ~675GWh, [1] so there’s a tremendous amount of storage which could be used to smooth out the curve. Perfectly smoothing the curve would require something like 2TWh (charging at 150GW for 12 hours and then discharging at 150GW for 12 hours), which would be total overkill, but every little bit can help stabilize the grid—and spot prices—that much more. The fact that 10 years from now we could have 100GWh of storage, and adding maybe 50GWh per year is pretty awesome. Global Li-Ion battery production is forecast to be ~1TWh by then. Between electric cars, home storage, and grid storage, chemical battery production seems like it’s turning into a trillion dollar market. Eventually we’ll add airplanes to that list! [1] - https://www.eia.gov/todayinenergy/detail.php?id=27192 https://www.eia.gov/todayinenergy/detail.php?id=27192
TheSpiceIsLife 7y ago
I didn't know this, thanks for clarifying. Further investigation for my local area: Here's a link to the Australian wholesale spot price and peak price https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard#average-price-table https://www.aemo.com.au/Electricity/National-Electricity-Mar... Where I live, Tasmania, the average for 2019 is $147.91 / MWh and the peak is $163. That works out to Au$0.163. I pay AU$0.26 / kWh, plus a daily supply charge of, if memory serves me correctly, $2.30 - this is to cover network operating costs. That's actually a fairly reasonable mark up on the retails side of things. That makes the other commenter's $0.02 / kWh seem fairly misleading. Maybe for some places some of the time.
- namibj 7y ago
  There are many things you can defer, even at home. Mostly A/C related, but stuff like a self-cleaning oven or a clothes dryer doesn't need to run in the instant, necessarily. The dryer might be able to wait a few hours once the clothes are a bit dry (due to mold and such), as it needs to be ready when you get to it in the morning/afternoon. Until then, it only needs to prevent the clothes from water damage. The oven can maybe just wait a day or a week even to clean itself. It usually works fine even if partially dirty, and just causes some smell due to thermally decomposing food contamination (cheese drips from pizza, etc.).
  - TheSpiceIsLife 7y ago
    I don't need to defer anything, as I'm on a flat rate. I don't like peak metering, as it would forces me to micromanage things in a way that doesn't work for me. I don't have a clothes dryer, they use too much energy. I just hand my clothes on an indoor clothes airer and blow a fan on them. I usually leave the heat pump set to 16 degrees C while I'm out, the combination of mild air temp and the fan dries most of my clothes over night anyway. Hadn't even heard of a self cleaning over. I don't bake a lot, so there's that.
    - rebuilder 7y ago
      It seems odd that you worry about the energy a dryer uses, yet set your thermostat to 16 degrees when you're not even in.

zaroth 7y ago

But what’s happening more and more now is that batteries are arbitraging those rate spike, and ultimately those spikes will disappear entirely.

astanway 7y ago
Utility scale batteries are not yet a proven and deployed technology. Not to say there aren’t successes - Aliso Canyon and the AEMO installation in Australia have both been very well received by their respective system operators. But there’s a very long way to go before batteries will exist as a viable, general alternative to natural gas peaker plants.
- tomrod 7y ago
  You're exactly right. Thanks for adding the the knowledge pool today!
- zaroth 7y ago
  I did not say that they are an alternative to natural gas peaker plants. I said that in markets where the spot price can spike to $8,000 per MWh, grid scale batteries are being deployed in order to serve those load spikes more economically. There is about ~1GWh of grid scale battery storage already deployed in the US alone. 150MW was deployed in 2019 Q1 - which represents 232% growth YoY . ~5 GWh is projected to be installed annually by 2024. [1] I think that this qualifies as proven and deployed. [1] - https://www.woodmac.com/research/products/power-and-renewables/us-energy-storage-monitor/ https://www.woodmac.com/research/products/power-and-renewabl...
  - TheSpiceIsLife 7y ago
    I agree, proven and delayed, when and where it makes sense to do so. It remains to be seen if this will become a common deployment generally speaking, though with more grid scale wind and solar being built it does seem likely, in my opinion.
    - zaroth 7y ago
      Minimum US national load is ~400GWh and peak is ~675GWh, [1] so there’s a tremendous amount of storage which could be used to smooth out the curve. Perfectly smoothing the curve would require something like 2TWh (charging at 150GW for 12 hours and then discharging at 150GW for 12 hours), which would be total overkill, but every little bit can help stabilize the grid—and spot prices—that much more. The fact that 10 years from now we could have 100GWh of storage, and adding maybe 50GWh per year is pretty awesome. Global Li-Ion battery production is forecast to be ~1TWh by then. Between electric cars, home storage, and grid storage, chemical battery production seems like it’s turning into a trillion dollar market. Eventually we’ll add airplanes to that list! [1] - https://www.eia.gov/todayinenergy/detail.php?id=27192 https://www.eia.gov/todayinenergy/detail.php?id=27192

TheSpiceIsLife 7y ago

I didn't know this, thanks for clarifying. Further investigation for my local area: Here's a link to the Australian wholesale spot price and peak price https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard#average-price-table https://www.aemo.com.au/Electricity/National-Electricity-Mar... Where I live, Tasmania, the average for 2019 is $147.91 / MWh and the peak is $163. That works out to Au$0.163. I pay AU$0.26 / kWh, plus a daily supply charge of, if memory serves me correctly, $2.30 - this is to cover network operating costs. That's actually a fairly reasonable mark up on the retails side of things. That makes the other commenter's $0.02 / kWh seem fairly misleading. Maybe for some places some of the time.

namibj 7y ago
There are many things you can defer, even at home. Mostly A/C related, but stuff like a self-cleaning oven or a clothes dryer doesn't need to run in the instant, necessarily. The dryer might be able to wait a few hours once the clothes are a bit dry (due to mold and such), as it needs to be ready when you get to it in the morning/afternoon. Until then, it only needs to prevent the clothes from water damage. The oven can maybe just wait a day or a week even to clean itself. It usually works fine even if partially dirty, and just causes some smell due to thermally decomposing food contamination (cheese drips from pizza, etc.).
- TheSpiceIsLife 7y ago
  I don't need to defer anything, as I'm on a flat rate. I don't like peak metering, as it would forces me to micromanage things in a way that doesn't work for me. I don't have a clothes dryer, they use too much energy. I just hand my clothes on an indoor clothes airer and blow a fan on them. I usually leave the heat pump set to 16 degrees C while I'm out, the combination of mild air temp and the fan dries most of my clothes over night anyway. Hadn't even heard of a self cleaning over. I don't bake a lot, so there's that.
  - rebuilder 7y ago
    It seems odd that you worry about the energy a dryer uses, yet set your thermostat to 16 degrees when you're not even in.