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Solar farm has to switch off every second day due to negative prices
- jillesvangurp 7y agoThe solution is to deregulate the market and allow multiple companies to buy and sell electricity. The problem here is not an over supply but poorly regulated demand that causes energy to be priced higher than is justified; mainly to protect expensive sources of energy such as coal and gas plants. The basic issue is not that there is no demand but that it is unevenly spread. People turn on their ACs when they get home after work. Peak demand is in the evening when the sun is about to go behind the horizon. Peak supply is in the late morning and early afternoon when people are at work. So, all you need is tuneable demand. Say you had a web service that simply announces the current price of electricity that updates in real time based on your production capacity and a whole bunch of things that can turn themselves on/off based on that price. Whenever there is excess demand it just continues to drop that price until demand picks up. Now say you have an apartment complex with a lot of batteries in the basement and a bit of simple electronics that controls the charging behavior based on the price several energy providers (why limit to one). Now basically you have an energy sink that charges cheaply that automatically picks the cheapest provider. Now imagine that battery has some overcapacity that can be sold back to the grid when prices are highest (aka. demand is high). Now you have an apartment building that buys energy when it is cheap and sells energy when it is expensive and it has enough capacity to serve its own needs. Add EVs to the mix and battery to the grid technology and you have a mobile battery capacity that when it is not driving around can be plugged in to act both as an energy source and sink as well. Now make the rest of the energy available to industrial users that can install their own solar panels and you have even more supply and demand. The key bottleneck in this system is the current oligarchy that controls prices: the existing energy companies. They make the most profit when prices are high. They don't mind buying in some excess capacity cheaply but they have no incentive to do that when they don't need it. And since they control the market, there's nobody else to sell it to. Worse, since they have fixed cost associated with legacy plants, they have to keep prices high to prevent those becoming loss leaders. The whole system is geared towards protectionism rather than efficiency. Once you create an open market for energy, that's no longer sustainable.
- ThrustVectoring 7y agoYour analysis completely ignores the capital costs associated with building out a variable demand system. Every battery built will tie up a certain amount of money into fixing grid pricing variability, as well as depreciate in value and usefulness over time. If electric overproduction is an infrequent enough condition, it may well be cheaper to waste energy than to build a battery that just sits there 300+ days a year doing nothing.
- jillesvangurp 7y agoCapital cost vs. captial gains is what normally dictates these things except we are talking about effective monpolies where the monopolist is protecting their prior investments and can choose to deny access to the market for everyone else. It's basically forcing consumers to help them turn a good ROI on already obsolete investments that should rightfully be killed ASAP otherwise.
- jillesvangurp 7y agoIt doesn't ignore it but the premise of capital cost is that it then gives you access to potential gains. That breaks down if you are dependent on selling to a monopolist that sets prices based on their own needs rather than the market needs. In this case, local energy providers get protective about their more costly infrastructure when faced with homeowners supplying cheaper energy to the point where they charge negatively. Right now the power market is weird because people are deliberately installing less solar than they need/want because their local energy providers are simply refusing to buy the excess energy beyond a certain number of kwh. And since they are the only party you could feasibly sell to, a lot of homeowners simply install less capacity. Think about it, you've got engineers on the roof to install solar panels, wires, inverters, etc. and the panel cost is only a small portion of the overall cost. Why would you cap your installation at 4kwh when your needs are closer to 10 kwh and you have room for 20 kwh? That's exactly what's happening in a lot of places.
- emirp 7y agoWhat you're describing is known as a smart grid in the industry (https://en.wikipedia.org/wiki/Smart_grid https://en.wikipedia.org/wiki/Smart_grid). I can't speak for other countries but Australia has quite a few initiatives for progressing toward a smart grid but it simply takes time. Here is some info: https://arena.gov.au/projects/?project-value-start=0&project-value-end=200000000 https://arena.gov.au/projects/?project-value-start=0&project...
- aussieguy1234 7y agoInstead of switching off, why not just mine crypto?
- dbrgn 7y agoProbably because crypto miner ASICs are not cost effective when run only every once in a while.
- lazyjones 7y agoBuy some Tesla Megapacks, install some DC fast chargers on-site and sell electricity for 0.2$/KWh or so all day long.
- emirp 7y agohttps://www.abc.net.au/news/2018-04-06/tesla-battery-outperforms-coal-and-gas/9625726 https://www.abc.net.au/news/2018-04-06/tesla-battery-outperf... "The world's biggest lithium-ion battery — built by tech billionaire Elon Musk's company Tesla last year — has survived its first summer in South Australia's mid-north." "And according to a new report by the Australian Energy Market Operator (AEMO), it's outperforming coal and gas generators on some key measures." "AEMO says the Hornsdale Power Reserve is capable of charging at a rate of 80 megawatts and discharging at 100 megawatts." "It has a storage capacity of 129 megawatt hours." "That means it could operate for about 75 minutes at full capacity."
- baot 7y agoAh, if only the professional electrical engineers had thought of batteries. Thank goodness there are software developers to tell them what to do.
- teamonkey 7y agoQuestion: what happens to the solar energy when PVs are disconnected? I presume reflected or absorbed as heat, but is a PV under load cooler/less reflective?
- icebraining 7y agoYes, a disconnected panel runs slightly hotter.
- mmmuhd 7y agoI think they should weigh the option of investing in African countries where the demand for energy is sky high, instead of switching off every second day
- growlist 7y agoI'll add my ideas to the others for using the excess power: 1. drill a big storage hole of some kind. Surely Australia could use a gigantic underground reservoir 2. install a plant next to the solar farm and make compressed gases from the atmosphere
- alex_duf 7y agoI think this is a great news, there's now a financial incentive to invest into storage
- jhoechtl 7y agoI think there is a fundamental flaw in the whole discussion. We are doing alternative energy for two reasons: 1. As a means for alternative cheap energy; 2. As a means to gain independence from imported energy (oil, coal); 3. As a means to protect the environment If a solar farm has to be switched off, because the power can not be sold, apparently 1.) has dominance over 2 and 3. If environment protection would have precedence, consumers should be forced to consume higher priced energy?
- jmpman 7y agoWould it be cost effective to have vats of aluminum oxide sitting idle, waiting for these negative pricing events? The raw material is cheap, and the electrodes are only worn away when actively smelting. With interest rates so low, the idle capital may not be a major impact to profitability.
- tinus_hn 7y ago‘Solar farm can switch off every second day in case of negative prices’
- g82918 7y agoIt seems almost silly that we can generate more energy than we can use some, but not all of, the time.
- s1artibartfast 7y agoInconsistency has been the known challenge of renewable for decades. You also need to duplicate the entire energy production infrastructure so that we can operate on 100% fossil fuels if the wind isnt blowing and the sun isnt shining.
- movedx 7y agoWhat's more annoying is we can provide that energy for virtually free, but because it doesn't make someone else profits it gets switched off. EDIT: just to clarify: I mean I wish that solar could be socialised and made into a social commodity. We're becoming increasing dependent on electricity as time passes, almost to the point it'll be difficult to live well without it. If that ever becomes the case, I would want to see a social effort to ensure electricity becomes available to all, just like health care and drinking water. I also understand that there are costs involved with providing these services, but again: social commodity. That means taxes and everyone chips in to ensure we have these resources available to all so that all can benefit and live equally.
- icebraining 7y ago> We're becoming increasing dependent on electricity as time passes, almost to the point it'll be difficult to live well without it. If that ever becomes the case, I would want to see a social effort to ensure electricity becomes available to all, just like health care and drinking water. I think we're already at that point, which is why many countries have subsidized electricity rates for low-income households.
- zdragnar 7y agoOverloading the grid isn't a good idea, generally speaking
- 7y ago
- brownbat 7y agoStorage is definitely the wise answer here, as the article mentions. The fun answer here is giant crypto farm.
- ourlordcaffeine 7y agoAn answer that no-one seems to have thought of is a liberalized energy market where non physical traders are allowed, and allowed to deliberately take themselves to imbalance.
- oxinabox 7y agoTo be clear: this is literally what the US has. I suspect @ourlordcaffeine knows this, but for anyone else reading it.
- ourlordcaffeine 7y agoUK as well
- rosege 7y agoYeah I had thought surely they can find a use for free electricity rather than just turning it off
- Aperocky 7y agoFree electricity that turns off half the time and run basically randomly for the other half? Without a battery it’s useless, and you have to pay for that battery. Treating the electric grid as a battery shouldn’t be free. It’s just in this case they found the cost of battery to be greater than the value of the electricity they’re creating.
- sneak 7y ago> Free electricity that turns off half the time and run basically randomly for the other half? Without a battery it’s useless I can't imagine that's true. Spot instances come to mind.
- JMTQp8lwXL 7y agoAn explanation of the mechanics of how I'd have to pay somebody else to take my electricity (e.g., a negative rate) would be helpful. As prices approaches 0, I could take the excess electricity and say, mine cryptocurrency. Is nobody considering the arbitrage opportunities here? Take the 0-cost electricity, move water up a hill, and convert it back to electric when it's needed, etc.
- dwd 7y agoThey mentioned moving water uphill with the Wivenhoe pumped hydro which is about 3000km away in Qld. This is also where the NSW interconnect will help as most pumped hydro is in NSW.
- DevoidSimo 7y agoPeople do, we have snowy hydro who normally correct these negative prices by pumping water uphill into a dam. They then double dip on profits by generating when the cost is positive. Very profitable operation although the initial infrastructure cost is high.
- wyxuan 7y agoCan’t they discharge it for free? Why do they have to pay to send it into the grid? The crypto one won’t work because there would only be free electricity half of the time, and the water idea is good but it takes immense capex and time to make
- steve19 7y agoThe grid has to finely balance supply and demand. You can't just dump power into the grid. If you did the grid frequency would increase out of spec and it could damage connected equipment and machinery. Water storage would only work if there is a steep mountain or big hill nearby. Another way to look at negitive pricing is the grid is paying industrial users to burn as much power as they can.
- thaumasiotes 7y agoI think the dominant question here is, "I have this machinery that produces electricity, and it's hooked up to the grid. Why can't I also hook it up to the ground, and -- during periods of negative prices -- send the electricity into the ground instead of the grid?" Nobody charges you to ground your wires.
- rosege 7y agoI'm in SA and I'm currently looking at getting solar panels and maybe a battery because we have the highest cost of electricity in the country. I'd like to know why we have the highest when the price seems to be going negative every other day?
- stephen_g 7y agoHistorically it has been expensive because S.A. was always reliant on a lot of gas and imports. More recently though - if consumers have been willing to pay that much, then the private monopoly that runs the distribution network and the private companies that run the generators and retailers don’t really have much incentive to drop prices...
- beefield 7y agoNot knowing anything, but making an educated guess. Transmission costs?
- rosege 7y agoPossibly - but NSW, QLD & TAS are well known to have "gold plated" their network and still have lower cost than here.
- ENGNR 7y agoWholesale is only around 30% of what you pay. Distribution takes 40%, and retail (customer support and sending bills) is the other 30% As for why it's what way... probably regulatory capture
- roenxi 7y agoThe market reacts quite quickly if a company is going bankrupt; so assume for the sake of argument that all the electricity producers in the market are turning at least a small profit. If power prices are negative but the provider is making a profit, then at some other time prices will have to be very high to bring the average price sold positive. I assume that is what is happening here. I don't have a lot of respect for SA's electricity strategy, but it may work out. At least there are interesting opportunities if anyone can think of a way of profitably sinking vast amounts of power; there has to be something useful that can be done. Ironically in this case, using more power might reduce power prices because the providers don't need to charge as much in off-peak times.
- LAMike 7y agoMight want to buy some of the Power Miners: https://powerminingshop.com/ https://powerminingshop.com/ As chips reach the limits of the cutting edge tech, the only advantage will be how expensive your electricity is rather than replacing chips every 12 months
- nosuchthing 7y agoWhy waste energy on a system that's designed to grow increasingly inefficient over time (Crypto PoW mining), when you could simply store the energy or use it on something that is helpful to the local community, as in food or manufacturing?
- swinglock 7y agoIs that simple?
- dnpp123 7y agoYou can move miners easily between inefficent sources of energy. Water, dams, etc... not that much. Using current battery technology would be too nefast for the environment.
- jeen02 7y agoWhy work for money when you can volunteer your time instead to the local community?
- Udik 7y agoBecause the whole premise is that you don't really have a way to store or use that energy in other ways. Then converting it into cryptomoney makes sense- then you can use that crypto to buy things which are helpful to the local community- even things that are produced on the other side of the world, where your energy could never reach. An interesting thought is that of using that crypto exclusively to buy energy when the prices are non-negative. But I'm not sure that makes sense from an economic point of view, it's a snake biting its tail.
- 7y ago
- ISL 7y agoSounds like someone needs a small aluminum smelter?
- Scoundreller 7y agoOr hydrolysis.
- ISL 7y agoThat's even better -- I imagine that those systems can turn on and off much more quickly than smelters.
- qtplatypus 7y agoAustralia has some of the worlds largest aluminium smelters. Unfortunately they are on the south east side of the country and the places that have the negative price events are in the north and south west. The long term solution is to connect the grids together so the places with an excess of supply are connected to the places with an excess of demand.
- deleted 7y ago[deleted]
- cetra3 7y agoI wish these prices were reflected to the consumer. Electricity bills in South Australia are ridiculous, and as a renter you don't have the luxury of installing solar panels.
- baroffoos 7y agoWhen I was looking I saw a fair few rental properties advertise that they have solar installed and that you will not have to pay electricity bills for reasonable usage. It was still a minority of properties set up like this but I imagine in the future many more will have solar since it will make them highly desirable.
- Felz 7y agoI'm not sure how South Australia works, but I think in general you pay for the cost of electricity generated (here going to zero) AND for the infrastructure required to get it to your house. In part that's why rooftop solar is hazardous for a grid in high amounts- you don't pay the infrastructure price half the time, but the infrastructure still has to be there for you.
- cperciva 7y agoIndeed -- so called "net metering" ignores the fact that the costs are driven by both consumption and capacity. Providing a 400A supply to a house is expensive even if you never draw any power, because the utility has to be ready to provide the power.
- ZeroGravitas 7y agoThe reason for net metering (other than it being a cheap hack to take advantage of just rewinding a standard power meter) is that the energy from the houses is valuable to the grid in lots of ways (e.g. in reducing peak generation and transmission demand). It doesn't ignore those costs you mention, it just also doesn't ignore the benefits. In some jurisdictions the benefit exceed the money the householders are being paid (it varies depending on how dirty the grid is, when peak load happens etc.). For whatever reason, like negative prices, this attack on net metering appears to resonate well with people who don't like renewables, but it's just a talking point from utilities who see the ability to increase their own profit by taking but not paying for that benefit via political shenanigans. Apparently the idea that electricity can be differently valuable at different times of the day or year is something that ordinary people are insulated from, so paying an average seems normal, but getting paid an average seems crazy. But it's not something being argued against from a wider economic standpoint of efficiency, as it is literally a good thing, that's why people proposed it in the first place and continue to support it.
- lightedman 7y agoIt's a PV farm, they could just take parts of the PV grid offline instead of playing arbitrage games such as paying others to take their power or trying to build storage systems (though any half-smart PV solar farm has some minor storage on-site.) It's not like the entire system is hooked to a singular large MPPT controller. They aren't bound by the typical issues of energy generation which nuclear or constant hydro-electric have. BTW: Did you know solar panels can self-immolate if seriously defective during manufacture?
- qtplatypus 7y agoIt isn’t the PV farm that is paying people to take there power. It is the baseline coal generators.
- lightedman 7y agoThe article makes it abundantly clear that this is not the case. The first three paragraphs alone have most of the effective article impact. "When Australia’s renewable energy portfolio reached its important milestone on Wednesday of providing 50 per cent of the main grid’s demand for the first time, one solar farm couldn’t be part of the fun, and had to look on from the sidelines. The sight of wind and solar farms being switched off when wholesale electricity prices fall into negative territory has become increasingly common over the last few months, particularly in Queensland and South Australia. But the facility that appears to have been affected the most has been the 95MW Tailem Bend solar farm in South Australia, owned by Vena Energy and operating since earlier this year." Further reading shows that coal plants rarely need to shut down as evidenced by: "It’s common to see wind and solar farms switch off when prices go into negative territory, or get close to zero. It happens either because their off-take agreements oblige them to do so, or because they are “merchant” facilities that take the spot price and don’t want to be paying other parties to take their output if prices do go negative." Coal generators almost NEVER pay for arbitrage in Australia because of various specific agreements (and limits to the arbitrage that is possible in many areas.) It is almost the exclusive domain of wind and solar plants.
- pbreit 7y agoThis doesn't make a ton of sense and the article is so poorly written it's hard to understand what's going on.
- ZeroGravitas 7y agoI'm not a fan of most reporting of these negative price events. First, they rarely explain why the price is negative. As the article explains, solar can switch itself off, so it's nothing physical about solar that can cause negative prices, as all solar can switch itself off before it goes negative it would bottom out at zero for those reasons. In most cases I've seen so far, contractual agreements with gas, coal or nuclear (who struggle to switch themselves off quickly without hurting themselves) have been the reasons for negative pricing and the grid wasn't actually at 100% renewable at the time of the curtailment. In other words, solar switches itself off, while other, dirtier plants get fined (negative price!) for demanding that they be allowed to still run. In South Australia they're doing pretty well on renewable, so it's possible they actually are at 100% renewable at these times (would be good for the stories to clarify). If that's the case then the negative price is most likely caused by subsidies to wind that are paid per generation. If the subsidies to two renewable plants are different then one will bid the other off the market at that point since the price can go down to the opposite of the subsidy before they make an actual loss. All in all, these negative prices are useful market signals. I wish the weren't covered by journalists who seem to think negative numbers are taboo for some reason. The fact that it's the same plant that gets switched off repeatedly (rather than all solar reducing output) makes me think this is either a contractual thing that only affects its owner or a regional transmission thing that only affects its geographic location. Again, would be nice for stories to find out which.
- potentialverand 7y agoAgree with all your points. South Australia gets additional energy from grid interconnections from other states, and it's gas turbine power plant at Torrens Island. Additional power from other sources like diesel generators when required https://www.sa.gov.au/topics/energy-and-environment/energy-supply/sas-electricity-supply-and-market https://www.sa.gov.au/topics/energy-and-environment/energy-s...
- MaysonL 7y agoTowards the end of the article there is discussion of coming factors that may eliminate the negative price shutdowns: a) construction of grid interconnects to New South Wales, and b) new pumped hydro storage to enable time shifting (i.e. using daytime power to enable nighttime generation).
- nabla9 7y agoEXPLANATION: Some power sources can’t be shut down and restarted quickly and cost-efficiently. If the cost of stopping and restarting plant is higher than the cost of selling energy at a negative price for some time, prices go negative. This kind of price fluctuation can increase the overall cost of energy production. We need cost effective power storage solutions and better electric grids to make renewable more effective. https://en.wikipedia.org/wiki/Duck_curve https://en.wikipedia.org/wiki/Duck_curve