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I don't think it's that simple. What does your aluminum smelting plant do when the power isn't free, sit there unproductively? Or purchase electricity when it

I don't think it's that simple. What does your aluminum smelting plant do when the power isn't free, sit there unproductively? Or purchase electricity when it's expensive? Either will cost you money. Maybe you can still come out ahead in either of these cases, but that depends on quite a few factors.

Gibbon1 6y ago
Even if you are running an aluminum smelter 24/7 having periods when the price of electricity goes to zero helps your bottom line a lot. Aluminum is difficult case because the electrolytic cells have to be kept hot. I've saw paper describing electrowinning iron. The process used aqueous sulfate electrolyte. One assume the capital cost of the cells themselves would be minimal.
- bigbubba 6y ago
  Yes but if the average price of the clean energy is sufficiently high, brief periods of free clean energy may not be enough to offset that.
  - imtringued 6y ago
    It's the opposite. Low whole sale energy prices in Germany cause policy failures that increase the EEG surcharge. Here are some made up numbers. If the wholesale price is 0.10€ per kWh but the subsidized price is 0.20€ per kWh then the EEG budget has to make up the 0.10€ difference. That difference is added to the retail price so you end up paying 0.10€ for the electricity itself and 0.10€ per kWh for the EEG surcharge. Industrial users are exempt from the surcharge so consumers end up paying electricity bills for the biggest energy consumers. You actually end up paying 0.10€ for the electricity, 0.10€ for the EEG surcharge and 0.05€ for the EEG portion that industrial companies didn't pay for. Total: 0.25€ which is higher than even the subsidized price. Meanwhile industrial users only pay the wholesale price of 0.10€. Of course I have simplified grid costs and taxes but this is the general problem with the EEG surcharge.
colechristensen 6y ago
You have variable pricing on electricity, and heavy industrial users build up business plans that take advantage of the market. Prices will adjust until the inefficiencies are eaten up by market forces. It’s not “maybe you can come out ahead” the occasional abundance of very cheap electricity creates an opportunity that will be filled by whoever can make the most of it.

Gibbon1 6y ago

Even if you are running an aluminum smelter 24/7 having periods when the price of electricity goes to zero helps your bottom line a lot. Aluminum is difficult case because the electrolytic cells have to be kept hot. I've saw paper describing electrowinning iron. The process used aqueous sulfate electrolyte. One assume the capital cost of the cells themselves would be minimal.

bigbubba 6y ago
Yes but if the average price of the clean energy is sufficiently high, brief periods of free clean energy may not be enough to offset that.
- imtringued 6y ago
  It's the opposite. Low whole sale energy prices in Germany cause policy failures that increase the EEG surcharge. Here are some made up numbers. If the wholesale price is 0.10€ per kWh but the subsidized price is 0.20€ per kWh then the EEG budget has to make up the 0.10€ difference. That difference is added to the retail price so you end up paying 0.10€ for the electricity itself and 0.10€ per kWh for the EEG surcharge. Industrial users are exempt from the surcharge so consumers end up paying electricity bills for the biggest energy consumers. You actually end up paying 0.10€ for the electricity, 0.10€ for the EEG surcharge and 0.05€ for the EEG portion that industrial companies didn't pay for. Total: 0.25€ which is higher than even the subsidized price. Meanwhile industrial users only pay the wholesale price of 0.10€. Of course I have simplified grid costs and taxes but this is the general problem with the EEG surcharge.

colechristensen 6y ago

You have variable pricing on electricity, and heavy industrial users build up business plans that take advantage of the market. Prices will adjust until the inefficiencies are eaten up by market forces. It’s not “maybe you can come out ahead” the occasional abundance of very cheap electricity creates an opportunity that will be filled by whoever can make the most of it.