4 ms·

cost of what?

epistasis 6y ago
The cost to generate electricity when asked to. ERCOT operates an auction to match the supply of electricity to demand at any given moment. In PJM, they have an energy market, but there's also capacity markets, where people can get paid by being ready to generate on demand. The idea being that the capacity market will reduce some of the price volatility that happens in ERCOT, where sometimes energy goes for thousands of dollars per MHw. The PJM and ERCOT markets, where any independent operator can interconnect and start trying to make money, are in stark contrast to a lot regulated utilities in the US. Under the regulated utility model, the utility tries to maximize profits under the constraints of what the regulator will let them get away with, and what the regulator will let the utility bill to the customer. Often, the regulator's rules tend to make the utility want to build lots of transmission, because that's a guaranteed 20% profit. Whereas if the utility adds lots of cheaper new generation, they are at risk of putting old assets out of business, which means lost capital investments. So when we want to find out what the true costs of electricity are, we should look to where investors are putting their money in PJM and ERCOT, and ignore anybody who works for a regulated utility. The motives are completely different.
- ThomPete 6y ago
  The cost of generating electricity is not really a useful way to think about it if it doesn't look at the cost of generating reliable electricity. Solar and wind are unreliables and can't actually be used consistently which means that you need to not just factor in the cost of the backup energy but also to take into account that solar and wind are parasitic forms of energy and thus drives up the cost of other forms because they are politically preferred through among other things wind tax credits. So I don't believe that you are actually describing anything close to the true cost until you start doing something like the above.
  - epistasis 6y ago
    In order to proceed to your pre-determined talking point, reliability, you ignored my entire comment and its contens. This is because you are following a playbook from inside an echo chamber that hasn't looked to the reality of new tech that's developing. I said, the cost to generate electricity when asked to, i.e. whatever is needed to make the grid function. I talked about capacity markets, the guarantees against "parasitism." Therefore, the cost is actually reflected in the functioning of the grid. The idea of "parasitic" energy sources is preposterous. If they can't be relied upon, then during those unreliable moments the fuel-based generators can make all their profits. If it were actually somehow cheaper to keep these fossil-based plants in force, point out the market failure to us. We have two entirely different market structures, energy-only in ERCOT, and energy+capacity in PJM, and they are both coalescing away from fossil fuels and towards renewables and storage. Your arguments are years out of date. Everybody knows that fossil fuels have limited lifespan on the grid, the only question is how much they can manipulate market regulations to keep them going for a few more years. Exxon is already paying heavily for their foolishness in overinvesting in assets that were clearly stranded at the time of purchase. How many more years of taking out loans to pay dividends can these companies endure?
    - ThomPete 6y ago
      Now that we speak about echo chambers. No the cost is not reflected in the functioning of the grid, quite the contrary. Wind and solar makes the system more complex AND because it's politically preferred and incentivized through ex. wind tax credits it ends up making the other forms more expensive because they have to give room for wind and solar WHEN they have capacity which obviously makes fossil fuel more expensive. Wind and solar is the affirmative action of the energy system and they deliver a small fraction of the actual energy needed to run a modern society. But hey, keep drinking the kool-aid.

cost of what?

The cost to generate electricity when asked to. ERCOT operates an auction to match the supply of electricity to demand at any given moment. In PJM, they have an energy market, but there's also capacity markets, where people can get paid by being ready to generate on demand. The idea being that the capacity market will reduce some of the price volatility that happens in ERCOT, where sometimes energy goes for thousands of dollars per MHw. The PJM and ERCOT markets, where any independent operator can interconnect and start trying to make money, are in stark contrast to a lot regulated utilities in the US. Under the regulated utility model, the utility tries to maximize profits under the constraints of what the regulator will let them get away with, and what the regulator will let the utility bill to the customer. Often, the regulator's rules tend to make the utility want to build lots of transmission, because that's a guaranteed 20% profit. Whereas if the utility adds lots of cheaper new generation, they are at risk of putting old assets out of business, which means lost capital investments. So when we want to find out what the true costs of electricity are, we should look to where investors are putting their money in PJM and ERCOT, and ignore anybody who works for a regulated utility. The motives are completely different.

ThomPete 6y ago
The cost of generating electricity is not really a useful way to think about it if it doesn't look at the cost of generating reliable electricity. Solar and wind are unreliables and can't actually be used consistently which means that you need to not just factor in the cost of the backup energy but also to take into account that solar and wind are parasitic forms of energy and thus drives up the cost of other forms because they are politically preferred through among other things wind tax credits. So I don't believe that you are actually describing anything close to the true cost until you start doing something like the above.
- epistasis 6y ago
  In order to proceed to your pre-determined talking point, reliability, you ignored my entire comment and its contens. This is because you are following a playbook from inside an echo chamber that hasn't looked to the reality of new tech that's developing. I said, the cost to generate electricity when asked to, i.e. whatever is needed to make the grid function. I talked about capacity markets, the guarantees against "parasitism." Therefore, the cost is actually reflected in the functioning of the grid. The idea of "parasitic" energy sources is preposterous. If they can't be relied upon, then during those unreliable moments the fuel-based generators can make all their profits. If it were actually somehow cheaper to keep these fossil-based plants in force, point out the market failure to us. We have two entirely different market structures, energy-only in ERCOT, and energy+capacity in PJM, and they are both coalescing away from fossil fuels and towards renewables and storage. Your arguments are years out of date. Everybody knows that fossil fuels have limited lifespan on the grid, the only question is how much they can manipulate market regulations to keep them going for a few more years. Exxon is already paying heavily for their foolishness in overinvesting in assets that were clearly stranded at the time of purchase. How many more years of taking out loans to pay dividends can these companies endure?
  - ThomPete 6y ago
    Now that we speak about echo chambers. No the cost is not reflected in the functioning of the grid, quite the contrary. Wind and solar makes the system more complex AND because it's politically preferred and incentivized through ex. wind tax credits it ends up making the other forms more expensive because they have to give room for wind and solar WHEN they have capacity which obviously makes fossil fuel more expensive. Wind and solar is the affirmative action of the energy system and they deliver a small fraction of the actual energy needed to run a modern society. But hey, keep drinking the kool-aid.