3 ms·

> What I do not hear anyone talking about is that the biggest reason for the spike in power was ERCOT adding cost to the market prices in order to entice genera

> What I do not hear anyone talking about is that the biggest reason for the spike in power was ERCOT adding cost to the market prices in order to entice generators to get more power on the grid quickly. ERCOT has the authority to supplement energy prices with "adders" up to the max allowed cost of $9000/MWh. ERCOT did this for almost the entire duration, even when the market price for power was only at the astronomically high level of $250/MWh. Wow, that's free market thinking gone mad. High prices can't conjure power stations out of thin air on short notice.

ac29 6y ago
Especially in Texas, where in the interest of avoiding as much federal regulation as possible, they have largely isolated their electrical grid. Theres no reason other than political that it couldn't be connected to the rest of the region, or country, or continent. That would have gone a long way in avoiding the worst outcomes.
londons_explore 6y ago
> Wow, that's free market thinking gone mad. High prices can't conjure power stations out of thin air on short notice. Except it can... With high enough prices businesses requiring power will shut down because it's more profitable to shut down and sell the electricity you no longer need than it is to stay open. The key thing stopping this working well is how few people who have the ability to do arbitrage. If I run a Subway shop and I have paid my power provider $0.10/kWh for power for my ovens for the year flat rate, then when the price spikes way up, I should be able to take that power I've already paid for, switch the ovens off, and sell it back to the grid for $99 /kWh, keeping a tidy profit, and effectively acting as a virtual power plant. A few big companies can already do this, but unless that ability is given to most market participants the market will always be vulnerable to collapse.
- tablespoon 6y ago
  >>> What I do not hear anyone talking about is that the biggest reason for the spike in power was ERCOT adding cost to the market prices in order to entice generators to get more power on the grid quickly. >> Wow, that's free market thinking gone mad. High prices can't conjure power stations out of thin air on short notice. > Except it can... With high enough prices businesses requiring power will shut down because it's more profitable to shut down and sell the electricity you no longer need than it is to stay open. > The key thing stopping this working well is how few people who have the ability to do arbitrage. If I run a Subway shop... Nope, sorry. For one, that's basically a fantasy. Few business, and certainly not little sandwich shops, are going to have electricity traders on staff to jump at once-in-a-lifetime arbitrage opportunities (we hope). If sandwiches shop owners are spending their mental energy being ready for electricity arbitrage opportunities of the sandwich business, we're living in a dystopia. Secondly, apparently the high prices were meant to "get more power on the grid quickly," not encourage shuffling the grid's insufficient amount of power around market-style. Your idea doesn't actually solve the problem.

ac29 6y ago

Especially in Texas, where in the interest of avoiding as much federal regulation as possible, they have largely isolated their electrical grid. Theres no reason other than political that it couldn't be connected to the rest of the region, or country, or continent. That would have gone a long way in avoiding the worst outcomes.

londons_explore 6y ago

> Wow, that's free market thinking gone mad. High prices can't conjure power stations out of thin air on short notice. Except it can... With high enough prices businesses requiring power will shut down because it's more profitable to shut down and sell the electricity you no longer need than it is to stay open. The key thing stopping this working well is how few people who have the ability to do arbitrage. If I run a Subway shop and I have paid my power provider $0.10/kWh for power for my ovens for the year flat rate, then when the price spikes way up, I should be able to take that power I've already paid for, switch the ovens off, and sell it back to the grid for $99 /kWh, keeping a tidy profit, and effectively acting as a virtual power plant. A few big companies can already do this, but unless that ability is given to most market participants the market will always be vulnerable to collapse.

tablespoon 6y ago
>>> What I do not hear anyone talking about is that the biggest reason for the spike in power was ERCOT adding cost to the market prices in order to entice generators to get more power on the grid quickly. >> Wow, that's free market thinking gone mad. High prices can't conjure power stations out of thin air on short notice. > Except it can... With high enough prices businesses requiring power will shut down because it's more profitable to shut down and sell the electricity you no longer need than it is to stay open. > The key thing stopping this working well is how few people who have the ability to do arbitrage. If I run a Subway shop... Nope, sorry. For one, that's basically a fantasy. Few business, and certainly not little sandwich shops, are going to have electricity traders on staff to jump at once-in-a-lifetime arbitrage opportunities (we hope). If sandwiches shop owners are spending their mental energy being ready for electricity arbitrage opportunities of the sandwich business, we're living in a dystopia. Secondly, apparently the high prices were meant to "get more power on the grid quickly," not encourage shuffling the grid's insufficient amount of power around market-style. Your idea doesn't actually solve the problem.