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Compare gasoline prices to the electricity prices in Texas recently, Texas has experienced negative prices in windy periods and prices at the artificial market
by rhodozelia 6y ago
Compare gasoline prices to the electricity prices in Texas recently, Texas has experienced negative prices in windy periods and prices at the artificial market limit of 11,000 $/MWH, which is the equivalent of $396 / gallon of gasoline. Electricity prices change much faster and the swings are much larger than gasoline.
Electricity is different from gasoline since it can’t be easily stored production and consumption are always perfectly in balance.
Gasoline is a world wide commodity, whereas electricity is consumed relatively close to where it is generated.
Oil and gasoline are global markets, but there are many regional electricity markets with their own sets of regulations which are constantly evolving.
From what I’ve seen The only way people sink money in to building electrical infrastructure is with some long term certainty for prices from some buyer. Maybe it is different once the asset is paid off you can operate in the spot market but I believe financiers prefer the certainty of a fixed contract.
Maybe refineries that are built find a buyer for their product before they build them too?
- WalterBright 6y agoI suspect that the wild price increases in Texas are from people not realizing the price had gone up and continued using electricity as usual. With demand not dropping, that just continues to push the price up. I doubt this would happen a second time, as people wise up. They'll either monitor the electricity prices, or put automatic shutoffs in place if the price exceeds $xx. > long term certainty Higher levels of risk simply mean higher prices.