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> I am utterly astonished that this is never, ever discussed when talking about solutions to fluctuating supply. Having fixed electricity rates 24/7 is simply m

by jabl 5y ago

> I am utterly astonished that this is never, ever discussed when talking about solutions to fluctuating supply. Having fixed electricity rates 24/7 is simply madness in today's electricity generation situation. In many areas wholesale markets work on a spot price basis (although players in the market can of course hedge against low/high prices), but consumers have been very reluctant to go with spot price contracts. This will probably not be helped by the experience of those consumers in Texas who got $10000 electricity bills during last winter's storm, as the prices skyrocketed.

WalterBright 5y ago
The whole idea is to not indiscriminately use electricity when the spot price goes up.
- jabl 5y ago
  Sure, I agree with that. I guess people don't want to be in a position of having to choose between freezing to death and going bankrupt. So they won't go with the spot-price following contract, even though in some sense it would be better for the grid as a whole. I suppose this could be handled with some kind of roof price (with the lost money being inserted as some kind of fixed surcharge on the bill or something like that). That would allow reaping most of the benefits of spot pricing without risking bankruptcy during a crisis.
  - WalterBright 5y ago
    The alternative to demand shaping is the electricity just gets turned off. Which is also what happened in Texas. There's a name for it: "rolling blackouts". Texas had them, they're also popular in California. Another name for it is "shortages". Shortages happen when prices are fixed. Having fixed prices does not at all mean there's enough for everyone. Someone's gonna do without.
    - themaninthedark 5y ago
      Shorages also happen when you don't have enough production capability or transportation capibility. See most of what is happening durring the pandemic. I can assure you the price of containers and wood have not been fixed. Of the two states you mentioned, California is also faceing a housing shortage. I would hazard that the same factors that are causing that shortage are in play for their power problems as well.
      - WalterBright 5y ago
        > Shorages also happen when you don't have enough production capability or transportation capibility. No they don't. > See most of what is happening durring the pandemic. I can assure you the price of containers and wood have not been fixed. The price of car batteries has doubled. But they're readily available. Why do you think all those prices have gone up?
        themaninthedark 5y ago
        Some car batteries may be available but I know for a fact that stock of some ran out. We could not get them from the manufacturer. Same as ECM for cars. You think that Ford, GM or Toyota would not pay a bit extra to be able to sell cars? Wood saw a huge price increase but also ran out. Right now try to source tires. Distributors don't have them, you might be able to find 1 or 2 if you are lucky but you could offer double or triple and you still couldn't buy in volume. Material is not available.
        WalterBright 5y ago
        > We could not get them from the manufacturer. You could buy them from someone who has them. There's a price at which anyone will sell. The problem then becomes the price you'd have to charge for the cars is too much, but someone who is willing to pay that price could still buy them. Which is why new car prices are up substantially. If prices were set by law, this couldn't happen (legally). So then the shortages are real.

by jabl 5y ago

WalterBright 5y ago

The whole idea is to not indiscriminately use electricity when the spot price goes up.

jabl 5y ago
Sure, I agree with that. I guess people don't want to be in a position of having to choose between freezing to death and going bankrupt. So they won't go with the spot-price following contract, even though in some sense it would be better for the grid as a whole. I suppose this could be handled with some kind of roof price (with the lost money being inserted as some kind of fixed surcharge on the bill or something like that). That would allow reaping most of the benefits of spot pricing without risking bankruptcy during a crisis.
- WalterBright 5y ago
  The alternative to demand shaping is the electricity just gets turned off. Which is also what happened in Texas. There's a name for it: "rolling blackouts". Texas had them, they're also popular in California. Another name for it is "shortages". Shortages happen when prices are fixed. Having fixed prices does not at all mean there's enough for everyone. Someone's gonna do without.
  - themaninthedark 5y ago
    Shorages also happen when you don't have enough production capability or transportation capibility. See most of what is happening durring the pandemic. I can assure you the price of containers and wood have not been fixed. Of the two states you mentioned, California is also faceing a housing shortage. I would hazard that the same factors that are causing that shortage are in play for their power problems as well.
    - WalterBright 5y ago
      > Shorages also happen when you don't have enough production capability or transportation capibility. No they don't. > See most of what is happening durring the pandemic. I can assure you the price of containers and wood have not been fixed. The price of car batteries has doubled. But they're readily available. Why do you think all those prices have gone up?
      - themaninthedark 5y ago
        Some car batteries may be available but I know for a fact that stock of some ran out. We could not get them from the manufacturer. Same as ECM for cars. You think that Ford, GM or Toyota would not pay a bit extra to be able to sell cars? Wood saw a huge price increase but also ran out. Right now try to source tires. Distributors don't have them, you might be able to find 1 or 2 if you are lucky but you could offer double or triple and you still couldn't buy in volume. Material is not available.
        WalterBright 5y ago
        > We could not get them from the manufacturer. You could buy them from someone who has them. There's a price at which anyone will sell. The problem then becomes the price you'd have to charge for the cars is too much, but someone who is willing to pay that price could still buy them. Which is why new car prices are up substantially. If prices were set by law, this couldn't happen (legally). So then the shortages are real.