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The ERCOT maket is stupidly designed - it excluded demand from shed load from pricing calculations. This caused the price of electricity to drop to a point wher
by erincandescent 5y ago
The ERCOT maket is stupidly designed - it excluded demand from shed load from pricing calculations. This caused the price of electricity to drop to a point where it was uneconomical for many gas power plants to operate (because of the high spot price of gas)
The immediate ramp to the $9000 cap was designed to alleviate this. Yes, it's boneheaded, but I imagine any other manual override of the algorithm would have taken longer to get people to agree to.
The conclusion I keep coming to is that so many free market maximalists are absolutely terrible at designing markets.
- caseysoftware 5y ago> The conclusion I keep coming to is that so many free market maximalists are absolutely terrible at designing markets. There's wisdom in this statement but a better phrasing would replace "free market maximalists" to "humans." Anyone who thinks they can "design a market" assumes all rational, predictable (aka not-human) actors.