4 ms·

I mean, elecricity is fungible, and demand is relatively inelastic. Why on earth would a solar farm sell it to me at a much lower price then the gas powered pla

I mean, elecricity is fungible, and demand is relatively inelastic. Why on earth would a solar farm sell it to me at a much lower price then the gas powered plant?

actionfromafar 4y ago
Gas should have been phased out a long time ago, for geopolitical and environmental reasons.
- tjansen 4y ago
  It's much better than coal. Most places don't have enough hydro, biogas or geothermal, and nuclear ran out of favour. There is currently nothing else that can deliver a base load.
  - actionfromafar 4y ago
    For sure. I understand perfectly well what led up to this. Nuclear also ran out of rivers to cool them in France. Now we will see a fast transition instead of slow and steady transition away from gas. It will be "interesting".
    - tjansen 4y ago
      Transition to what? The only available technologies providing base load are fossils and nuclear.
      - actionfromafar 4y ago
        We will find out. Maybe intelligent load shedding, residential co-generation with thermal stores (underground water reservoirs) to easily switch between heat and electricity generation on demand, large scale battery banks. The EU will basically have to create a war economy energy wise. Germany is in for a world of hurt, because a lot of their industry is built on gas. Germany must switch over to processes based on electricity, in a situation where electricity is at a premium. I believe a two-pronged approach is necessary - decrease the size of the base load and increase production. Not enough is made of decreasing base load. Nothing inherent in the design of the grid says it must act as an infinite battery of infinate power - that's an artifact of history. We need to build more flexible processes around an ability to quickly switch on and off loads depending on current price. (Nuclear is nice but the lead times mean we won't have any new capacity until 10 years from now.)
        tjansen 4y ago
        You're saying that nuclear is too slow, because it takes 10 years, so we should use unproven technology at unprecedented scale instead and hope that it works?
        actionfromafar 4y ago
        I'm saying we should go nuclear. In the meantime, we will be forced to find solutions.
  - msh 4y ago
    A dependency on russian gas should never have been established.
pydry 4y ago
Coz the solar farm cant match supply to demand whereas a gas plant can.
- orwin 4y ago
  Yes, that's what GP said (or what i understood). Basically the cost of electricity should be the average cost of the network's generators. Or, as it is hard to calculate, the operating cost of the most expensive generator we have to put online. Peakers (pulsed coal and gas) are the most expensive to operate, so the price of electricity is based on their costs. That we use gas and coal for baseload, however, is the dumbest thing EU (and German) legislation put us through.
- lultimouomo 4y ago
  And so? I need a KW of power for the next hour, I'll buy from whoever will sell it to me at the cheapest price. Why would anyone sell it to me at less than the highest price (gas) - 0.01€? As long as demand is inelastic I believe that it's unavoidalbe that price will settle up to the price of the most expensive unit sold.
  - rightbyte 4y ago
    You could put a price limit on e.g. water, solar and wind and give kickbacks to the buyers from the share of production of those. Not paying the average production price plus margins is just not working out very well.
pjc50 4y ago
Often the markets for renewables, especially wind, are set up like futures markets so the price the generator receives is less elastic. e.g. Contracts For Difference: https://www.emrsettlement.co.uk/about-emr/contracts-for-difference/ https://www.emrsettlement.co.uk/about-emr/contracts-for-diff... Normally this operates as a subsidy, but now it's returning money to the taxpayer: https://www.current-news.co.uk/news/cfd-costs-to-be-paid-back-to-electricity-suppliers-as-high-wholesale-prices-continue https://www.current-news.co.uk/news/cfd-costs-to-be-paid-bac...

I mean, elecricity is fungible, and demand is relatively inelastic. Why on earth would a solar farm sell it to me at a much lower price then the gas powered plant?

actionfromafar 4y ago

Gas should have been phased out a long time ago, for geopolitical and environmental reasons.

tjansen 4y ago
It's much better than coal. Most places don't have enough hydro, biogas or geothermal, and nuclear ran out of favour. There is currently nothing else that can deliver a base load.
- actionfromafar 4y ago
  For sure. I understand perfectly well what led up to this. Nuclear also ran out of rivers to cool them in France. Now we will see a fast transition instead of slow and steady transition away from gas. It will be "interesting".
  - tjansen 4y ago
    Transition to what? The only available technologies providing base load are fossils and nuclear.
    - actionfromafar 4y ago
      We will find out. Maybe intelligent load shedding, residential co-generation with thermal stores (underground water reservoirs) to easily switch between heat and electricity generation on demand, large scale battery banks. The EU will basically have to create a war economy energy wise. Germany is in for a world of hurt, because a lot of their industry is built on gas. Germany must switch over to processes based on electricity, in a situation where electricity is at a premium. I believe a two-pronged approach is necessary - decrease the size of the base load and increase production. Not enough is made of decreasing base load. Nothing inherent in the design of the grid says it must act as an infinite battery of infinate power - that's an artifact of history. We need to build more flexible processes around an ability to quickly switch on and off loads depending on current price. (Nuclear is nice but the lead times mean we won't have any new capacity until 10 years from now.)
      - tjansen 4y ago
        You're saying that nuclear is too slow, because it takes 10 years, so we should use unproven technology at unprecedented scale instead and hope that it works?
        actionfromafar 4y ago
        I'm saying we should go nuclear. In the meantime, we will be forced to find solutions.
- msh 4y ago
  A dependency on russian gas should never have been established.

pydry 4y ago

Coz the solar farm cant match supply to demand whereas a gas plant can.

orwin 4y ago
Yes, that's what GP said (or what i understood). Basically the cost of electricity should be the average cost of the network's generators. Or, as it is hard to calculate, the operating cost of the most expensive generator we have to put online. Peakers (pulsed coal and gas) are the most expensive to operate, so the price of electricity is based on their costs. That we use gas and coal for baseload, however, is the dumbest thing EU (and German) legislation put us through.
lultimouomo 4y ago
And so? I need a KW of power for the next hour, I'll buy from whoever will sell it to me at the cheapest price. Why would anyone sell it to me at less than the highest price (gas) - 0.01€? As long as demand is inelastic I believe that it's unavoidalbe that price will settle up to the price of the most expensive unit sold.
- rightbyte 4y ago
  You could put a price limit on e.g. water, solar and wind and give kickbacks to the buyers from the share of production of those. Not paying the average production price plus margins is just not working out very well.

pjc50 4y ago

Often the markets for renewables, especially wind, are set up like futures markets so the price the generator receives is less elastic. e.g. Contracts For Difference: https://www.emrsettlement.co.uk/about-emr/contracts-for-difference/ https://www.emrsettlement.co.uk/about-emr/contracts-for-diff... Normally this operates as a subsidy, but now it's returning money to the taxpayer: https://www.current-news.co.uk/news/cfd-costs-to-be-paid-back-to-electricity-suppliers-as-high-wholesale-prices-continue https://www.current-news.co.uk/news/cfd-costs-to-be-paid-bac...