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What does negative electricity price even mean? Is it really worth while for power companies to pay people to receive electricity over their electrical infrastr

What does negative electricity price even mean? Is it really worth while for power companies to pay people to receive electricity over their electrical infrastructure? Would it not be cheaper to drive a metal rod into the ground and send it there? > In practice, it doesn't appear any ordinary Finns are being paid to consume electricity. People pay a markup on the electricity, and often pay agreed rates for power instead of the raw market price. Or am I completely misunderstanding negative priced electricity? Is it just a clickbait term?

hotpotamus 3y ago
My understanding was that it sometimes happens in the commercial market - there's some inertia in large power systems and so sometimes it can help balance things out to pay someone to sink electricity. I read something about this in a paper discussing the economics of grid-scale batteries - basically they can potentially make lots of money by playing both ends of the market and can switch on/off with incredible speed compared to other generation.
- londgine 3y ago
  but how can sending power through the lines, and then paying someone to accept it really be cheaper for the power company than simply sending it to ground?
  - dragontamer 3y ago
    You know that when you send 10MW of power to ground, all the wires will just melt.... Right? Maybe not even melt. The copper might skip the liquid phase and just vaporize to gas at those temperatures. -------- Power to ground doesn't just mean wasting electricity. It also means perfectly turning that energy into heat. We are screwed by thermodynamics. Energy is never wasted, just converted to different forms. We usually call heat waste but in utility scale power design (Megawatts+) it's not easy to find energy sinks in practice that can absorb excess energy generated. ------- In practice, you want the generators to stop making electricity (at least, the generators that __can__ stop in time). But some equipment cant stop in time to respond to the hourly electricity market.
  - caminante 3y ago
    Contractual obligations and grid security trump counterparty economics. You have traders taking/offloading risk. I'm not familiar with this micro-market, but power prices go negative in the US frequently where tax incentives make it profitable to operate renewables plants at prices < -$20/MWh.
dragontamer 3y ago
The USA at least has multiple markets for electricity, even on the same grid. The day-ahead market prices electricity based on projections. This helps utility companies figure out how much to spin up peaker plants or maybe the local Pumped Hydro station the hours of the day they should release water to generate electricity. I don't think the day-ahead market ever goes negative. But the day-of market, maybe just an hour ahead of any particular time, needs finer balance that these big systems can't react to in time. This price of electricity the hour of use is often negative. It exists because yesterday's projection wasn't perfect and there is too much electricity on the grid right now. Some systems can react instantly, but if those instant reaction systems are all used up, it's cheaper to pay negative. -------- Ex: a hydro dam also is juggling the water needs of the community downstream. They cannot send too much, or too little water. They are already set on dropping 100 tons of water today at 10am and cannot change their plans. So someone else needs to catch all that electricity that will be generated from that event. You can't just 'not drop the water', because people downstream will not get their water.
caminante 3y ago
The article could be more clear. BI is just recycling other articles. I doubt you get paid to take electricity in the simple sense and presume it's more similar to pricing situations in the US where it's a price signal (penalty) for congesting the grid but few plants are injecting, unless they're reaping tax incentives. 1. Wholesale spot energy prices don't include transmission charges and other non-energy costs. 2. Don't forget someone might've contracted for that power so regardless of the price, they have to physically or financially settle.
ZeroGravitas 3y ago
It generally means "I (as the owner of a coal or nuclear plant) don't want to reduce my output on a short timescale as that has costs for me, so I'd rather pay someone to take the energy". They mention the hydro dams, but I'm assuming they all have spillways for shedding water without generating electricity, which they would use if forced to pay to generate. Since we already have a grid, it doesn't make monetary sense for every such onflexible producer to invest in their own flexibility unless they can do it for cheaper than the market rate of paying what is effectively a fine every so often.

hotpotamus 3y ago

My understanding was that it sometimes happens in the commercial market - there's some inertia in large power systems and so sometimes it can help balance things out to pay someone to sink electricity. I read something about this in a paper discussing the economics of grid-scale batteries - basically they can potentially make lots of money by playing both ends of the market and can switch on/off with incredible speed compared to other generation.

londgine 3y ago
but how can sending power through the lines, and then paying someone to accept it really be cheaper for the power company than simply sending it to ground?
- dragontamer 3y ago
  You know that when you send 10MW of power to ground, all the wires will just melt.... Right? Maybe not even melt. The copper might skip the liquid phase and just vaporize to gas at those temperatures. -------- Power to ground doesn't just mean wasting electricity. It also means perfectly turning that energy into heat. We are screwed by thermodynamics. Energy is never wasted, just converted to different forms. We usually call heat waste but in utility scale power design (Megawatts+) it's not easy to find energy sinks in practice that can absorb excess energy generated. ------- In practice, you want the generators to stop making electricity (at least, the generators that __can__ stop in time). But some equipment cant stop in time to respond to the hourly electricity market.
- caminante 3y ago
  Contractual obligations and grid security trump counterparty economics. You have traders taking/offloading risk. I'm not familiar with this micro-market, but power prices go negative in the US frequently where tax incentives make it profitable to operate renewables plants at prices < -$20/MWh.

dragontamer 3y ago

The USA at least has multiple markets for electricity, even on the same grid. The day-ahead market prices electricity based on projections. This helps utility companies figure out how much to spin up peaker plants or maybe the local Pumped Hydro station the hours of the day they should release water to generate electricity. I don't think the day-ahead market ever goes negative. But the day-of market, maybe just an hour ahead of any particular time, needs finer balance that these big systems can't react to in time. This price of electricity the hour of use is often negative. It exists because yesterday's projection wasn't perfect and there is too much electricity on the grid right now. Some systems can react instantly, but if those instant reaction systems are all used up, it's cheaper to pay negative. -------- Ex: a hydro dam also is juggling the water needs of the community downstream. They cannot send too much, or too little water. They are already set on dropping 100 tons of water today at 10am and cannot change their plans. So someone else needs to catch all that electricity that will be generated from that event. You can't just 'not drop the water', because people downstream will not get their water.

caminante 3y ago

The article could be more clear. BI is just recycling other articles. I doubt you get paid to take electricity in the simple sense and presume it's more similar to pricing situations in the US where it's a price signal (penalty) for congesting the grid but few plants are injecting, unless they're reaping tax incentives. 1. Wholesale spot energy prices don't include transmission charges and other non-energy costs. 2. Don't forget someone might've contracted for that power so regardless of the price, they have to physically or financially settle.

ZeroGravitas 3y ago

It generally means "I (as the owner of a coal or nuclear plant) don't want to reduce my output on a short timescale as that has costs for me, so I'd rather pay someone to take the energy". They mention the hydro dams, but I'm assuming they all have spillways for shedding water without generating electricity, which they would use if forced to pay to generate. Since we already have a grid, it doesn't make monetary sense for every such onflexible producer to invest in their own flexibility unless they can do it for cheaper than the market rate of paying what is effectively a fine every so often.