3 ms·
I thought about this and negative energy prices make no sense whatsoever to me. I get the whole "free market" idea, but this conveniently ignores all externali
by jwr 3y ago
I thought about this and negative energy prices make no sense whatsoever to me.
I get the whole "free market" idea, but this conveniently ignores all externalities, as well as the cost of subsidies. For example, if subsidies were used to buy generating capacity (like solar panels), subsidies should be (partially) recovered.
We have too many "free markets" where we ignore the cost of externalities.
- RejectedChin 3y agoSubsidies are fixed costs. They are not investments, they are one time payments. Under certain conditions, you have to pay those back, but these are commonly not related to pricing. I don't know how much you know about energy grids, but there is a big reason why negative prices are needed. Energy can't float around on the network. It needs to be used (by direct usage, or storage). If there is too much energy on the grid it needs to be used. There's two ways to solve this, being stop energy from being pushed to the grid, or consume more energy. Both lead to negative pricing to create an incentive to achieve this.
- avar 3y agoI may be wrong, but I don't think this is accurate. If the goal were to consume excess production, power plants could just heat a pool of water on-site, or some similar industrial scale "pointless" electricity use. Rather, negative prices are there because it's in the interest of energy producers to shift demand from the peak, as all their infrastructure needs to be scaled to meet that demand. So don't think of it as free energy at the time you're using it, think of it as a fine for running your washer/dryer etc. during peak hours.