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Maybe a stupid question, but who is producing for negative prices? Wind and solar should be easy to shut off. Gas power plants, too - at least in a matter of ho

Maybe a stupid question, but who is producing for negative prices? Wind and solar should be easy to shut off. Gas power plants, too - at least in a matter of hours. So does all this energy come from massive coal and nuclear power plants that can't shutdown quickly?

rocketbop 3y ago
I imagine there are contractual commitments and SLAs involved.
luto 3y ago
yes, plants that are too expensive or too slow to shut down temporarily (have to) produce for negative prices.
tuukkah 3y ago
Many old wind farms still have a subsidy for several years that makes it profitable for them to produce even with some negative prices. Coal seems to be shut off: https://grid.iamkate.com/ https://grid.iamkate.com/
mrjin 3y ago
Yep, pretty much coming from power plants that cannot shutdown quickly or economically. Sometime it's much cheaper to pay someone to use it up than shutting and bootstrapping again.
WeylandYutani 3y ago
Nuclear power plants always being on means they need more government subsidy than wind farms. The company running them demands a minimum guaranteed price. Free market indeed. It's funny how far wind power has come- courtesy of the almost always windy North Sea.
avar 3y ago
Imagine if by law you need to bus people from A to B every hour, but they get to pick when the trip takes place, but you need to buy and maintain the bus. Your bus can accommodate 40 passengers. At 2-5 in the morning you get only 5 passengers, at peak hours you average might occasionally get 32. If you could induce passengers to shift their habits such that you could be a small bus with a capacity for 30 people your infrastructure costs would go down. So maybe you're charging $5 per trip on average, but $-5 off-peak, and $20 during the peak. Other comments here point out that some power plants can't be easily scaled down, that's also true, but the system is also intended to shift overall demand over the long term. So nobody's producing for negative prices, rather a peak hours consumer is directly subsidizing other customers, because the power company would like them to shift their consumption.

rocketbop 3y ago

I imagine there are contractual commitments and SLAs involved.

luto 3y ago

yes, plants that are too expensive or too slow to shut down temporarily (have to) produce for negative prices.

tuukkah 3y ago

Many old wind farms still have a subsidy for several years that makes it profitable for them to produce even with some negative prices. Coal seems to be shut off: https://grid.iamkate.com/ https://grid.iamkate.com/

mrjin 3y ago

Yep, pretty much coming from power plants that cannot shutdown quickly or economically. Sometime it's much cheaper to pay someone to use it up than shutting and bootstrapping again.

WeylandYutani 3y ago

Nuclear power plants always being on means they need more government subsidy than wind farms. The company running them demands a minimum guaranteed price. Free market indeed. It's funny how far wind power has come- courtesy of the almost always windy North Sea.

avar 3y ago

Imagine if by law you need to bus people from A to B every hour, but they get to pick when the trip takes place, but you need to buy and maintain the bus. Your bus can accommodate 40 passengers. At 2-5 in the morning you get only 5 passengers, at peak hours you average might occasionally get 32. If you could induce passengers to shift their habits such that you could be a small bus with a capacity for 30 people your infrastructure costs would go down. So maybe you're charging $5 per trip on average, but $-5 off-peak, and $20 during the peak. Other comments here point out that some power plants can't be easily scaled down, that's also true, but the system is also intended to shift overall demand over the long term. So nobody's producing for negative prices, rather a peak hours consumer is directly subsidizing other customers, because the power company would like them to shift their consumption.