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This is known as a Virtual Power Plant.[0] In the case of this cryptocurrency company, they are selling the electricity that they "would" be consuming if it was

This is known as a Virtual Power Plant.[0] In the case of this cryptocurrency company, they are selling the electricity that they "would" be consuming if it wasn't being bought back from them. If they hadn't "sold" it back to the grid, it wouldn't have been available to be used by other customers. [0]https://en.wikipedia.org/wiki/Virtual_power_plant https://en.wikipedia.org/wiki/Virtual_power_plant

arcticbull 3y ago
What an absurd name for basically a big resistor generating heat you are paid to disconnect from the grid when it’s about to go up in flames. They need batteries not sudoku solver bots. Talk about doublespeak in this case, wow.
- anonporridge 3y ago
  If there is no buyer for excess solar/wind electricity, then it must curtail and earn less income. Less income means it takes longer to pay off initial capital costs and generate return. Slower investment return from solar and wind deployments means expansion of them will take longer. If wind and solar takes longer to roll out at full scale for financial reasons, then our goals towards fossil fuel reductions takes longer. Therefore, if you can find a buyer who will suck up any excess solar and wind and pay them, we eliminate fossil fuels quicker.
  - jcranmer 3y ago
    > If there is no buyer for excess solar/wind electricity, then it must curtail and earn less income. Solar and wind have the lowest marginal costs of production, which means they'll win out on the wholesale power markets. Furthermore, Texas is a state with increasing population growth and increasing energy needs (hotter planet means more A/C, after all), and has regularly been setting all-time highs on daily energy consumption. So there'll always be a buyer for the excess electricity.
    - friend_and_foe 3y ago
      You should read about base load energy production to understand what's going on here.
      - jcranmer 3y ago
        Look, this is Texas. It's not about base load energy production. This is a system that--several times this past year--is running at demand around 100% of supply capacity. That shouldn't happen; it's just bad industrial engineering. The cryptocurrency mines aren't adding base load here. It's adding more load on a system that's already taxed to its limits, and justifying it as a good thing because "oh, we can get paid to turn it off if there's too much demand." People should be yelling at ERCOT for being an incompetent regulator that's letting the grid get away with too little supply (and that's what this article is sort of doing, except its anger is directed towards cryptocurrency mines, not ERCOT, so it's somewhat misplaced). And, for what it's worth, cryptocurrency is kind of bad at base load. It's not using any reactive power.
        friend_and_foe 3y ago
        Reactive power is by definition unused. A constant stream of demand that does not fluctuate and can be turned off at a moment's notice without any dire consequences, that's bad at base load? How so? These heat waves and extreme cold events are purportedly unprecedented, due to climate change. Should we be surprised when electricity infrastructure designed for normal times gets strained? I've been in countries with rolling power outages, I wouldn't call the Texas grid badly engineered. Considering it's a standalone grid I'd say it's got to be fantastically engineered to have the uptime that it has, I don't think the UK even has such a resilient system.
        jcranmer 3y ago
        > I don't think the UK even has such a resilient system. Tell that to someone from the UK, and they're likely to laugh in your face. The UK has never faced rolling power outages; Texas faced that just two years ago (although ERCOT appears to have had some issues with the "rolling" part). Furthermore, I don't think the UK has ever had to go voluntary load-shedding measures; Texas had to do that several times this past month, and last summer, etc. It's hard to say that the extreme cold event was uprecedented when the exact same thing happened in Texas but a decade prior, complete with learnings that would have prevented the breakdown of the grid (i.e., rolling blackouts) had they been implemented. And the extreme heat wave has been impacting, well, more or less the entire world, and most of the power systems haven't even had to suggest that customers use less power. This is stuff that is eminently predictable, and in most of the world, electricity capacity is planned under the basis of extreme demand scenarios, not normal demand scenarios. If Texas's grid is designed merely for normal demand, then that is a surprise that should have Texans up in arms about the incompetence of their electricity regulator.
  - FactKnower69 3y ago
    remember, everyone: markets are the most efficient way to allocate resources :)
  - Aloha 3y ago
    It also pushes the market rate below the marginal cost for thermal generation.
- friend_and_foe 3y ago
  So let me help you understand how this works. A grid needs a base load to function properly. Energy producers can't just scale up or down production whenever demand changes. When people talk about "solar and wind can't supply the entire grid we need batteries to store it" this is what they're talking about. Some amount of electricity must constantly be produced to keep the grid functioning. Nobody buys this energy and the cost of it is rolled into the energy people do buy. So what if someone out there needed a lot of energy all the time? Well, you can sell that constantly produced energy to them, and whatever they pay for it customers don't have to pay for it. You can decrease prices, waste less energy (from a producer perspective; if you think bitcoin mining is a waste of energy it is wasted either way, but to the producer it is sold) and everyone wins. But, in times of peak load, when that energy is used and needed, you need the newfound customer of it to be able to not need it on short notice. So you need a customer who isn't going to freeze to death without it. This is where bitcoin mining comes in. They negotiate a deal for the base load energy, buy it, then, when the grid needs them to shut down, sell it back. This is all done at pre negotiated rates and the energy is sold as an option, which in this case means on the condition that they have to sell it back if the producer or grid maintainer or state or whoever needs to use it.
  - arcticbull 3y ago
    I understand how it works. They need a different mix of generation capacity, grid interconnections and storage. Ideally, they'd have adaptive load like EV chargers that slow or stop charging in response to grid asks. This is just an abject planning failure incentivized by crypto waste, and most importantly what it isn't is a "virtual power plant." If the actual power plants turned off, would the virtual power plant be able to supply electricity? > Energy producers can't just scale up or down production whenever demand changes. They can with storage, and with power plants that have variable generation capacity - so not nuclear, but gas peaker plants, etc.

arcticbull 3y ago

What an absurd name for basically a big resistor generating heat you are paid to disconnect from the grid when it’s about to go up in flames. They need batteries not sudoku solver bots. Talk about doublespeak in this case, wow.

anonporridge 3y ago
If there is no buyer for excess solar/wind electricity, then it must curtail and earn less income. Less income means it takes longer to pay off initial capital costs and generate return. Slower investment return from solar and wind deployments means expansion of them will take longer. If wind and solar takes longer to roll out at full scale for financial reasons, then our goals towards fossil fuel reductions takes longer. Therefore, if you can find a buyer who will suck up any excess solar and wind and pay them, we eliminate fossil fuels quicker.
- jcranmer 3y ago
  > If there is no buyer for excess solar/wind electricity, then it must curtail and earn less income. Solar and wind have the lowest marginal costs of production, which means they'll win out on the wholesale power markets. Furthermore, Texas is a state with increasing population growth and increasing energy needs (hotter planet means more A/C, after all), and has regularly been setting all-time highs on daily energy consumption. So there'll always be a buyer for the excess electricity.
  - friend_and_foe 3y ago
    You should read about base load energy production to understand what's going on here.
    - jcranmer 3y ago
      Look, this is Texas. It's not about base load energy production. This is a system that--several times this past year--is running at demand around 100% of supply capacity. That shouldn't happen; it's just bad industrial engineering. The cryptocurrency mines aren't adding base load here. It's adding more load on a system that's already taxed to its limits, and justifying it as a good thing because "oh, we can get paid to turn it off if there's too much demand." People should be yelling at ERCOT for being an incompetent regulator that's letting the grid get away with too little supply (and that's what this article is sort of doing, except its anger is directed towards cryptocurrency mines, not ERCOT, so it's somewhat misplaced). And, for what it's worth, cryptocurrency is kind of bad at base load. It's not using any reactive power.
      - friend_and_foe 3y ago
        Reactive power is by definition unused. A constant stream of demand that does not fluctuate and can be turned off at a moment's notice without any dire consequences, that's bad at base load? How so? These heat waves and extreme cold events are purportedly unprecedented, due to climate change. Should we be surprised when electricity infrastructure designed for normal times gets strained? I've been in countries with rolling power outages, I wouldn't call the Texas grid badly engineered. Considering it's a standalone grid I'd say it's got to be fantastically engineered to have the uptime that it has, I don't think the UK even has such a resilient system.
        jcranmer 3y ago
        > I don't think the UK even has such a resilient system. Tell that to someone from the UK, and they're likely to laugh in your face. The UK has never faced rolling power outages; Texas faced that just two years ago (although ERCOT appears to have had some issues with the "rolling" part). Furthermore, I don't think the UK has ever had to go voluntary load-shedding measures; Texas had to do that several times this past month, and last summer, etc. It's hard to say that the extreme cold event was uprecedented when the exact same thing happened in Texas but a decade prior, complete with learnings that would have prevented the breakdown of the grid (i.e., rolling blackouts) had they been implemented. And the extreme heat wave has been impacting, well, more or less the entire world, and most of the power systems haven't even had to suggest that customers use less power. This is stuff that is eminently predictable, and in most of the world, electricity capacity is planned under the basis of extreme demand scenarios, not normal demand scenarios. If Texas's grid is designed merely for normal demand, then that is a surprise that should have Texans up in arms about the incompetence of their electricity regulator.
- FactKnower69 3y ago
  remember, everyone: markets are the most efficient way to allocate resources :)
- Aloha 3y ago
  It also pushes the market rate below the marginal cost for thermal generation.
friend_and_foe 3y ago
So let me help you understand how this works. A grid needs a base load to function properly. Energy producers can't just scale up or down production whenever demand changes. When people talk about "solar and wind can't supply the entire grid we need batteries to store it" this is what they're talking about. Some amount of electricity must constantly be produced to keep the grid functioning. Nobody buys this energy and the cost of it is rolled into the energy people do buy. So what if someone out there needed a lot of energy all the time? Well, you can sell that constantly produced energy to them, and whatever they pay for it customers don't have to pay for it. You can decrease prices, waste less energy (from a producer perspective; if you think bitcoin mining is a waste of energy it is wasted either way, but to the producer it is sold) and everyone wins. But, in times of peak load, when that energy is used and needed, you need the newfound customer of it to be able to not need it on short notice. So you need a customer who isn't going to freeze to death without it. This is where bitcoin mining comes in. They negotiate a deal for the base load energy, buy it, then, when the grid needs them to shut down, sell it back. This is all done at pre negotiated rates and the energy is sold as an option, which in this case means on the condition that they have to sell it back if the producer or grid maintainer or state or whoever needs to use it.
- arcticbull 3y ago
  I understand how it works. They need a different mix of generation capacity, grid interconnections and storage. Ideally, they'd have adaptive load like EV chargers that slow or stop charging in response to grid asks. This is just an abject planning failure incentivized by crypto waste, and most importantly what it isn't is a "virtual power plant." If the actual power plants turned off, would the virtual power plant be able to supply electricity? > Energy producers can't just scale up or down production whenever demand changes. They can with storage, and with power plants that have variable generation capacity - so not nuclear, but gas peaker plants, etc.