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Could you just intentionally waste a lot of energy when the price is negative to make a lot of money? Is there a limit on how much you can use? Of course you s

by n2d4 3y ago

Could you just intentionally waste a lot of energy when the price is negative to make a lot of money? Is there a limit on how much you can use? Of course you shouldn't do that, but I wonder how their business model looks like. I assume the negative price comes from subsidies, and those probably are limited? edit: with "wasting", I mean literal wasting, basically discharging the grid without using the energy for anything (say, by putting a heater outside)

xboxnolifes 3y ago
Negative price can come from too much grid load which must be removed. This can be financially recovered through the non-negative prices.
cmrx64 3y ago
The negative rates phenomenon is fascinating. Little to do with subsidies, lots to do with load balancing / matching generation to demand. Hugenormous generation capacity tends to move slowly (just for the mental model, imagine a steam turbine that can only generate less power by _waiting to cool down_). In order to maintain stable grid frequency, the market steps in with some behavioral adjustment via pricing. There’s no reason you _shouldn’t_ do the behavior you describe: the more power you can sink during negative pricing, the better the efficiency of the grid! You’d rather any kind of productive use.
- n2d4 3y ago
  So what you're saying is that there is no free/cheap way to waste/get rid of energy? If there were, surely the energy companies would do that instead of paying consumers to use it?
  - cmrx64 3y ago
    Ultimately you turn it back to heat, but then you need to put the heat somewhere. One possibility is to just dump it into the earth via a grounding system. You don’t really want to be doing that except in emergency: the soil resistivity isn’t well controlled and in general it’s an extremely crude method. This is the boundary of my ignorance, though: I don’t know what the actual equilibrium system dynamics are. But I believe that using the market to induce demand is ~always going to be more (globally) efficient than curtailing generation or providing grid-scale radiators: the economy has almost certainly got a more productive use for marginally cheaper power than simply returning it to heat. In this margin, only the transmission costs matter.
KaiserPro 3y ago
I'm limited to about 12kw of power draw, so I could make maybe 50pence an hour, on a really really windy day. As an industrial consumer, you probably could chow down that power, but it'll affect the market price, and probably cost millions in connection/line rental fees. The price is a function of the spot price, so its an indirect function of the way electricity prices are set. As a producer you get a guaranteed minimum price per kwh. some magic of contracts happen and the price paid is not always the price the producer gets.
ViewTrick1002 3y ago
Negative prices generally come from large thermal plants, usually nuclear or coal, bidding negative since their ramp times are too slow to lower their output for the negative period and then be able to increase it again for when prices are expected to become positive again. They are generally unfit for modern grids which require dispatchable energy, and is why "baseload" is an outdated term on the power generation side, while it of course still exists on the consumer side.
- n2d4 3y ago
  In that case, is my assumption that it's easy to waste energy wrong? I thought you could just shortcircuit the grid (or well, have a little bit of resistance, just not too much, and some way to transfer the heat), that'll just get rid of the energy. Sure, it's a waste, and dangerous, but cheaper than paying for someone else to get rid of it? If that's not the case, what is the most efficient way to waste energy? Disclaimer: I don't know anything about the energy grid.
  - BenjiWiebe 3y ago
    Some way to transfer the heat is the hard part here. If you are trying to sink megawatts of power that's a lot of heat.
- 7thaccount 3y ago
  Not too many big thermal plants are bidding that way. The ones that aren't dispatchable at all don't actually offer into the market as a price maker. Instead, they just act as price takers and likely make up for it by being part of a vertically integrated utility playing in the energy market - as in they can have any losses factored into rates. It is far far more common to have wind/solar offering in negative prices as they want to run at any cost to take advantage of the extremely lucrative subsidies. There is limited transmission available, so those various wind farms are competing against each other to just run. Also, you can have negative prices just due to congestion.
tentacleuno 3y ago
> Could you just intentionally waste a lot of energy when the price is negative to make a lot of money? That's pretty much what Octopus Agile is designed for. We turn on all the electric heaters on plunge pricing, which is a very welcome addition in a cold house.

by n2d4 3y ago

xboxnolifes 3y ago

Negative price can come from too much grid load which must be removed. This can be financially recovered through the non-negative prices.

cmrx64 3y ago

The negative rates phenomenon is fascinating. Little to do with subsidies, lots to do with load balancing / matching generation to demand. Hugenormous generation capacity tends to move slowly (just for the mental model, imagine a steam turbine that can only generate less power by _waiting to cool down_). In order to maintain stable grid frequency, the market steps in with some behavioral adjustment via pricing. There’s no reason you _shouldn’t_ do the behavior you describe: the more power you can sink during negative pricing, the better the efficiency of the grid! You’d rather any kind of productive use.

n2d4 3y ago
So what you're saying is that there is no free/cheap way to waste/get rid of energy? If there were, surely the energy companies would do that instead of paying consumers to use it?
- cmrx64 3y ago
  Ultimately you turn it back to heat, but then you need to put the heat somewhere. One possibility is to just dump it into the earth via a grounding system. You don’t really want to be doing that except in emergency: the soil resistivity isn’t well controlled and in general it’s an extremely crude method. This is the boundary of my ignorance, though: I don’t know what the actual equilibrium system dynamics are. But I believe that using the market to induce demand is ~always going to be more (globally) efficient than curtailing generation or providing grid-scale radiators: the economy has almost certainly got a more productive use for marginally cheaper power than simply returning it to heat. In this margin, only the transmission costs matter.

KaiserPro 3y ago

I'm limited to about 12kw of power draw, so I could make maybe 50pence an hour, on a really really windy day. As an industrial consumer, you probably could chow down that power, but it'll affect the market price, and probably cost millions in connection/line rental fees. The price is a function of the spot price, so its an indirect function of the way electricity prices are set. As a producer you get a guaranteed minimum price per kwh. some magic of contracts happen and the price paid is not always the price the producer gets.

ViewTrick1002 3y ago

Negative prices generally come from large thermal plants, usually nuclear or coal, bidding negative since their ramp times are too slow to lower their output for the negative period and then be able to increase it again for when prices are expected to become positive again. They are generally unfit for modern grids which require dispatchable energy, and is why "baseload" is an outdated term on the power generation side, while it of course still exists on the consumer side.

n2d4 3y ago
In that case, is my assumption that it's easy to waste energy wrong? I thought you could just shortcircuit the grid (or well, have a little bit of resistance, just not too much, and some way to transfer the heat), that'll just get rid of the energy. Sure, it's a waste, and dangerous, but cheaper than paying for someone else to get rid of it? If that's not the case, what is the most efficient way to waste energy? Disclaimer: I don't know anything about the energy grid.
- BenjiWiebe 3y ago
  Some way to transfer the heat is the hard part here. If you are trying to sink megawatts of power that's a lot of heat.
7thaccount 3y ago
Not too many big thermal plants are bidding that way. The ones that aren't dispatchable at all don't actually offer into the market as a price maker. Instead, they just act as price takers and likely make up for it by being part of a vertically integrated utility playing in the energy market - as in they can have any losses factored into rates. It is far far more common to have wind/solar offering in negative prices as they want to run at any cost to take advantage of the extremely lucrative subsidies. There is limited transmission available, so those various wind farms are competing against each other to just run. Also, you can have negative prices just due to congestion.

tentacleuno 3y ago

> Could you just intentionally waste a lot of energy when the price is negative to make a lot of money? That's pretty much what Octopus Agile is designed for. We turn on all the electric heaters on plunge pricing, which is a very welcome addition in a cold house.