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Meanwhile in Germany, the price for Solar power has literally plummeted below zero. There is vast oversupply during peak times and no storage capacity. On scal

Meanwhile in Germany, the price for Solar power has literally plummeted below zero. There is vast oversupply during peak times and no storage capacity. On scale, free energy supply is pointless when it occurs during times when nobody can use it. It's all about storage capacities.

JumpCrisscross 2y ago
> free energy supply is pointless when it occurs during times when nobody can use it It’s useless if nobody uses it. The question is why the arbitrage, by way of storage or intermittent industry, isn’t happening.
- fisf 2y ago
  Because if you factor in the cost of storage there might not be arbitrage.
  - hectormalot 2y ago
    …yet. Negative energy prices are a relatively new phenomenon, and it attracts attention because of its counterintuitive nature (I can get paid to use electricity?!?). Yet, it doesn’t happen that often. If I look at the Dutch market, this mostly happens on sunny+windy Sundays. I think 2 things are happening that will make arbitrage feasible: 1. As solar production capacity increases, so will opportunities for arbitrage 2. As battery costs keep going down (capacity learning curve), so will the investment to do arbitrage. At some point the curves for (1) and (2) will cross convincingly enough that investing in storage is just good business, and people will invest. If it’s anything like solar (home batteries), adoption might actually go very quickly because decision making would be decentralized, small investments, and without permits.
    - snapplebobapple 2y ago
      Your number 1 relies on producers not changing their behaviour, which is what negative pricingis designed to accomplish. It also relies on people so poorly taking advatange that the arb doesny dissapear. your 2 will probably happen at some point but its been forecast within the minimum likely range for arbitrage opportunities to cause widespread capital allo.ation to take advantage of the arbitrage that it has stunted investment in your 1. in short its questionable that arbitrage will sort this any time soon (although it will likely be accounted for in new projects that were happening anyway. That˙makes it something that will move the needle over decades, not years) sorting this soon needs another order of magnitude or two improvement in total cost of storage, ideally in a cheaper and less environmentally harmful chemistry that can also take advantage of the installed battery production capacity, or rethinking to make environmentally friendly demand generation (ie nuclear) cheaper and faster to deploy to provide the power when the solar can't.
- pjc50 2y ago
  The capital cost of arbitrage tends to be a lot. It's only economically viable if there's regularly a lot of free electricity.
  - ZeroGravitas 2y ago
    The electricity doesn't need to be free. We've had range of interesting business models and regulations taking advantage of off-peak energy for decades. Anyone looking to take business advantage of solar should be looking at predictably below average prices for most of the day, rather than only when it hits zero. edit to add: An example, yesterday on CAISO in California they broke records for solar generated, and battery discharge, but the price never hit 0 and batteries were charging from 6am to 6pm and making good money meeting evening demand: https://www.gridstatus.io/live/caiso?date=2024-06-20 https://www.gridstatus.io/live/caiso?date=2024-06-20 And it's possible to argue that the price didn't hit zero in part because of the batteries knowing they could sell it for more later.

JumpCrisscross 2y ago

> free energy supply is pointless when it occurs during times when nobody can use it It’s useless if nobody uses it. The question is why the arbitrage, by way of storage or intermittent industry, isn’t happening.

fisf 2y ago
Because if you factor in the cost of storage there might not be arbitrage.
- hectormalot 2y ago
  …yet. Negative energy prices are a relatively new phenomenon, and it attracts attention because of its counterintuitive nature (I can get paid to use electricity?!?). Yet, it doesn’t happen that often. If I look at the Dutch market, this mostly happens on sunny+windy Sundays. I think 2 things are happening that will make arbitrage feasible: 1. As solar production capacity increases, so will opportunities for arbitrage 2. As battery costs keep going down (capacity learning curve), so will the investment to do arbitrage. At some point the curves for (1) and (2) will cross convincingly enough that investing in storage is just good business, and people will invest. If it’s anything like solar (home batteries), adoption might actually go very quickly because decision making would be decentralized, small investments, and without permits.
  - snapplebobapple 2y ago
    Your number 1 relies on producers not changing their behaviour, which is what negative pricingis designed to accomplish. It also relies on people so poorly taking advatange that the arb doesny dissapear. your 2 will probably happen at some point but its been forecast within the minimum likely range for arbitrage opportunities to cause widespread capital allo.ation to take advantage of the arbitrage that it has stunted investment in your 1. in short its questionable that arbitrage will sort this any time soon (although it will likely be accounted for in new projects that were happening anyway. That˙makes it something that will move the needle over decades, not years) sorting this soon needs another order of magnitude or two improvement in total cost of storage, ideally in a cheaper and less environmentally harmful chemistry that can also take advantage of the installed battery production capacity, or rethinking to make environmentally friendly demand generation (ie nuclear) cheaper and faster to deploy to provide the power when the solar can't.
pjc50 2y ago
The capital cost of arbitrage tends to be a lot. It's only economically viable if there's regularly a lot of free electricity.
- ZeroGravitas 2y ago
  The electricity doesn't need to be free. We've had range of interesting business models and regulations taking advantage of off-peak energy for decades. Anyone looking to take business advantage of solar should be looking at predictably below average prices for most of the day, rather than only when it hits zero. edit to add: An example, yesterday on CAISO in California they broke records for solar generated, and battery discharge, but the price never hit 0 and batteries were charging from 6am to 6pm and making good money meeting evening demand: https://www.gridstatus.io/live/caiso?date=2024-06-20 https://www.gridstatus.io/live/caiso?date=2024-06-20 And it's possible to argue that the price didn't hit zero in part because of the batteries knowing they could sell it for more later.