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Not sure if it's discussed in the paper but apparently in Australia there have already been recorded instances of batteries charging with negative price electri

Not sure if it's discussed in the paper but apparently in Australia there have already been recorded instances of batteries charging with negative price electricity and then selling back that electricity at a still negative but closer to zero price and so profiting. When I first heard it, it seemed wild that they couldn't hold on for the price to go back above zero, but I guess if we're talking high frequency trading it makes more sense. They might have bought and sold many times while the price is different levels of negative before switching to charging up in preparation for the later price rises. And the round trip inefficiency helps too.

petertodd 1y ago
That's not as ridiculous as it sounds! As you know, negative electricity prices mean that someone is willing to pay you to dispose of electricity they need to generate for some reason. For example, a conventional steam-turbine-based electricity plant might prefer to just keep running for a brief period of time when demand is low, rather than subject their equipment to a power cycle, which increases their maintenance costs. There's other, dumber, examples based on stupid contracts and badly designed solar... but this example is a reasonable one that exists for good engineering reasons. The battery provider in this circumstance is profiting from their ability to accept power when demand to dispose of electricity is particularly high. When that need goes down, they can reasonably profit by dumping that energy on someone else who is also able to dispose of the electricity. But at a lower cost. E.g. imagine an big industrial refrigerated storage facility that can consume some excess energy by supercooling their refrigerators. But they can't consume unlimited excess energy, because at some point their warehouse just gets too cold, and they don't have unlimited refrigeration capacity anyway. So in this simplified example, the battery storage service is getting paid a lot of money to quickly absorb a lot of energy, which they then dump more slowly to the refrigerated warehouse (and similar providers) as the surplus diminishes, in anticipation of another surplus in the near future.
- kurthr 1y ago
  If it was so profitable, why wouldn't the electricity utility do it themselves? Certainly, they have the scale, infrastructure, and pricing power to do it. Oh, that's right. This is supposed to be wealth transfer.
  - schmidtleonard 1y ago
    Someone at the generation facility ran the numbers and found that the grid was able to dispose of excess energy for peanuts but installing and maintaining a dedicated electronic load cost more than peanuts. I'd recommend digging elsewhere for conspiracy bait. This is a mild curiosity at best.
    - hinkley 1y ago
      This is why we don’t move data center load to the coldest available data center to reduce the AC power fraction of the cost. The cost of electricity is a significant fraction of the overall cost but not high enough to make up for stranded assets. Computers not running during their best years is expensive. But I’m not sure that’s entirely correct, and maybe it’s time to revisit this. Any system that is selling responsiveness as part of their service has to keep a certain amount of equipment sitting idle. That’s just how queuing theory works. So while you cannot move all server load to the coldest available zone, we should still be able to run that center near capacity and use the hottest one for all reserve capacity. Power plants also have to deal with fines for exceeding emissions limits, but I suspect the problem here is that Bayesian analysis tells them that if a plant has to kick on early for some reason (early school release day, or another plant exceeded a maintenance window), it will still be needed for sure an hour from now, so it’s better to leave it running for 45 minutes doing nothing than to cycle it.
    - petertodd 1y ago
      > This is a mild curiosity at best. Exactly. There are genuine economic/engineering reasons for negative prices to occasionally exist. But in a well-designed, well-run, grid price will be negative only a small minority of the time. It just doesn't make sense to install a bunch of expensive equipment to provide this service when sufficient capacity exists from "happy accidents" like spare battery storage. In the long run, better managed solar and wind should make negative prices a fairly rare event.
- eru 1y ago
  > That's not as ridiculous as it sounds! I'm not sure: why doesn't someone 'just' put up a few resistive heaters and fans to benefit from negative prices?
  - Turskarama 1y ago
    Because it doesn't happen often enough to be worthwhile, you're better off just building a battery and being able to make profit every day.
  - ssl-3 1y ago
    If one is incentivized (eg, paid) to burn power, then sure: One can burn power and reap the incentive. It can happen in any market. The producer has so much abundance of a thing, for whatever reason they do, that they're willing to pay others to get rid of it for them. It can even happen productively: "Hey, they're paying us to run the heat! Turn the glass kiln on so we can get a head start on tomorrow." Or "Hey, they're paying us to charge our batteries! Let's charge them!" It can also be "Hey, they're paying us to run resistive heaters! Turn on the artificial sun!" Whatever it is: If the demand satisfies the supply, then the supplier is satiated. And then the price can go back to something more-profitable for that supplier.
    - gus_massa 1y ago
      > It can also be "Hey, they're paying us to run resistive heaters! Turn on the artificial sun!" It may be difficult to dump all the heat at scale. You probably need a huge cooler with fans to get active air flow. Or a water tower (that requires water) (There are regulation about extracting water from a river and returning it too hot). Is it possible to build one of this heat dumping facilities in a zone where there is permanent snow? (Ignoring environmental and moral concerns.) PS: Seriously, heating a swimming pool may be a nice application.
      - eru 1y ago
        > It may be difficult to dump all the heat at scale. You probably need a huge cooler with fans to get active air flow. Or a water tower (that requires water) (There are regulation about extracting water from a river and returning it too hot). You could probably just boil off your water, instead of returning any? It would be funny, to use the steam to generate electricity.
- K0balt 1y ago
  Oxygen capture and liquid nitrogen seems like a great use of negative prices.
foobarian 1y ago
> and then selling back that electricity at a still negative but closer to zero price and so profiting. How is it not better to discharge the batteries instead? I guess if you don't have that hardware option integrated into the platform maybe, but otherwise...

petertodd 1y ago

That's not as ridiculous as it sounds! As you know, negative electricity prices mean that someone is willing to pay you to dispose of electricity they need to generate for some reason. For example, a conventional steam-turbine-based electricity plant might prefer to just keep running for a brief period of time when demand is low, rather than subject their equipment to a power cycle, which increases their maintenance costs. There's other, dumber, examples based on stupid contracts and badly designed solar... but this example is a reasonable one that exists for good engineering reasons. The battery provider in this circumstance is profiting from their ability to accept power when demand to dispose of electricity is particularly high. When that need goes down, they can reasonably profit by dumping that energy on someone else who is also able to dispose of the electricity. But at a lower cost. E.g. imagine an big industrial refrigerated storage facility that can consume some excess energy by supercooling their refrigerators. But they can't consume unlimited excess energy, because at some point their warehouse just gets too cold, and they don't have unlimited refrigeration capacity anyway. So in this simplified example, the battery storage service is getting paid a lot of money to quickly absorb a lot of energy, which they then dump more slowly to the refrigerated warehouse (and similar providers) as the surplus diminishes, in anticipation of another surplus in the near future.

kurthr 1y ago
If it was so profitable, why wouldn't the electricity utility do it themselves? Certainly, they have the scale, infrastructure, and pricing power to do it. Oh, that's right. This is supposed to be wealth transfer.
- schmidtleonard 1y ago
  Someone at the generation facility ran the numbers and found that the grid was able to dispose of excess energy for peanuts but installing and maintaining a dedicated electronic load cost more than peanuts. I'd recommend digging elsewhere for conspiracy bait. This is a mild curiosity at best.
  - hinkley 1y ago
    This is why we don’t move data center load to the coldest available data center to reduce the AC power fraction of the cost. The cost of electricity is a significant fraction of the overall cost but not high enough to make up for stranded assets. Computers not running during their best years is expensive. But I’m not sure that’s entirely correct, and maybe it’s time to revisit this. Any system that is selling responsiveness as part of their service has to keep a certain amount of equipment sitting idle. That’s just how queuing theory works. So while you cannot move all server load to the coldest available zone, we should still be able to run that center near capacity and use the hottest one for all reserve capacity. Power plants also have to deal with fines for exceeding emissions limits, but I suspect the problem here is that Bayesian analysis tells them that if a plant has to kick on early for some reason (early school release day, or another plant exceeded a maintenance window), it will still be needed for sure an hour from now, so it’s better to leave it running for 45 minutes doing nothing than to cycle it.
  - petertodd 1y ago
    > This is a mild curiosity at best. Exactly. There are genuine economic/engineering reasons for negative prices to occasionally exist. But in a well-designed, well-run, grid price will be negative only a small minority of the time. It just doesn't make sense to install a bunch of expensive equipment to provide this service when sufficient capacity exists from "happy accidents" like spare battery storage. In the long run, better managed solar and wind should make negative prices a fairly rare event.
eru 1y ago
> That's not as ridiculous as it sounds! I'm not sure: why doesn't someone 'just' put up a few resistive heaters and fans to benefit from negative prices?
- Turskarama 1y ago
  Because it doesn't happen often enough to be worthwhile, you're better off just building a battery and being able to make profit every day.
- ssl-3 1y ago
  If one is incentivized (eg, paid) to burn power, then sure: One can burn power and reap the incentive. It can happen in any market. The producer has so much abundance of a thing, for whatever reason they do, that they're willing to pay others to get rid of it for them. It can even happen productively: "Hey, they're paying us to run the heat! Turn the glass kiln on so we can get a head start on tomorrow." Or "Hey, they're paying us to charge our batteries! Let's charge them!" It can also be "Hey, they're paying us to run resistive heaters! Turn on the artificial sun!" Whatever it is: If the demand satisfies the supply, then the supplier is satiated. And then the price can go back to something more-profitable for that supplier.
  - gus_massa 1y ago
    > It can also be "Hey, they're paying us to run resistive heaters! Turn on the artificial sun!" It may be difficult to dump all the heat at scale. You probably need a huge cooler with fans to get active air flow. Or a water tower (that requires water) (There are regulation about extracting water from a river and returning it too hot). Is it possible to build one of this heat dumping facilities in a zone where there is permanent snow? (Ignoring environmental and moral concerns.) PS: Seriously, heating a swimming pool may be a nice application.
    - eru 1y ago
      > It may be difficult to dump all the heat at scale. You probably need a huge cooler with fans to get active air flow. Or a water tower (that requires water) (There are regulation about extracting water from a river and returning it too hot). You could probably just boil off your water, instead of returning any? It would be funny, to use the steam to generate electricity.
K0balt 1y ago
Oxygen capture and liquid nitrogen seems like a great use of negative prices.

foobarian 1y ago

> and then selling back that electricity at a still negative but closer to zero price and so profiting. How is it not better to discharge the batteries instead? I guess if you don't have that hardware option integrated into the platform maybe, but otherwise...