Solar Power In California

[Loren Pechtel]

No, Bilby it's not "harming the grid". It's just that producers have incentives to sell it for a negative price because of the way the market has been set up.

If you are getting a $20/MWh subsidy outside the pool and have a $10 cost to produce a MWh, you might bid as low as -$10 because you'd be happy to run at that price. It the pool clears at $-5, you still make money producing (-5 price + -10 costs + $20 subsidy = +$5 total margin)

The problem is that the grid operators are required to buy it even when they have no use for it.

 

[bilby]

This isn't about cheap power. Cheap power is a good thing.

This is about power that is worth less than nothing. The only reason power can have a negative price is because it's harming the grid, and the grid operator demands that producers pay to add their damaging excess power to his oversaturated grid, in the hope that this will get some production taken offline.

No, Bilby it's not "harming the grid". It's just that producers have incentives to sell it for a negative price because of the way the market has been set up.

If you are getting a $20/MWh subsidy outside the pool and have a $10 cost to produce a MWh, you might bid as low as -$10 because you'd be happy to run at that price. It the pool clears at $-5, you still make money producing (-5 price + -10 costs + $20 subsidy = +$5 total margin)

Actually, it's both.

Wind and solar power are asynchronous, and excess power supplied to the grid tends to rotate the phase angle, particularly if it is from asynchronous sources. In extreme circumstances, this can cause the entire grid to fail - as happened recently in South Australia, where wind power is a very large fraction of the state's generating capacity, and they rely on two interconnected from Victoria to supply synchronisation services.

Without these interconnectors (or another source of synchronous power), any disruption is unrecoverable and leads to progressive blackouts as each section of the grid shuts down to protect itself.

 

[Elixir]

Well, the obvious solution that I don't hear anyone talking about, is to move toward complete de-centralization of power generation.
Short of that, I'm a fan of nuclear for load-balancing.

 

[dismal]

No, Bilby it's not "harming the grid". It's just that producers have incentives to sell it for a negative price because of the way the market has been set up.

If you are getting a $20/MWh subsidy outside the pool and have a $10 cost to produce a MWh, you might bid as low as -$10 because you'd be happy to run at that price. It the pool clears at $-5, you still make money producing (-5 price + -10 costs + $20 subsidy = +$5 total margin)

The problem is that the grid operators are required to buy it even when they have no use for it.

They balance the grid instantaneously. They generally buy exactly the power they need. If the market clears at a negative price it's because enough sellers are willing to offer power at a negative price to balance the grid.

 

[TV and credit cards]

The problem is that the grid operators are required to buy it even when they have no use for it.

They balance the grid instantaneously. They generally buy exactly the power they need. If the market clears at a negative price it's because enough sellers are willing to offer power at a negative price to balance the grid.

And they buy and sell across the country. They've got their own little commodities market going on.

 

[Opoponax]

Well, the obvious solution that I don't hear anyone talking about, is to move toward complete de-centralization of power generation.
Short of that, I'm a fan of nuclear for load-balancing.

Same here. Yes, there are dangers, but to see the scars strip mining has left on the planet along with the countless deaths of coal miners, and others from the pollution coal causes, it's an acceptable tradeoff until a better solution can be found.

 

[Loren Pechtel]

Well, the obvious solution that I don't hear anyone talking about, is to move toward complete de-centralization of power generation.
Short of that, I'm a fan of nuclear for load-balancing.

Unfortunately, nuclear stinks for load balancing. The throttle on a nuke plant is very slow, when the sun goes behind a cloud the nuke plant can't just throttle up. Quick response power is usually natural gas because it has a fast throttle.

 

[Loren Pechtel]

The problem is that the grid operators are required to buy it even when they have no use for it.

They balance the grid instantaneously. They generally buy exactly the power they need. If the market clears at a negative price it's because enough sellers are willing to offer power at a negative price to balance the grid.

And you think it makes sense for generators to have to pay to take the power off their hands? When the grid saturates it should be the solar or wind that drops off as both are easy to idle, unlike the big boilers.

 

[T.G.G. Moogly]

Why has no one mentioned dilithium crystals? They work on the Enterprise.

 

[Tigers!]

Why has no one mentioned dilithium crystals? They work on the Enterprise.

Can we park the Enterprise in our orbit?

 

[Crowcause]

Two points for consideration -
A. Never underestimate how quickly technological innovation can change the situation - https://news.utexas.edu/2017/02/28/goodenough-introduces-new-battery-technology

B. From my understanding, the biggest expense of obtaining fresh water by desalination of sea water is not the equipment, but the energy to run it. I could be wrong, but I believe fresh water is going to be a crisis much faster than realized by most, not only from climate change but also from fracking and other pollution knocking out present sources. A considerable increase of energy directed to this will need to be factored in planning.

 

[bilby]

Two points for consideration -
A. Never underestimate how quickly technological innovation can change the situation - https://news.utexas.edu/2017/02/28/goodenough-introduces-new-battery-technology

B. From my understanding, the biggest expense of obtaining fresh water by desalination of sea water is not the equipment, but the energy to run it. I could be wrong, but I believe fresh water is going to be a crisis much faster than realized by most, not only from climate change but also from fracking and other pollution knocking out present sources. A considerable increase of energy directed to this will need to be factored in planning.

For sure cheap energy makes reverse osmosis desalination cheap. That's why nuclear submarines are range limited only by their ability to carry food - they have a nuclear power plant, so they can make as much fresh water as they want.

Battery technology that is both cheap enough and high enough capacity to be useful at the grid scale is still a very, very long way off. You might as well wait for controlled, cheap, commercial scale fusion power as wait for inexpensive grid-scale batteries. And if they ever emerge, there's no reasonable expectation that they won't require very dirty technology to manufacture (which is also a problem for solar PV panels).

 

[dismal]

They balance the grid instantaneously. They generally buy exactly the power they need. If the market clears at a negative price it's because enough sellers are willing to offer power at a negative price to balance the grid.

And you think it makes sense for generators to have to pay to take the power off their hands? When the grid saturates it should be the solar or wind that drops off as both are easy to idle, unlike the big boilers.

You don't seem to understand how it works. With some simplification: Let's say a given grid has a load of 20,000 MWh at the moment. They will acquire exactly 20,000 MWh of power from generators to balance that load at that moment. Not more, not less.

If they are operating a semblance of a wholesale market generators bid the price at which they are willing to run. The lowest 20,000 MW of bidders get selected to run that hour. If a solar guy bids $50 and a gas guy bids $30 they will pick the gas guy. But the solar guy is getting a $20-something tax credit and has no fuel, so he won't bid $50. He will bid something like $-18. The gas guy needs to cover his fuel, so he will never bid less than the cost of his fuel, which is a function of his gas price and his heat rate (aka his efficiency in converting gas to power.)

When power demand is low enough and the wind is blowing, the negative bidders from wind and solar (and plants that can't easily shut down or have entered into hedges, etc) can clear the market. But they are providing the exact amount of power that is needed. On high demand hours, the wholesale price needs to rise enough to get the low efficiency, high fuel cost gas generator to run.

 

[Loren Pechtel]

Two points for consideration -
A. Never underestimate how quickly technological innovation can change the situation - https://news.utexas.edu/2017/02/28/goodenough-introduces-new-battery-technology

B. From my understanding, the biggest expense of obtaining fresh water by desalination of sea water is not the equipment, but the energy to run it. I could be wrong, but I believe fresh water is going to be a crisis much faster than realized by most, not only from climate change but also from fracking and other pollution knocking out present sources. A considerable increase of energy directed to this will need to be factored in planning.

You're definitely right about the cost to run it--that's the big issue with desalinization.

I do not believe it will be a crisis, though, merely a problem. The thing is desalinization technology is available and doesn't require any huge plants, thus it can be deployed without insane lead times.

Furthermore, desalinization is an ideal use for solar power:

1) The very places that need it are almost all places with lots of sun.

2) Desalinization plants can perfectly well run part time. The intermittent nature of solar is not a problem for them.

Thus I see the end result being a lot of solar powered desalinization plants. The price of water will go up, it will not be catastrophic.


Where there could be great problems is in third world areas nailed by climate change that disrupts their water supply.

 

[Loren Pechtel]

And you think it makes sense for generators to have to pay to take the power off their hands? When the grid saturates it should be the solar or wind that drops off as both are easy to idle, unlike the big boilers.

You don't seem to understand how it works. With some simplification: Let's say a given grid has a load of 20,000 MWh at the moment. They will acquire exactly 20,000 MWh of power from generators to balance that load at that moment. Not more, not less.

If they are operating a semblance of a wholesale market generators bid the price at which they are willing to run. The lowest 20,000 MW of bidders get selected to run that hour. If a solar guy bids $50 and a gas guy bids $30 they will pick the gas guy. But the solar guy is getting a $20-something tax credit and has no fuel, so he won't bid $50. He will bid something like $-18. The gas guy needs to cover his fuel, so he will never bid less than the cost of his fuel, which is a function of his gas price and his heat rate (aka his efficiency in converting gas to power.)

When power demand is low enough and the wind is blowing, the negative bidders from wind and solar (and plants that can't easily shut down or have entered into hedges, etc) can clear the market. But they are providing the exact amount of power that is needed. On high demand hours, the wholesale price needs to rise enough to get the low efficiency, high fuel cost gas generator to run.

Unfortunately, your logic is not right.

Some of those guys need to keep their systems running and thus will bid less than their cost as the power would otherwise go to waste.

 

[dismal]

You don't seem to understand how it works. With some simplification: Let's say a given grid has a load of 20,000 MWh at the moment. They will acquire exactly 20,000 MWh of power from generators to balance that load at that moment. Not more, not less.

If they are operating a semblance of a wholesale market generators bid the price at which they are willing to run. The lowest 20,000 MW of bidders get selected to run that hour. If a solar guy bids $50 and a gas guy bids $30 they will pick the gas guy. But the solar guy is getting a $20-something tax credit and has no fuel, so he won't bid $50. He will bid something like $-18. The gas guy needs to cover his fuel, so he will never bid less than the cost of his fuel, which is a function of his gas price and his heat rate (aka his efficiency in converting gas to power.)

When power demand is low enough and the wind is blowing, the negative bidders from wind and solar (and plants that can't easily shut down or have entered into hedges, etc) can clear the market. But they are providing the exact amount of power that is needed. On high demand hours, the wholesale price needs to rise enough to get the low efficiency, high fuel cost gas generator to run.

Unfortunately, your logic is not right.

Some of those guys need to keep their systems running and thus will bid less than their cost as the power would otherwise go to waste.

Hmm, you mean like I said in the bold above?

Note this does not generally apply to gas plants. They can (and do, every day) come up and down relatively quickly and inexpensively. Nukes and coal plants can't.

 

[bilby]

And you think it makes sense for generators to have to pay to take the power off their hands? When the grid saturates it should be the solar or wind that drops off as both are easy to idle, unlike the big boilers.

You don't seem to understand how it works. With some simplification: Let's say a given grid has a load of 20,000 MWh at the moment. They will acquire exactly 20,000 MWh of power from generators to balance that load at that moment. Not more, not less.

If they are operating a semblance of a wholesale market generators bid the price at which they are willing to run. The lowest 20,000 MW of bidders get selected to run that hour. If a solar guy bids $50 and a gas guy bids $30 they will pick the gas guy. But the solar guy is getting a $20-something tax credit and has no fuel, so he won't bid $50. He will bid something like $-18. The gas guy needs to cover his fuel, so he will never bid less than the cost of his fuel, which is a function of his gas price and his heat rate (aka his efficiency in converting gas to power.)

When power demand is low enough and the wind is blowing, the negative bidders from wind and solar (and plants that can't easily shut down or have entered into hedges, etc) can clear the market. But they are providing the exact amount of power that is needed. On high demand hours, the wholesale price needs to rise enough to get the low efficiency, high fuel cost gas generator to run.

Sure; But this isn't just about the electrical side of things; The issue is whether fuel is being burned. The coal plants are not dispatchable, so they continue burning coal, and generating steam, even though nobody is buying power from them right now - because otherwise they won't be able to provide power when it is required. The steam is simply diverted away from the turbines/generators, and wasted to the atmosphere.

They can't make electricity the grid doesn't want, because that would increase the frequency/voltage and potentially damage the grid (which is what can occur when distributed sources with limited control, such as domestic solar panels, become too widespread); but they still burn coal - it's just used to make steam that nobody wants.

Burning coal to make electricity is pretty bad from a CO₂ perspective; but burning coal to make no electricity is even worse.

 

[dismal]

You don't seem to understand how it works. With some simplification: Let's say a given grid has a load of 20,000 MWh at the moment. They will acquire exactly 20,000 MWh of power from generators to balance that load at that moment. Not more, not less.

If they are operating a semblance of a wholesale market generators bid the price at which they are willing to run. The lowest 20,000 MW of bidders get selected to run that hour. If a solar guy bids $50 and a gas guy bids $30 they will pick the gas guy. But the solar guy is getting a $20-something tax credit and has no fuel, so he won't bid $50. He will bid something like $-18. The gas guy needs to cover his fuel, so he will never bid less than the cost of his fuel, which is a function of his gas price and his heat rate (aka his efficiency in converting gas to power.)

When power demand is low enough and the wind is blowing, the negative bidders from wind and solar (and plants that can't easily shut down or have entered into hedges, etc) can clear the market. But they are providing the exact amount of power that is needed. On high demand hours, the wholesale price needs to rise enough to get the low efficiency, high fuel cost gas generator to run.

Sure; But this isn't just about the electrical side of things; The issue is whether fuel is being burned. The coal plants are not dispatchable, so they continue burning coal, and generating steam, even though nobody is buying power from them right now - because otherwise they won't be able to provide power when it is required. The steam is simply diverted away from the turbines/generators, and wasted to the atmosphere.

They can't make electricity the grid doesn't want, because that would increase the frequency/voltage and potentially damage the grid (which is what can occur when distributed sources with limited control, such as domestic solar panels, become too widespread); but they still burn coal - it's just used to make steam that nobody wants.

Burning coal to make electricity is pretty bad from a CO₂ perspective; but burning coal to make no electricity is even worse.

Hmm, not sure why people keep pointing things out to me that I already said. Did you miss where I said they balance the grid instantaneously?

I don't believe it is common to burn coal and not make electricity. Coal plants are baseload power. They have a relatively low fuel cost per mwh. If they were at significant risk of not being above the wholesale pool price they would hedge outside the pool. For example, they might swap the spot price for the expected average price for the month. Let's say that's $35. Then they bid -100 into the pool to be sure they run. If the pool closes at $5, the swap counterparty gets the $5 and the coal plant gets $35.

If they can't make money at $35 they may shut down for the month.

 

[bilby]

Sure; But this isn't just about the electrical side of things; The issue is whether fuel is being burned. The coal plants are not dispatchable, so they continue burning coal, and generating steam, even though nobody is buying power from them right now - because otherwise they won't be able to provide power when it is required. The steam is simply diverted away from the turbines/generators, and wasted to the atmosphere.

They can't make electricity the grid doesn't want, because that would increase the frequency/voltage and potentially damage the grid (which is what can occur when distributed sources with limited control, such as domestic solar panels, become too widespread); but they still burn coal - it's just used to make steam that nobody wants.

Burning coal to make electricity is pretty bad from a CO₂ perspective; but burning coal to make no electricity is even worse.

Hmm, not sure why people keep pointing things out to me that I already said.

Perhaps they agree with you? This may be a fairly novel experience for you, but sometimes people do actually agree with some of the things you say.

Did you miss where I said they balance the grid instantaneously?

I don't believe it is common to burn coal and not make electricity. Coal plants are baseload power. They have a relatively low fuel cost per mwh. If they were at significant risk of not being above the wholesale pool price they would hedge outside the pool. For example, they might swap the spot price for the expected average price for the month. Let's say that's $35. Then they bid -100 into the pool to be sure they run. If the pool closes at $5, the swap counterparty gets the $5 and the coal plant gets $35.

If they can't make money at $35 they may shut down for the month.

Indeed. And if, having shut down for the month, an unexpected run of calm, cloudy weather means that the wind and solar power generated is far below the level anticipated, this may result in blackouts*.










*Please note, this is not a contradiction of anything you said, nor is it intended to be.

 

[Loren Pechtel]

Unfortunately, your logic is not right.

Some of those guys need to keep their systems running and thus will bid less than their cost as the power would otherwise go to waste.

Hmm, you mean like I said in the bold above?

Note this does not generally apply to gas plants. They can (and do, every day) come up and down relatively quickly and inexpensively. Nukes and coal plants can't.

Even some of the gas has to be kept spinning in case a cloud wanders in front of the sun.