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Perhaps I'm not fully understanding how this works, but could one conceivably run a business whose only product is predicting when the price will go negative and "wasting" power?

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Perhaps not just when prices are negative, but it's not an uncommon practice to 'store' power by pumping water uphill when it's cheap and demand is low (generally at night), and then using that potential energy to generate and sell it when electricity is more expensive.

I have absolutely no clue what it would take to make that profitable, but it's a strategy for handling the natural spikes of demand when using power generation methods like solar and wind that are unable to adjust quickly to changing demand.

A lot of hyrdro plants have exactly that ability. Buy low sell high.

So they could now make money when buying AND selling?

Just like everything else, yes.

I don't think there are too many products that you can make money from buying. The few I can think of are things like bee hives (paid to remove it and paid for the bees), dirt/sand in abundance areas (I'm not sure they sell it), and other natural resources. Most of them you're getting paid for removal and not buying though.

Housing and real property can sometimes effectively work that way, where you are paid for buying because you are taking on responsibilities by purchasing the property(say, for liens, cleanup, etc)

A business that wants to shift a loss making division could be the same.

>I have absolutely no clue what it would take to make that profitable

You need a large watershed with a wide range of useable head. It is an excellent system when the geography and hydrology allows for it.

Unfortunately, such areas are not common or evenly spread, and are not really possible to economically construct without a great deal of cooperation from the local geology.

You also need one where you're given significant environmental carte blanche. These types of projects are similar to dam projects in the scope and scale of the amount of the environment that they destroy, times two as you need upper/lower ponds.

Your lower pond could be the sea.

So then you're pumping salt water into (presumably) a fresh water lake. I don't think that decreases the environmental damage.

Yep, your upstream lake should also be saltwater.

I honestly do not think there is anywhere in the world that has easy access to the ocean, a large potential hydraulic head, and a pre-existing elevated saline lake to work with. Maybe somewhere in the Atacama? Is there enough power demand in the region to make it worthwhile?

[edit] I did find a very small seawater pilot project that was dismantled last year in Okinawa. https://en.wikipedia.org/wiki/Okinawa_Yanbaru_Seawater_Pumpe...

As the sibling comment shows, you can build an artificial lake large enough to be feasible. The Okinawa plant seems to have been decommissioned for lack of need (at its given cost). It was probably a victim of the current oil/gas extraction boom and artificially deflated oil prices. Still, I wonder about their ability to control costs due to corrosion--salt water is horrible for this reason.

I couldn't find much more about the site in English, but considering how expensive the lining must have been for what was a pretty small storage pool, in addition to needing expensive materials like stainless steel and assorted specialty plastics to deal with corrosion...

I can't know for sure, but regardless of whether they say it was due to weak demand or not, I bet it was the saltwater issue that sunk the project more than anything else.

Salt water corrosion is a big issue, but, if you're making a large upper pond, you're still causing massive environmental damage.

Also where this geology is present that is usually far away from the places where it is economic to deploy wind-turbines, and often from where it is economic to deploy solar panels.

Also, what "greens" often ignore: these giant storages, are dams on flatter areas are often also devastating to the environment.

I hadn't realized that the incentive structures could make it possible for an organization apart from the energy producer to run such a facility. An elegant application of market economics.

There's a facility in Switzerland which does exactly that: http://www.alpiq.com/news-stories/media-releases/media_relea... It provides "negative balancing energy" and turns water into steam.

Aluminum smelters already do exactly that. They use power no matter what, of course, but are well-positioned to be able to absorb massive amounts of electricity when the cost structure makes it beneficial to do so.

Why aluminum smelters in particular? The process has a wide range of parallelism? It seems like most industrial processes would adjust more on demand.

The way you separate aluminum from alumina is by electrolysis. Like you guessed, it is highly parallel. It is as simple as having hundreds of pots, each with huge carbon electrodes, dumping megawatts of power into the molten matrix to extract the metal. And it consumes an obscene amount of power to do so.

https://www.youtube.com/watch?v=fa6KEwWY9HU&feature=youtu.be...

https://theconversation.com/the-trouble-with-aluminium-7245

This is also the primary reason that aluminum recycling is so beneficial. It is dirt cheap to remelt already refined aluminum vs. smelting fresh ore, even though aluminum itself is an exceptionally common element.

Yes, but aluminium smelting has certain constraints - namely, the molten metal cannot solidify[1]. This restricts your ability to quickly spin up and down smelters, but they are still potentially a very useful part of an energy smoothing strategy.

[1] https://en.wikipedia.org/wiki/Aluminium_smelting

Sure. But the thermal mass of an in-use pot is significant, and that buys you time. You can read more about the details here:

http://www.aluminiumtoday.com/contentimages/features/Oyeweb....

It's a well-done summary, I think you'll find it interesting. The tl;dr is that power interruptions up to ~4-5 hours do not cause significant trouble.

Huh, interesting. I read the whole thing and understood at least half of it ;).

Are the damages primarily thermal? I couldn't figure it out from that report, although it seemed to somewhat hint that they were. I.e. if you could keep the cells warm (with more insulation or otherwise), would they still get damaged by the shutdown?

Your assumption is correct. The vast majority of the damage comes from thermal stressing of the refractory materials that make up the crucible of the furnace. If there were better insulators available, so that the rate of heat loss through the furnace was minimized, it would be a huge improvement to the industry, both in energy saved during production, and greater amounts of time available after shutdown before thermal effects wreck the furnace.

I remember reading that in aluminum smelting, compared to other industrial processes, the energy cost is an especially large part of the overall costs. So when energy costs are abnormally low, smelting aluminum could go from bad to OK to wildly profitable.

You're right. A key sentence from the second link I posted:

> the embodied energy (all the energy used to make the material) for aluminium is 211 GJ per tonne, compared to 22.7 GJ per tonne for steel.

Power traders do this all the time. Each power plant/wind farm/solar farm has a generation cost and a time span that is required for startup or shut down. Balancing these factors and meeting demand the cheapest way possible is their business.

Also keep in mind that the price to consumers will never be negative. This would be only the generation and distribution side of the house.

It is a signal to ramp down or if you have a storage facility store.

If the prices remain negative or low for long periods it is a indicator to build transmission to where prices are high. Or if yours are a consumer build you factor or data center in the zone with low prices.

That's what energy storage is.

Another concept is "dispatchable load". With fuel-driven generation, you have dispatchable power -- additinal generating capacity is brought online to meet anticipated demand.

With dispatchable load, some process which can be rapidly activated or deactivated with little loss in overall efficiency is utilised. Examples would be water pumping (simply for water storage, irrigation, or other uses, not pumped-hydro power storage), or aluminium smelting, or electrically-driven thermal or reduction processes.

An equivalent concept is "make hay while the sun shines". The Sun's power isn't dispatchable (though it's fairly predictable), and if you're doing something that relies on it, you're best advised to make use of it whilst you can.

You could even go so far as to have a bank of batteries, be paid to take in power, then earn money selling it back to the grid later when prices are positive.

You'd probably need more batteries than would be economically feasible in that precise setup. But a similar scheme is used with electric water pumps and hydroelectric turbines. It's called pumped hydro:

https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...

Grid batteries are starting to come online.

A somewhat special case is Fairbanks (which is isolated, so the economics kick in earlier):

http://www.windpowerengineering.com/design/electrical/batter...

A much larger installation is planned in China (different tech too):

http://www.engineering.com/DesignerEdge/DesignerEdgeArticles...

There are also some megawatt-hour scale lithium-ion experiments at substations.

There is a trial in the UK: http://www.bbc.co.uk/news/av/business-30488657/leighton-buzz...

There is also a Tesla/SolarCity solar+battery plant in Hawaii that opened earlier this year and is currently operational. It is 13 GWh and 52 GW, thus it provides 13 GW of stored solar energy for 4 hours after the sun goes away.

http://thegardenisland.com/business/energy/kiuc-opens-new-me...

* Megawatts

But a good example that grid batteries are starting to make sense for power companies.

There are many ways to store energy. Molten salt has been used in Spain and Arizon USA, but not at huge scale.

https://en.wikipedia.org/wiki/Thermal_energy_storage#Molten_...

While the utility of electricity for consumers may become zero, transport of it via the grid still costs money. So for producers the electricity price becomes negative.

If you own a large building or campus, you can get an ice maker to integrate into your HVAC system, and exploit electricity price dips. Thenwhen juice is pricy, you're just running air past your stored ice instead of running the AC.

The one catch is if you want this, you essentially have to let the utility control your system over TCP/IP

Done since the 1960s.

I'm thinking that'd be a stretch. Anything that would sink enough power would have high capital costs, and negative prices (in my experience in US power markets) don't occur all that often. If you tried this as your primary business model, you'd wind up with a lot of money sunk in assets that may or may not pay off (and if they do pay off, will happen indeterminately in the future).

Yes. Modeling the load on the grid and anticipating supply/demand is basically what energy commodities traders do.

If you can provide superior guesses about prices, then you'd have traders lining up to buy your service.

You could mine bitcoins :)

It would be idle most of the year though. Perhaps a big bank of resistors would be cheap enough to soak up some of that negative priced power and profit.

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