Power Prices Go Negative in Germany | Hacker News Reader

Power Prices Go Negative in Germany

nytimes.com

485 pointskwindla250 comments

The article doesn’t actually answer the questions it purports to answer. Better source: https://www.cleanenergywire.org/factsheets/why-power-prices-....

Energy markets are artificial markets designed to create various price signals that result in certain incentives on both generation and demand, subject to numerous constraints. One constraint is that demand and supply must balance. The grid can’t store much energy. Oversupply can cause grid frequency to go above 50/60 Hz, threatening grid stability: https://www.e-education.psu.edu/ebf483/node/705. Power prices go negative when there is too much generation capacity online at a given instant, relative to demand. That creates incentives for generators that can shut down (like natural gas) to do so.

Negative power prices are not a good thing for consumers. A negative price in the wholesale electric markets does not mean the electricity is "less than free." Obviously, even wind power or solar always costs positive money to generate in real terms. Instead, it signals a mismatch between generation capacity, storage capacity, and demand. In a grid with adequate storage capacity, negative prices would be extremely rare.

Negative power prices are not in and of themselves a good thing for consumers. Obviously, that power still costs money to generate.

But, if the means of production (e.g. wind) is overall still a win and power only goes negative for short periods, if consumers can respond and sink that power more cheaply than the producer can dial back & protect the grid in the process, it might be the best solution for everyone.

It's good to have a system where negative prices exist, so that demand can attempt to sink excess supply. But that doesn't mean that it's actually a good thing when prices go negative, as the article implies. That means that demand isn't adequately sinking the excess supply, and the grid is asking for a correction. Aside from the potential for grid stability, if it happens often, that means that you've wasted resources building too much generation capacity.

It doesn't mean that you've built too much capacity, it means that the producer estimates that his cost of shutting down some of the capacity is higher than just paying to offload the excess capacity and continuing to run at 100%.

That's an important distinction because you're always going to need more capacity, simply because peak use over the day tends to be 2x-3x more than during off-peak.

Whether negative prices are bad for producers depends entirely on the details of their setup. If they run a coal plant it's obviously mostly bad, since they're paying consumers to take their electricity while they're having to pay for coal.

But it's not necessarily going to be the case with other forms of production, e.g. what's the marginal cost of continuing to run a wind farm at 100% capacity v.s. shutting part of it down? Maybe shutting it down is expensive for some reason, and at that point you can just pay consumers to act as a heatsink, and make up the difference during the day.

Now, everything I've read on the topic suggests that excess negative prices are a bad thing today, but that's not some fundamental law.

E.g. let's say that fusion once invented is going to be ridiculously expensive to start up and stop, and can only run at either 0% or 100%, but it'll be cheap to just keep it running once it's started up.

Then you'd expect that there would be negative prices for around half the day, and for both the producers and consumers to be happy with that arrangement, since the alternative for the producer would be to buy a massive heat sink farm to burn off the excess capacity during the night.

Instead they could use the same money as a price signal to consumers to use their existing heatsinks, e.g. running their heating during the night.

Following up on this... From https://www.forbes.com/sites/jonbruner/2011/10/20/the-high-s...

> At issue is what happens when too much electricity is on offer. The enormous supply of hydroelectricity during spring runoff can push electricity prices to zero—the BPA gives away electricity to local utilities for free when it’s forced to produce more than it wants to. Since wind producers enjoy production subsidies, they can push rates below zero, effectively paying other utilities to switch off their generators.

The key bit in that passage: effectively paying other utilities to switch off their generators

It is possible to turn off wind turbines (though they get annoyed at this because of clean energy subsidies) or send water over a spillway of a run of the river dam (with some environmental consequences).

There is a neat visualization with that peak demand - https://www.youtube.com/watch?v=jvnaiHFT6nQ - its the visualization of the Columbia river being sent down stream (right to left) through each dam (white bars). The management of "turning on some power for peak noon consumption" begins at 5:00 am as the uppermost dams start releasing more water downstream. So, if the wind picks up in a few hours unexpectedly, the hydro system pays negative (thats at issue in the article) to have the wind power turn off because they can't really stop the river (especially if its a spring high water event in there too).

"if it happens often, that means that you've wasted resources building too much generation capacity."

It's not wasted capacity. It's the nature of wind turbines that in order to have enough to supply a grid on an average wind day, you're going to have an excess of energy production on a really windy day.

Wind turbines are relatively cheap, so to some extent it may be cheaper to build more of them than to build energy storage capacity, even if it means that there is an excess of energy at times.

The article doesn’t mention this but I will guess this is the real time market, or spot market. In off peak hours and especially at such high prices, you are taking about very little actual energy. Most of it would have been purchased in the day ahead market.

This happens all the time in US markets - especially where there is wind.

It is done as a price signal to producers to either ramp down or consumers to buy a bit more. The ideal winner here is pump storage. But they may have already schedule themselves in the day ahead market and have no extra storage.

The market is far more complicated than the article let’s on.

The article also fails to distinguish whether this was the day ahead market or real time market.

In various regions in the US prices go negative often. Nothin usual. Good time if you have storage.

But most of the generation, 89%, is in the day ahead market which rarely goes negative.

The article also doesn’t bother to mention that Germany burns more coal than the US as a percentage of fuel mix.

Lousy article misinforming it’s readers.

Fun fact. The US burns more coal per capita than Germany. Sure theres lots of cheap natgas, but Americans tend to use a lot more electricity. Aircon isn't the difference either, this only makes a small difference.

The data at http://www.nationmaster.com/country-info/stats/Energy/Coal/C... for 2001 shows the US and Germany neck and neck in the coal per capita with the US slightly more. https://www.statista.com/statistics/604946/per-capita-coal-c... for 2015 has similar comparisons.

The 2015 data shows the US at 1.63 metric tons of coal per person (?!) and Germany at 1.38 metric tons of coal per person.

https://www.forbes.com/sites/jamesconca/2017/10/10/why-arent... goes into the breakdown of German power generation. As noted, its actually going to get worse as Germany gets rid of its nuclear power (currently 13% of load).

Overall, for power consumption per capita, yes... Germany uses much less than the US (12,071 kWh for the US, 6,602 kWh for DE).

One thing to note in that is the further north and continental you get (colder winters), the more the power consumption goes up. Norway (24k kWh), Canada (14k kWh), Finland (14k kWh), and Sweden (12.8k kWh) all use more power than the US per capita. Likewise, industrialized equatorial countries also use more power per person (probably for cooling?).

In 2016 renewables in Germany produced 191TWh, up from 46TWh in 2003. The last reactors will shut down in Dec 2022. Over the next 5 years, renewables will increase more than the remaining 85TWh/yr of Nuclear generation.

https://energytransition.org/wp-content/uploads/2017/01/img3...

https://book.energytransition.org/sites/default/files/GET_en...

In order to reduce emissions new zero carbon electricity generation will need to be continually built. Germany is doing this.

Germany gave nuclear a chance, even spent billions on a thorium reactor. They learnt that nuclear is expensive and not compatible with their democracy. The currently running plants were built in 80s and will be shut down after running for decades. Much of the cost, i.e. the waste storage will be socialised. The first long term storage site has already failed. There is no public support for building new reactors, nuclear cannot be part Germany's ongoing decarbonisation.

> Germany gave nuclear a chance, even spent billions on a thorium reactor. They learnt that nuclear is expensive and not compatible with their democracy. The currently running plants were built in 80s and will be shut down after running for decades. Much of the cost, i.e. the waste storage will be socialised. The first long term storage site has already failed. There is no public support for building new reactors, nuclear cannot be part Germany's ongoing decarbonisation.

Yeah, it's totally cool to misinform public, and then claim "public does not support nuclear power" . . . NOT.

Current German "decarbonisation" results in more carbon per kWh produced, so job well done I guess. Oh and "nuclear is expensive" - nice, so Germany has cheap energy after turning green? http://ec.europa.eu/eurostat/statistics-explained/index.php/... http://ec.europa.eu/eurostat/statistics-explained/index.php/... NOT

But nuclear energy plants cheaper then coal plants. And can not even understand how decarbonization relate to nuclear.

Even in the US with less regulation and more subsidies, nuclear is more expensive than coal.

https://www.lazard.com/perspective/levelized-cost-of-energy-...

Keeping old nuclear plants online for a few extra years is not a solution to climate change. If some other western democracy can show how to build and operate nuclear plants cheaply and safely, great, do it.

So far the examples of recent new builds are slow and expensive. See VC Summer, Vogtle, Flamanville, Olkiluoto, and Hinkley point. From where I sit it looks like the German decision in 2001 to phase out nuclear was the right one, but only time will tell. (Merkel really did make a big mess in 2011 though)

Edit: Finish names are hard to spell.

Are you looking at domestic generation or imports too?

I think you're missing the critical piece of your explanation of why negative prices aren't good for consumers:

The reason that negative power prices look like they would be good for consumers is that it seems like they should lower their monthly bills. But in practice their bill should stay the same, even if there were significant periods during which energy prices were negative. Why? The negative prices don't indicate that the cost of power production is negative for the power company, so the power company is losing money. The power company has to recoup those losses somehow, and they do it by charging more when power prices are positive.

In order to take advantage of negative power prices, a power consumer would have to dynamically increase their power consumption in response to the negative prices. If they have any significant power storage capacity, maybe they could store power and sell it back to the grid when prices go positive, or maybe turn on their mining rig while prices are negative, if they go negative frequently.

All energy costs a positive amount of dollars to produce. Thus, in the long run, the price of electricity must be such that generators recoup their fixed costs, recoup their variable costs, and make some profit that makes the whole endeavor worthwhile.

In an ideal grid, the price of electricity would be a stable amount that hovered around this long-run price.[1] If battery technology was up to par, generators would place batteries between their plants and the grid, and deliver electricity at a predictable rate, which would keep the price stable. Negative rates that deviate dramatically from this price are the sign of a grid in distress. Even though individual consumers might be able to take advantage of these periods of negative rates, that doesn't mean its good news for consumers as a class.

It's like when the power company pays electricity users to shut down during demand spikes. Yes, consumers that can throttle demand during spikes can make money from such events. But if you're seeing the price of electricity spike frequently, that's a sign of something wrong with the grid, not a positive thing for consumers.

[1] This is a simplification, because there's actually more than one energy market involved that generators use to recoup their costs: https://www.bateswhite.com/media/publication/55_media.741.pd.... But it's easier to explain assuming one market and one price.

> All energy costs a positive amount of dollars to produce. Thus, in the long run, the price of electricity must be such that generators recoup their fixed costs, recoup their variable costs, and make some profit that makes the whole endeavor worthwhile.

The only type of cost that strictly determines a price floor is the variable cost. Recuperating fixed costs and profits are based on a revenue prediction which may or may not come true, but once the investment is made it rationally operates until prices descend past the variable cost barrier, regardless of whether long term ROI is positive or not.

What I don’t understand is why prices must go negative. A price of zero should be enough to turn off capacity, modulo switching costs (the cost to start or stop a turbine?)

> The only type of cost that strictly determines a price floor is the variable cost. Recuperating fixed costs and profits are based on a revenue prediction which may or may not come true, but once the investment is made it rationally operates until prices descend past the variable cost barrier, regardless of whether long term ROI is positive or not.

Only variable costs will drive the short-term decision of whether to stay on or not. But the price of electricity in relation to fixed costs and profit will factor into the long-term decisions regarding building new plants and decommissioning ones that need refurbishment/upgrades. In the long run, the price of electricity has to be high enough to ensure sufficient capacity to meet demand.

(That's something of a simplification, as I said. In reality, the incentive for building new capacity comes from both the electricity market, and so-called capacity markets: https://business.directenergy.com/understanding-energy/manag...)

> What I don’t understand is why prices must go negative. A price of zero should be enough to turn off capacity, modulo switching costs (the cost to start or stop a turbine?)

It can take a coal plant ~4-8 hours to reach maximum output after even a warm restart.

Many kinds of power generation can't be easily started and stopped (nuclear, say). It might be cheaper to create an incentive for someone to use your excess power for a short period than it is to absorb the cost of a long shutdown and restart.

It can take a long time to turn some capacity on or off, and not all generators throttle cleanly to zero. Hydro plants can have rough running ranges that cause excessive wear. or might have run-of river flow requirements. Coal plants have huge parasitic loads in the crushers and pulverisers and blowers, and/or poor ability to throttle below a minimum limit.

For any of those reasons, it may make sense for a generator to pay someone else to temporarily take their excess capacity, rather than shut the generator down.

In the U.S., the main reason prices go negative is because of the production tax credit. Wind producers get a subsidy per MWh produced. Since the unsubsidized marginal cost of production is zero, the result is a negative effective production cost. So if wind is the marginal energy producer, the clearing price goes negative.

I don't know how things work in Germany, but I'd be surprised if the negative prices there had much to do with the costs of starting/stopping conventional units. In most electricity markets, participants have to bid in their marginal cost. Even if you're an inflexible nuke, your marginal cost is positive. You usually need genuinely negative marginal cost units to drive the clearing price negative. That only really happens when subsidies are part of the picture.

After investors get burned a couple times, the revenue predictions get updated to account for the measured risk. So, thinking longer term, fixed costs do have to be taken into account.

To be precise, negative energy prices are good for consumers with flexible energy usage (and bad for other consumers). For example, if you have a battery at home, you could charge it when energy prices are negative and use the battery when energy prices are high. Ideally, such a system of incentives would reduce peak consumption, making the energy market overall more efficient.

... assuming that you can get wholesale rates rather than retail rates. Dynamic pricing for cost is something that California is working on. https://www.caiso.com/Documents/FlexibleResourcesHelpRenewab... describes some of the initiatives:

> ) increasing demand by expanding the ISO control area beyond California to other states so that low cost surplus energy can serve consumers over a large geographical area; 2) increase participation in the western Energy Imbalance Market in which real-time energy is made available in western states; 3) transition our cars and trucks to electricity; 4) offer consumers time-of-use rates that promote using electricity during the day when there is plentiful solar energy and the potential for oversupply is higher; 5) increase energy storage; and 6) increase the exibility of power plants to more quickly follow ISO instructions to change its generation output levels.

#4 (time of use rates) and #5 (storage) are aspects you are thinking of. That isn't the case in all markets.

The chart in the graph shows an 11k MW demand ramp up for 2016 from the lull in the early afternoon to the early evening peak demand. The market needs to be efficient - and also be able to properly handle the oversupply.

Another part of the "ug, this is complicated" comes into the cost of power hookups. Typically, that's done as a service fee on the power bill. But, if you have residential solar, you are demanding less power from the grid and paying less of the constant cost of the upkeep of the utility. This increases the service fees on the people who don't have residential solar. Also, there is the challenge of managing the residential solar as part of the smart grid - people may not want to curtail their solar mid day even if they're only making pennies - that solar investment that they made isn't going to pay itself off if it isn't generating.

I'll just add in some empirical results. German power has risen to be some of the most expensive in Europe since they started the Energiewende. They have very low wholesale prices (driving the coal producers out of business) combined with very high retail prices (might be top 3 in Europe?).

The high retail price appears to be driven by the mechanisms driving the Energiewende ie transition to wind and solar.

https://www.cleanenergywire.org/factsheets/what-german-house...

https://www.ovoenergy.com/guides/energy-guides/average-elect...

The NYT article reads as though Germany is benefiting from the switch to renewables, and that the only problems are that sometimes there's so much power around that they have to pay people to use it.

It mentions high cost of electricity, and that it's due to fees and "renewable investment costs" but then immediately hand-waves that away because "household energy bills have been rising over all anyway."

When combined with your information above (those hand-wavy fees actually account for fully 50% of the costs, with 24% being the renewables surcharge) it would seem that the NYT is being misleading. It seems they want to convey the idea that the renewables are an immediate good thing for everyone (which I do not take issue with politically) while downplaying the significant costs to consumers. Am I missing something?

If I'm not, then this does nothing but contribute to the current view of American media as being intentionally misleading when it suits their interests.

Perhaps. But the price of oil is manipulated and subsidized as well.

I'm not aware of the US-situation, but as this article is about Germany, I can tell you that 2/3 of the german oil price are taxes. We usually pay $6-7 per gallon.

The gas tax at the pump is somewhat complicated here as each state does their own tax. This can create interesting price differences as you drive across state lines. Also, we have a change over in the summer to a "summer blend" of gas which causes a change in prices (usually upwards) as I believe it's more expensive to produce.

https://taxfoundation.org/state-gasoline-tax-rates-2017/

The problem is, that companys are freed from the renewable energy tax- a aluminium hut for example is tax exempted and thus can use the generated green energy at the price point of nuclear/coal energy- which amounts to privat households subsidizing industry.

No, I don't think you're missing something here.

The price for electricity is indeed very high in Germany, rising to new heights with the new year, again.

The problem is, unsurprisingly, regulation and policy, i.e. the fees you already mentioned, and the subsidies for industrial usage, etc.

So, yes, it actually seems that the NYT is misleading here.

Let's leave this as an exercise for the reader, to judge if anyone should really be surprised here.

I always think of this old "Trust, but verify" quibble, and that it is actually based on an old Russian proverb. The irony.. :)

> The price for electricity is indeed very high in Germany

It's not only very high, but the second highest in the world, and we are about to take over the first spot [1]

> The problem is, unsurprisingly, regulation and policy, i.e. the fees you already mentioned, and the subsidies for industrial usage, etc.

The problem are the subsidies for all the green energy. It's not only the direct costs but also the costs for grid interventions (turning on/off capacity), paying for renewables even if they are not producing because there is too much energy available, the huge requirements for new energy lanes from north to south, getting rid of nuclear power etc.

Subsidies for industrial usage is often quoted as increasing the costs by interested parties, but it's also a direct need of the Energiewende, because the economic damage would be gigantic. Unless you want to get the energy intensive factories out of your country, you have to factor in those costs.

> So, yes, it actually seems that the NYT is misleading here.

Yes, as does most media - especially in Germany. Those negative prices are no win for any german. Why else is it, that we will soon pay the highest prices for electricity in the world?

[1] http://www.sueddeutsche.de/wirtschaft/energiekosten-in-oecd-...

"Several countries in Europe have experienced negative power prices, including Belgium, Britain, France, the Netherlands and Switzerland."

> Yes, as does most media - especially in Germany. Those negative prices are no win for any german. Why else is it, that we will soon pay the highest prices for electricity in the world?

AFAIU, it's because you're aggressively shaping the energy market in order to reduce health and environmental costs now.

The technical issue here is that batteries are not good enough yet; and [hemp] supercapacitors are not yet at the volume needed to lower the costs. So, maintaining a high price for energy keeps the market competitive for renewables which have positive negative externalities.

Can the excess energy on certain days be converted back to money through cryptocurrency mining? (While society decides whether batteries are a crucial energy security investment)

The price of electricity is high in Germany for the same reason it's high in California, both states have taken a market based approach and decided to charge people for the resources they use.

This has lots of positive market based effects e.g. people can invest in energy efficiency and be rewarded in terms of monetary savings.

Err, no, there’s significant interference with the market via green subsidies. Read the comments above yours.

These kinds of articles, that falsely try to paint renewables as economically competitive with traditional energy sources (and now, they are actually at a negative cost!), are constantly popping up in NYT and other lefty publications. They satisfy the cravings of their left-leaning readers, who desperately want the world to embrace their feelings about the environment. They understand that the only way for this to happen is to use smoke and mirrors to convince the populace that the enormous upfront cost of these initiatives (often borne by governments and then passed onto taxpayers) will eventually be a financial net positive.

Unfortunately, most of these claims are either completely false, or come with huge caveats. The reality is that with upfront costs included, most renewable energy today is significantly more expensive to produce than traditional forms of energy. No amount of clever journalism will change that.

> They satisfy the cravings of their left-leaning readers, who desperately want the world to embrace their feelings about the environment.

i'm not aware of any left-leaning readers who want renewables to succeed because of their lower costs. the point is to reduce environmental impact and externalities that the fossil fuel industry simply chooses to ignore. even if the burden of upfront cost must be borne by taxpayers, it's no different than simply taking into account all factors of power generation using existing infrastructure and methods.

Even as someone who is very left wing on the environment, it's hard for me to overlook how much misinformation exists on the issue from left-leaning media. This article is a great example: the central implication is that renewable energy is so cheap and plentiful, that it's driving energy prices negative!

You shouldn't overlook it; you should absolutely call out news sources when they're being intellectually dishonest.

But that doesn't change the fact that if we don't transition to renewable energy, we will wreck the planet, at least wrt humans surviving on it. The cost doesn't really matter when you consider that aspect.

Will we? Seems like we could use fission plants just fine if we wanted to.

Two issues with that:

1) We still haven't solved the nuclear waste disposal issue.

2) Even if fears around #1 are overblown, "if we wanted to" is the rub: there's very little political or public will to move any meaningful amount of energy production to nuclear, and in some places in the world, countries are actually retiring nuclear plants as the age and replacing them with something else.

Wind has been profitable for years and years even without government handouts, and turbine blades can be feathered if electricity prices are negative. Profitability isn't the issue here.

As I understand it, the real problem is two-fold. Firstly, wind isn't reliable, and if you have too much wind power feeding into your electrical grid but don't have enough storage, the entire grid becomes unreliable. Secondly, wind turbines cost about the same whether they're producing power or not, meaning that they're always feeding power into the grid if the market price is above zero. This takes money away from more reliable power sources - coal, gas, hydro, storage - and can drive them out of business.

That's a more complicated problem than "NYT is a left-wing conspiracy", and it's harder to solve.

>Wind has been profitable for years and years even without government handouts

Please cite your credible source saying that wind energy is currently profitable in practice without subsidies in more than a tiny fraction of areas on earth.

Nice double standard there. You're allowed to make claims without presenting evidence, but when someone else does, you attack them for not providing sources?

A quick google for "unsubsidized wind power profitability" turned up a bunch of interesting things, though I didn't delve too deeply into any of them.

I can find plenty of sources saying that it isn’t profitable (there are too many to list here). I did look after reading his comment and found exactly 0 credible sources showing that it is currently profitable without subsidies today, and I looked again after reading your comment and still found nothing even when using the exact search you suggested. In fact the entire SERP for the one you suggested, with the exception of one article that suggests that offshore wind power might soon be profitable, has links to articles essentially saying that wind power is economically doomed.

Am I (along with the rest of the world, who would be dancing in the streets, dedicating trillions of dollars to deploying wind towers in every corner of the earth at this very moment, and writing thousands of credible articles about how the world’s energy problems have been solved if this were true) missing something?

Edit: the green folks are coming in and downvoting these comments like crazy. Could one of you please justify your downvote by replying with a link to a credible article that shows wind energy to be profitable without subsidies in non-exceptional places? I think everyone would love to see it, including myself! Google doesn’t seem to know about this very special, world-changing article. Perhaps it is protected with an overly aggressive robots.txt.

I'm sorry you are getting downvoted, maybe it is because of your tone, but coming from someone with an impartial and uneducated view about the subject, it seems like you made a pretty good point.

Believe it or not, I am impartial in this area as well and in fact would love to see renewable energy sources rolled out broadly if and when they are economically competitive with traditional sources. This article just struck a nerve with me because I hate seeing political propaganda masquerading as legitimate news, on either side of the aisle. They have an agenda, and are pushing it with misleading articles (as the parent comment I initially replied to pointed out). They are insulting the intelligence of everyone that reads it.

Article is in Danish: https://ing.dk/blog/nye-normal-uden-spoergsmaalstegn-209443

I don’t speak Danish, and the Google translation isn’t that great, but when I said credible, a random Danish blog wasn’t really what I was referring to. I was talking about something in a major publication.

Economically competitive wind power would be an earth shattering development. If it exists, there would be articles about it everywhere. Everyone on HN would be getting jobs at wind farm startups, and trillions of investment would be pouring in. Venture capitalists would be walking the streets to find wind farm entrepreneurs that have hidden their contact info because of the overwhelming number of term sheets being thrown at them. Bakeries throughout the Valley would be offering turbine-shaped gluten-free cupcakes to VC’s, who would include them with their hand-delivered term sheets in hopes that theirs gets a little bit of extra attention from picky entrepreneurs.

I want it to exist too, I just see no evidence that it does.

Does it really need to be profitable on it’s own though?

Renewable energy has a lot less external costs, i.e. negative effects such as global warming, pollution, etc. On a national or global scale, these costs should be accounted for in any study comparing economical competitiveness. Just looking at the balance sheets of energy companies and their costs vs. income is a bit short-sighted.

> Does it really need to be profitable on it’s own though?

If it’s unprofitable it needs to be subsidised. That’s not bad per se. But you can’t run around arguing it’s profitable when it doesn’t appear to be.

Read the link. It contains more than enough hard info for anyone with a real interest in the subject to look up a few things and become a whole lot wiser. Also, he's not a total rando; he is a wind power pioneer and was the CTO of Siemens Wind Power until 2014. Look him up at Wikipedia - there's an article in English.

https://natgrp.files.wordpress.com/2013/07/india-renewables-...

"We therefore note that wind is now cost competitive with new coal-based generation capacity."

Your article [1] mentions lots of subsidies:

“Over the past 12 months, across key wind states, except Karnataka, the wind tariff has been raised

...

Generation Based Incentive (GBI) restored: In its FY2014 (April 2013-March 2014) budget the GoI reintroduced GBI for wind power.

...

During the past 12 months, we have seen various states announcing their wind and/or solar installation targets (refer to table 3).

...

The GoI has committed to providing low interest- bearing funds from the National Clean Energy Fund (NCEF) for five years to the Indian Renewable Energy Development Agency (IREDA), the nodal agency providing debt finance to renewable projects in India.“

[1] https://natgrp.files.wordpress.com/2013/07/india-renewables-...

https://spectrum.ieee.org/green-tech/wind/for-the-first-time...

If these projects actually come to fruition and achieve their target costs, that would be amazing. However, it appears that they are not yet online, and so nobody knows if they will actually achieve the costs they think they will. So far in this field, projections have not met up with reality.

If they bid for this work that is all they will be paid for the energy. So if they fail it is their own loss

That’s not the same thing as being profitable now is it. Power companies go over budget all the time on builds.

Many of these people are the same ones who believe Tesla can build profitable $35,000 cars because the CEO said so, despite evidence of billions in losses (and subsidies).

In Texas, it most definitely is profitable and businesses are dedicating billions of dollars to building wind power. Unsubsidized costs for wind in Texas are currently $32-62/MWH vs. coal at $60-143[1]. Texas is hardly an environmentalist mecca, just a place with good wind and lots of cheap, open land to build wind farms.

[1] https://www.dallasnews.com/business/energy/2017/10/13/texas-...

It's not a double standard. If you make a claim, you have to provide proof for it. As it now stands, the Energiewende is going to cost one to two trillion dollar in subsidy [1] And that is with a 80m population, so in USA terms the equivalent would be $4-8 trillion. Why would that be the case, if wind energy is so cheap? Are all costs factored in?

[1] http://www.faz.net/aktuell/wirtschaft/technikwissenschaften-...

Unfortunately, I can't give you my source, as it's from a friend who worked at one of the turbine manufacturers and had to work on forecasts for various political scenarios, and I don't think they released any of the data to the public.

I know this isn't a satisfying answer, but hopefully the changes in the EU will provide a real-life example before too long.

You wrote

> Wind has been profitable for years and years even without government handouts

which does not match with

> Unfortunately, I can't give you my source, as it's from a friend who worked at one of the turbine manufacturers

I'd say you wouldn't have to rely on an unnamable source if it were profitable for years.

Wind energy seems to be actually one of the most economically viable platforms for alternative energy, and beats even some traditional sources even without subsidies, according to this study by the financial services firm Lazard: https://www.lazard.com/media/450337/lazard-levelized-cost-of...

Wind energy is not viable everywhere, but in places with no NIMBY concerns, lots of rural land, and lots of wind, wind energy is perfect. Much of the US plains (especially the closer you get to the Rockies) fits this category for instance. Iowa, not exactly a mecca of environmentalism, is 35% powered by wind now; this is estimated to rise to 40% by 2020. (https://en.wikipedia.org/wiki/Wind_power_in_Iowa)

> Secondly, wind turbines cost about the same whether they're producing power or not, meaning that they're always feeding power into the grid if the market price is above zero. This takes money away from more reliable power sources - coal, gas, hydro, storage - and can drive them out of business.

This seems like something a futures market should be able to cover?

Ie there are consumers that need reliable power, and there are reliable power sources. They should be able to come to an agreement, despite cheap but unreliable spot sources in the market?

Electricity is complicated. Once a power plant is online, it outputs to the grid and there must be matching demand using it. Running a grid is about balancing supply with demand. Then wind starts blowing and you have unpredictable oversupply and nowhere to put it - or vice versa.

The trouble is that you can’t just plug a “reliable power plant” in or off the grid. It takes hours (that’s “quick” here) or days to power on/off.

You need batteries to cope (e.g. hydro power plants) and there’s not enough of them now.

Yes, the technical site is complicated. That only underscores the need for proper financial technology to match.

A quick Google search for 'electricity futures' reveals quite a few hits. So this is already a thing.

re: "NYT is a left-wing conspiracy"

That's not quite the accusation and while you will likely disagree with the observation, I'd hope for a more fair representation of it.

For those of us across the political aisle (so to speak), the issue with the NYT is that they slant away from conclusions or present a muddled set of facts to discourage reaching a clear conclusion when it would contradict what would be a commonly accepted truth on the left. Or to frame it differently, when there is a narrative violation, the conclusion becomes whispered or is turned upside down. But when there is no narrative violation, then all is clear.

Just as one (justifiably!) rolls one's eyes at a certain network's claim of "Fair and balanced", some of us also roll our eyes at the old grey lady and her "newspaper of record" aura. Not as often, but it is a problem for the NYT too.

Even if what you're saying is true (I don't buy it for all forms of renewable energy, at least), it kinda doesn't matter: I'd rather pay more for electricity than die on an uninhabitable planet.

The cost of renewables will certainly go down as scale increases; there's no evidence that there's anything special about renewables that would cause them to behave contrary to expectation there. Will fully-renewable energy generation ever be cheaper than the mess we had in the mid 1900s? Maybe, with technology that doesn't already exist, but otherwise maybe not. But that's ok. Paying more for power is better than destroying the planet and being dead.

Without a downvote option available to me I will try to explain instead.

This statement - 'I'd rather pay more for electricity than die on an uninhabitable planet.' is in question.

Who wouldn't do that?? If it was as simple as that - logic would dictate that is the only valid option!

Unfortunately in the world of facts there is only incidental and anecdotal evidence that paying more for electricity would have even a small effect on the habitability of our planet.

To summarize - while it is possible to suggest it may have a positive impact; it is a huge leap to state this as fact in any way (and the largest disagreement I have personally).

To turn your logic on its head - if you believe this then maybe you would let me re-sell you your local electricity at 2x or 3x the price?

Put up 100 gigafactories, install turbines and/or solar everywhere, and buffer the off times with huge on premises batteries. I’m not sure if a 2-3x price increase will buy this in the short term, but going into this direction will have a positive effect.

Oh and that’s not my idea, it’s someone else’s ;)

Since price is a signal, I would not simply charge 2-3x more for local electricity, but instead switch to 30m charge windows for end customers. Prices change every 30m, and the consumers (or rather, their smart homes) decide whether to charge that Tesla right now, or wait until price goes down. Consumers will buy batteries to store electricity when it’s cheaper, giving an incentive to buy solar panels to match.

I’m glad you don’t have a downvote button, because having a conversation is so much more productive.

EDIT: Added paragraph before last.

Some countries do allow citizens to buy spot priced electricity. You may get it cheap for a while, but may also pay through your nose e.g. in case there's a disturbance in a cold winter day.

I know people who follow the spot electricity price and choose to warm up their wood stove when it makes economical sense.

That, of course, is worse for the environment but luckily unlikely to catch any wider usage.

> of course

This is not immediately obvious to me. Care to elaborate?

Small scale wood burning releases a lot more emissions than a purpose built power plant. Individual burning of wood and coal, either for cooking or heating purposes, is the culprit for a big part of the pollution in e.g. India and China.

Inefficient wood burning for heat (in terms of compared to that generated by larger installations). There are some fairly efficient wood stoves, and they are more efficient than retail energy changed to heat... but they're still less efficient in terms of combustion than gas.

The less efficient than gas for combustion means an increase of soot and smoke. The soot leads to a reduction of albedo and an increase of heat capture in the environment.

While not always the case, many times, the design of the heating system for wood often has a significant portion of the heat escape the house (compared to a forced air gas furnace). This again reduces the overall efficiency of the system compared to other options.

With both gas and wood it is often the case that this is a whole house solution - not just heating the current room the person is in. There are many approaches to heating the person rather than heating the room (or house). I found http://www.lowtechmagazine.com/2015/02/heating-people-not-sp... is an interesting read - the chairs and beds of old make a bit more sense in their design.

> Unfortunately in the world of facts there is only incidental and anecdotal evidence that paying more for electricity would have even a small effect on the habitability of our planet.

Huh? You're not really making sense here, and that's not what I've said. I'm not saying that the simple act of paying more for electricity will solve our climate-change problem. I'm merely stating that continuing to use non-renewable, polluting means of energy production is wrecking the planet.

If renewable energy is one thing we need to adopt to slow/stop/reverse that trend (available literature seems to point in that direction), and renewable energy is more expensive (as some people here are claiming), then I'm ok taking that hit.

> To turn your logic on its head - if you believe this then maybe you would let me re-sell you your local electricity at 2x or 3x the price?

That is a complete non-sequitur and has nothing to do with my position or the discussion at hand.

"The cost of renewables will certainly go down as scale increases"

I think you have it somewhat backwards: the ordinary expectation would be increased per-unit costs with increased scale; but renewables are special because they are a hot technology field, so we are likely to see per-unit cost reductions as technology improves.

The reason that per-unit costs typically rise with scale (as illustrated with an upward-sloping supply curve) is because inputs become more scarce. For instance, the best wind and hydro locations are already taken, so new locations will be slightly worse, leading to higher production costs.

"Economies of scale" are an exception early in the supply curve where it slopes downward (due to better utilization of capital, etc.). We are probably past that point because the scale is already quite high, so the supply curve for a given product using a given process is probably upward-sloping, and there are no more economies of scale to be had.

The higher scales will finance technology improvements (in processes and products) so I agree with your overall point that prices will drop. But the reason for the price drop is technology (the R&D for which may be financed by the higher scale) not the scale itself.

I believe this distinction is important because it means we need to watch the R&D budgets, not the scale. R&D budgets will be flush when firms see a lot of improvements to be had, and will dry up when they don't see much more (even if scale remains high).

I don't think we're anywhere near that inflection point. The "best" locations for hydro may be taken (I don't know anything about hydro availability so I have no opinion there), but it's laughable to suggest that's the case (or nearly the case) for wind and solar.

I agree with you that once we run out of viable locations to put our renewable infra, it'll become more expensive, but I think you vastly underestimate the amount of space we have for that sort of thing.

How much externality should be added to traditional forms of energy to make a fair comparison?

> If they have any significant power storage capacity, maybe they could store power and sell it back to the grid when prices go positive, or maybe turn on their mining rig while prices are negative, if they go negative frequently.

There’s no reason to get so sophisticated: just plug in an electrical heater placed outside, and get paid. A negative price is a perverse incentive — unless we want to get rid of whatever thing is priced in the negative.

Which is precisely what we want to do. As mentioned elsewhere, negative prices happen when load is too low and artificially creating load is cheaper than making generators shut down.

It's an uncommon situation, because if it keeps happening then the power plant will indeed invest in giant heaters.

> just plug in an electrical heater placed outside

while that's cheap, it feels like a large waste of energy that could've been used for something useful.

I agree with you, but this is the incentive you create when pricing stuff in the negative.

Well, if there was some reasonable way to predict the negative prices ppl could do laundry, dishes, perhaps crank up the hot water heater (which is a form of energy storage), or charge the car in full.

Yes, all minor but at scale hardly negligible. Certainly better than nothing.

Seems like a great IoT opportunity. Smart-appliances that are able to detect prices on a public energy marketplace, or receive a signal from energy companies, so that they can turn on their high-energy processes when the grid needs some evening out.

This is the first real potential application I've ever seen for connected appliances.

Same. I've generally been pretty bearish on IoT appliances since the usual features seem to be a) contrived, b) net inconveniences, and/or c) primarily of benefit to commercial entities rather than consumers (i.e. buy milk reminders). This, on the other hand, is something that's difficult to do without automation and is pretty beneficial to everyone involved--the more I think of it, the more I like it. Really hope as negative energy costs become more of a "problem" we see manufacturers start drifting towards this use case.

But can't we adobt some habits now? That is, for example, is electricity is cheaper in the evening only do wash after 7pm.

I understand that's not as easy as automatic. But manual also forces us to embrace "the din of awareness" such that green-thinking is who we are, and not something we "outsource" so we have more time and energy to consume.

I think you may be conflating two ideas. You seem to be talking about green thinking, where most of the thread is talking about using automation to even out the grid when energy consumption is below minimum production levels, which may very well happen during the day and at unpredictable times in a solar-heavy grid. Sure, we can adopt green habits now (especially since negative prices are still a rare problem), but it doesn't actually address the discussion at hand.

When I was in California in the 00-09 timeframe I recall the facilities manager had an ambient orb at their desk that was provided by PG&E ( http://www.ambientdevices.com/technology/utility-deployment ). It would change color based on the grid demand hinting to people who had co-generation ability to turn on power if its needed and would start flashing if a rolling blackout was going to occur in the near future. The ambient orb (IIRC) utilizes the pager network - so the information is there if you can subscribe to it.

Ambient also has http://www.ambientdevices.com/about/energy-devices which again has the power information (including cost/kWh) that one could tap into... if the local power company supplies the information.

Yes, but the security really needs to be brought up to par. A botnet of those could synchronize the activation and deactivation of the high-energy processes to wreck the grid for ransom, terrorism, or war.

(I suppose that's way too serious to be done for the lulz, but one never knows)

True. Worst case, notify me of energy price opportunities and then I can decide which of my processes to trigger.

Yeah, I hear ya. But at least it mitigates risk.

Yep, the industry term for this stuff is "Demand Response", and there's already companies doing this.

If you're in California, there's a company called ohmconnect.com. You can hook up your Nest thermostat and smart plugs connected to your lights, fridge, etc. They let you know once or twice a week of peak pricing hours... if you can reduce your consumption during those hours, they credit you. They use your smart meter to verify participation.

That’s how Nest thermostats generate revenue for Google (utility pays Google for the ability to shed AC loads across their customer base during peak demand [“rush hour” voluntary program]).

Tesla’s backend also supports this functionality (although its only deployed in a few geographic areas).

> A negative price in the wholesale electric markets does not mean the electricity is "less than free."

I find this a bit confusing. That is exactly what a negative price means. There are points in time when you are paid to consume electricity (you need to take into account the transmission costs obviously). What is that if not less than free?

> In a grid with adequate storage capacity, negative prices would be extremely rare.

And to get more storage capacity into the grid, we need a price signal to incentivize for that, which, again, negative prices are.

> I find this a bit confusing. That is exactly what a negative price means.

For whom? Somebody is still paying to generate and store electricity and to maintain the grid. A mismatch between storage and demand therefore doesn't mean you get a refund. It means there is an economic imbalance that will result in costs some other unexpected way.

> For whom?

For the parties transacting in the electricity markets with negative prices. The one producing electricity is paying positive amount of money to the one that consumes electricity. Of course, transmission costs need to be taken into account, and of course, that is not a long term equilibrium, but at that time, yes, very much, electricity is "less than free" with any sensible meaning of the words.

"electricity" and "free" are ambiguous terms. Overall, electricity has positive cost. Due to accounting practices and the cost of waste diposal, some electronics are negative priced for the user.

A better way to phrase it is that during short time periods "the cost of disposing electrons is greater than the cost of creating electrons" (and for technical reasons it's impossible to stop creating electrons in the short term) , so consumers can make money by offering electron disposal services to cover their electron consumption expenses.

You are misunderstanding the wholesale price that the utility companies pays with the price they ultimately charge the consumer. For the consumers, the electricity was not free nor negative. They were charged their regular rate.

But yes, negative prices incentivize large scale batteries or other ways to make the supply and demand match up better.

But of course there are large scale industrial customers that do transact directly in the wholesale market and not through a retailer, and of course they were paid to use the electricity.

Then it is up to you and your retailer if you have a fixed rate or a rate that adjusts with the market prices if you are able to utilize the cheap electricity.

Imagine if the prices on bananas went negative because grocers ordered too much and couldn’t deal with a bunch of rotting bananas in their warehouses. Nobody would say “bananas are free,” or that “it’s a good thing for consumers.” It’s simply a signal we’ve made too much of something and are now paying people to haul it away.

With the grocery, it's different, because consumers may be more than happy to take a profit from a supermarket's bad investment. (See also: Venture Capital backed startups). so it's "good for the banana consumer", but not "free" from the perspective of the overall system. Someone has to "pay the piper", some day, as you've noted in other comments.

Oversupply will only cause the grid frequency typically to go up fractions of a Hz and if the power variations are slow enough the grid can easily match the change. Real problems turn up when the system has to shed or absorb load very rapidly.

But usually that's not the case. The grid is first and foremost a power delivery mechanism, not a precision timebase and besides some efficiency issues (resonant cores tend to work best at the frequency they are designed for, such as all transformers in the grid) frequency variation is expected and can be dealt with within limit without further countermeasures.

Far worse than frequency variation would be phase errors leading to massive consumption of power within the grid and imbalance in voltage between phases because it will cause generators or industrial equipment to either break or go into fault states.

Think of the grid as a massive flywheel and frequency variations are slowing down or speeding up that flywheel.

So even if the grid can't store energy directly it can absorb pulses quite well and there are devices that grid operators use that use superconducting coils at very low temperature to stabilize the grid even further. Siemens and a number of US based companies have had these in production for quite a few years, typically you'll find them right next to large windfarms.

Energy markets are not "artificial" markets. Prices, including negative prices, reflect the real-world balance, or lack of it, between supply and demand.

Negative prices create incentive for energy storage. Storage providers can generate revenue not only when returning stored energy to the grid but by storing surplus energy in the first place.

There are plenty of other good comments explaining why negative tariffs exist, but not many giving a solution.

In Europe a lot of residential heating is from electricity, so why not enable this on-demand when the electricity prices go low? Most countries have a cheaper night tarrif as traditionally electricity was cheaper as night, but that’s not really true any more. Often the heat energy is stored (e.g. in storage heaters or an insulated hot water tank) before use, so the energy can be buffered here.

Smart metering is one way to do this, but the basic technology to achieve this has existed for decades. In parts of the U.K. residential electric heating is often controlled by a radio signal [0] that is used to enable/disable the off-peak tariff, but is somewhat dynamically enabled based on the electricity demand.

[0] https://en.wikipedia.org/wiki/Radio_teleswitch

Negative prices in the short term are good for consumers if they are a realistic price signal. Not letting the prices go below zero would have a similar effect as not letting the prices go below 5 or 10, you would be hiding information from the system for abitrary reasons. It's really only human psychology that makes the 0 seem more momentous, just as the odomoter ticking over 10000 seems more momentous than the mile before that.

Usually when I've read about negative prices "caused by renewables" it's been the case that there is actually still some non renewable running. The negative price is sending them a signal, namely, that inflexible sources will be penalized more than flexible sources. Someone planning to build a new coal, nuclear or gas plant will take these negative prices into consideration and influence them to prefer more flexible solutions, even if it costs more, because the flexibility will be rewarded (or, equivalently, lack of flexibility will be penalized).

Hopefully they'll introduce caps that take power costs to a minimum of zero.

I say this with some experience - here in Northern Ireland we're the world leaders in terribly thought out (and utterly stupid) energy policies, and the economic effects of them.

(Our government recently collapsed, primarily due to a dispute over a programme that saw farmers paid ~£1.12 for every £1 of biomass energy they consumed, with no upper cap. Needless to say, there are empty barns in the middle of nowhere at 30°C inside right now causing a lot of pollution and "making" their owners a fortune. As a result of how much it has cost and is projected to, a lot of spending has just been cancelled, including badly needed hospitals).

So yeah, clean energy is great, when it's combined with sane policy.

Something having a positive price means it has value.

Something having a negative price means getting rid of it has value.

A positive price signals that there’s a cost to consume something.

A negative price signals that there’s a cost to not consume something.

Correct. Doesn't seem to apply for the biomass case though

Is that the case here, though?

I didn't directly infer from the article that there was a cost to not expending the energy being held in the grid (i.e. does the grid need to expel that excess?). If it needs to expel the excess to consumers, then absolutely the negative pricing makes perfect sense, but I got the impression that this was more a fortuitous set of variables than an intended outcome.

Why do you think negative prices would have bad side effects? Why would a cap improve efficiency?

What they need is batteries that can store the energy until it can be sold at a higher price. Tesla built a giant battery station for Australia I believe. Negative prices make sense as they need people to use the electricity, but encouraging people to waste energy by paying them to do so is not good environmental policy. Would be more efficient, profitable, and greener to store the energy until it's needed.

"encouraging people to waste energy by paying them to do so is not good environmental policy."

Exactly.

There's nothing like that to worry about here. The prices can't stay negative for more than a few hours or big plants would shut down and get rid of the excess production. The average is always going to be quite positive.

And the relevant wind-power incentives are on the production side, which doesn't lead to any deliberate waste.

Ok, that's a great policy story. Germany works hard, though. After all, this is the country that responded to a climate catastrophe by banning their only zero emissions source of baseload power!

The story behind the negative power price is a great example. This is some delightful spin by the NYT on what is an awful situation here in the country.

The economist[1] has a great little explanation about how the Energiewende fucks Germans into paying more per kWh, earning lower profit per kWh , and producing more CO2 per kWh, all at once. And it takes tax money away from productive uses, to boot! It's not often that a single piece of law can screw EVERYONE. But that's German ingenuity!

[1] https://www.economist.com/blogs/economist-explains/2014/12/e...

It seems like a good first world problem to have, begging for engineers to come up with an elegant solution!

What can a country do with occasional excess power like this?

* Communal/City water pumps run only during periods of excess power in a week

* City managed parking buildings that charge electric vehicles for free during these periods

* Heck city/country runs a data center that would "turn ON" servers only during periods of excess power in grids - to be used for public purpose data munging!

* Run an internet archiver that spins up crawlers only during periods of excessive power..

* Use the excess power to run air purifiers or CO2 absorbers or something else cool for the environment that we would not run otherwise..

What would YOU do if you had free power?

Bitcoin-mining

I doubt it. Looking at bitcoin mining hardware, from what I can tell is that ASIC rigs cost about $2-5 per Watt of energy consumed, let's say $4/Watt. Since one might guess that the economic lifetime of ASIC hardware is approximately, say, 3 years (and that's being pretty gracious), then the capital cost of your bitcoin mining rig is about 15 cents per kWh IF YOU OPERATE IT CONSTANTLY.

...but if you only operate it the 25 percent of the time that electricity is free or negative or something, then the capital cost per Watt is like 60 cents per kWh.

Residential electricity is about 11 cents per Watt. Industrial electricity is about 7 cents per Watt, and cheaper in places like the Northwest US with lots of hydro power.

So it doesn't really make sense to buy ASIC hardware and idle it most of the time. You're better off paying even residential electricity rates and operating 100% of the time. If you have access to wholesale/industrial electricity rates, then it makes even less sense to idle your mining hardware most the time.

It MAY make sense to idle the hardware if prices spike, but if you're not operating your hardware the vast majority of the time, then you're not operating cost-optimally.

This point is generally true and applies to other proposed demand-response energy-sinks like hydrogen production: if your capital-cost-per-watt of demand is not very low, then it doesn't make sense to idle production. Capital cost of electrolysis should be the primary focus of any large-scale effort to leverage renewably produced hydrogen, or there's no way to compete IMHO.

Well, the main thing constraining the economic lifetime of ASIC mining hardware is that eventually older generations of hardware cost more to in power to operate than they make... but if power costs go negative, that's not necessarily true anymore.

Good point.

That's why I said it doesn't make sense to /buy/ (new) ASIC mining hardware if your intent is to idle it. But if it's basically free because it's obsolete, then yeah, it may make sense.

Folding at home

The obvious choice is to charge a battery, where a "battery" can be Lithium Ion, Pumped Hydro, Compressed Air (see CAES), or even rocks on an train that rolls up a hill during negative-power and rolls down a hill during positive power costs (see ARES).

> What would YOU do if you had free power?

Build and run a factory that made more solar panels. Enough solar to power civilization, any expected consumption growth, as well as power to capture atmospheric CO2 and sink it underground.

With the current structure of the electrical system, this actually causes problems in isolated markets. In Hawaii, there are sections of the grid that are oversupplying 250% of what it should take and causing problems with the interconnect getting power from regions that it wasn't built to handle.

https://www.utilitydive.com/news/an-embarrassment-of-riches-...

100% renewable is great if it can be sustained. But if there is too much power put into the grid, that because an issue. Also it means that other systems need to shut down (its really hard to shut down the distributed solar on rooftops of residential units).

Its really hard to curtail an oil plant - they don't shut down or power up quickly. And neither wind nor solar can provide the base power generation necessary in Hawaii for extended night use currently (it needs a sizable power storage system).

Load shifting is something that needs to be looked into more (and that is what Tesla is doing with their battery packs).

https://electronics.stackexchange.com/q/117437 is a good read.

If the limiting factor in manufacturing solar panels was power then it would be an exponential industry (manufacture 1 solar panel, use it's power to manufacture 2 and so on).

I'm pretty sure the limiting factor is the materials and the machinery involved.

If you can automate all the steps, it's all just the energy and the time. Though solar panels require quite a wide supply chain, it will take some time to fully automate.

This was what I was targeting. A fully automated solar harvesting manufacturing assembly. Energy and mass go in, out comes panels that are shipped on autonomous semi trucks to a nearby facility for automated install (automated utility scale install robotics already exist).

Not everything hinges on power, there is a lot of chemical processing involved in getting those raw materials and the raw materials to prices these materials and so forth. Like the production of sulfuric acid that we need for virtually everything.

Pump water into a dam with water turbines. If later power is needed you can open up the turbines more. IIRC this has about 80% efficiency and a big dam can soak up a lot of this power without problem.

Yeah that's a relatively long term storage.. like seasonal. For short spikes, it'd be easier to have local dispensation.

"Pumpspeicherkraftwerke" (pump storage power plant) are a thing in germany and largely they are used on minute basis, not seasonal, going from 0 Watts to a Gigawatt in about 20 minutes and probably faster if really necessary. [0]

Power can be stored and emited within a few minutes to the extend that they are used to compensate power spikes or drops in the grid already, for exactly the scenario described in the OP.

0: https://upload.wikimedia.org/wikipedia/commons/5/5b/Pumpspei...

I stand corrected. It is really cool that we can use water storage that quickly and efficiently.

USA has these too.

https://en.wikipedia.org/wiki/Bath_County_Pumped_Storage_Sta...

As far as I know, its used for "daily" fluctuations. Coal and Nuclear power plants in the region don't want to turn off at night: its more efficient for them to stay hot and keep the turbines going through the night (even when no power is being used).

So the Bath County Pumped Storage dam stores energy at night, and provides it in the day, covering a region that contains 13 States.

I don't know the response time of the system, but I'd expect it to be similar to the German system of "within minutes" or so.

As described in the Wikipedia page, the power load balancing is done over the course of a day - not seasonal (those tend to be reservoirs for consumption / irrigation).

> Along with energy management, pumped storage systems help control electrical network frequency and provide reserve generation. Thermal plants are much less able to respond to sudden changes in electrical demand, potentially causing frequency and voltage instability. Pumped storage plants, like other hydroelectric plants, can respond to load changes within seconds.

- Pumped storage hydroelectricity grid [1]

- Wall socket receiver for power-line communication [2] to schedule energy consuming devices at homes/factories - dishwashers, washing machines, heaters, freezers - this may be not to easy to match demand but at least that could be scheduled in some reasonable time range like "within 4 hours" etc. Also I would be fine to "store" cold with freezers down to -50 deg C. The receiver could display electricity bill saving to incentivise users :)

- Subsidized home batteries (like Powerwall but with no need for solar part) which could be controlled by electricity supplier to balance usage - also with some power-line communication.

[1] https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...

[2] https://en.wikipedia.org/wiki/Power-line_communication

Smelt aluminum

Store it in a set of batteries?

But it's not free power. That's just the ny times speaking to it's audience's wishful thinking.

It's power that the grid operators are legally required to pay to deliver, which means consumer electricity prices are higher. And it's caused by a system where a consumer electricity surcharge pays a fixed, above market price per kWh. In a country where zero emission nuclear power is banned, and tax fueled subsidies support fossil fuels to replace it.

So this "free" power is paid for in higher electricity prices for consumers (Germany has some of the most expensive electricity in the world), low profit for producers (the two biggest energy companies have seen income from production drop by more than 33% over 4 years), and higher CO2 emissions (emissions from energy production, and % of coal generated power, have risen under this policy).

It would be much better to just tax people to buy power for civic projects like the ones you mention. Unfortunately our expensive "free" electricity doesn't come with perks like that.

I'm curious here about what, if anything, these these negative electricity prices might mean for cryptocurrency mining and transaction processing. How feasible would it be to set up compute infrastructure that "soaks up" the extra power in the German market, but is -- presumably -- idle a lot of the time? For example, is this a good application for distributed networks that piggy-back on top of other peoples' computers (with permission, of course). See, for example, historical examples like SETI@home, Folding@home, and Popular Power.

This is theoretically perfectly feasible. Currently, however, the capital costs of mining equipment are so high that it doesn't make sense to keep them offline.

And if you don't have to pay any capital costs, because you are running a massive, opt-in, decentralized pool of compute resources that other people own ... ? :-)

Most coin mining is not practical on home computing devices. Wasting the power generation in this way isn't necessarily the best investment of the surplus power.

Also... realize that this is power to the local utilities is negative cost - not the power to someone's home. They're still paying retail rates. I would be most disappointed to have the power utility turn on something that causes me to consume more power (be it cryptocurrency or all the lights in my house) when I'm still paying retail rates.

Good point about retail rates being very different from wholesale rates.

If you aren't controlling the hardware doing the mining you also don't care about the electric costs to operate it.

Well, you might if part of your arrangement with the people in your pool is that you'll mine only when it's profitable to do so.

For all we know the Chinese coin miners you are competing with already pay nothing for their energy, 24/7. And in the grand scheme of things, despite alarmist opeds in the NYT, computers or cryptocurrency miners are simply not big energy consumers where the opex for buying them only to have them sit idle for rare negative energy prices would somehow make you come out on top. You are looking to sink gigawatts here.

Got anything at all to back up that rather wild claim that chinese miners don't pay for power?

You gotta test them solar panels at the solar panel factory right?

Over on reddit, a lot of speculation in https://www.reddit.com/r/Bitcoin/comments/43opxy/does_anyone... suggesting partnerships / kickbacks. That said, the entire thread is speculation without a single sourced link.

For some actual numbers, http://www.theenergycollective.com/lindsay-wilson/279126/ave... shows the cost of electricity around the world... though thats over the entire country (Pacific northwest is cheaper than other places). I would expect that the Three Gorges dam (22 MW capacity - for comparison the Grand Coulee Dam is 6.8 MW and is the largest hydroelectric power in the US (Hoover is 2 MW)- the run of the river dams on the Columbia are in the 2 MW to 1 MW range). Historically, Pacific Northwest power has been as low as $0.0308 and $0.0245 / kWh. Its a bit more now, but still lower than the national average.

From http://www.isi.fraunhofer.de/isi-wAssets/docs/x/de/publs-mit... it appears that if you use enough, you're at wholesale rather than retail or commercial rates.

If its not free (the implications of corruption in Chinese government are made here), the retail power cost is going to be low, commercial is lower, wholesale is going to be lower still. Its probably a bit cheaper than the historic Pacific Northwest rates.

"partnerships / kickbacks" means that the "miners" are a larger team than just the people at the mining factory --- the team includes the power company and their funders, who are paying.

I see this as an important stage of going green:

Recently/Currently: Unpredictable spikes in wind+solar power make it less profitable to run base-load power plants, since they can no longer guarantee profit at 100% of their duty cycle. Cleaner natural gas peaker plants replace the coal+oil baseload capacity.

Currently/Soon: solar+battery costs fall below natural gas costs, so battery-storage systems replace peaker plants.

Near future: The transportation network converts from gasoline to electricity, absorbing spikes in generation.

Further future: baseload is entirely wind+solar, small and moderate spikes go into batteries that are distributed throughout the grid. But because baseload capacity is scaled to typical demand during typical weather, there are periodically very, very large power generation spikes when wind or sun is strong, generating a lot of temporary energy at essentially 0 cost. I hope this power is used to power negative-emission technologies.

I'm not quite sure how to precisely calculate the need, however I'm afraid that you are over-estimating battery capacities. Tesla's Giga Factory planned annual battery production capacity is 35 gigawatt-hours (GWh). Assuming one cycle per day, and a life expectancy of 1000 cycles, dedicating all this plant production to replace peaker plants will give you a storage capacity of about 100 GWh.

While non-trivial, it's still dwarfed by US daily electricity consumption: about 11,350 GWh [1]. Not sure how much would be needed for peaks, but 100 GWh sounds small. And the Giga Factory production is not going towards trying to absorb peaks in the US, but in cars used all around the world in non-optimal patterns.

[1] Based on an annual consumption of 4,144.3 TWh in 2015: https://en.wikipedia.org/wiki/Electricity_sector_of_the_Unit...

Most cars are parked during the solar peak and during the overnight wind peak, so there's plenty of opportunity to use ordinary electric car charging as storage.

Tesla batteries might not solve the storage problem on their own, but there are plenty of additional ways to store energy.

Imho up until recently, we didn't even have that much incentive to research and innovate on large-scale energy storage (outside of storing it as fossil fuels), as we would just generate it when we needed it, so no real need to store it, no need to innovate on that front.

But with the abundance of energy created by renewables, we will need to rethink our approach to energy production and consumption, putting more of a focus on storage than was needed before.

Indeed, I was specifically talking about batteries. But there are many other ways to store energy. They don't even need to be as efficient as batteries, as long as they are cheap/scalable.

Found an interesting study after some googling: https://www.lazard.com/media/438042/lazard-levelized-cost-of...

> Currently/Soon: solar+battery costs fall below natural gas costs, so battery-storage systems replace peaker plants.

Already happening... the application to build the Puente gas peaker in California has been suspended (for now) when it was realized storage could be a cost-competitive alternative: https://www.greentechmedia.com/articles/read/battery-storage...

That's the hope. The reality is of course more complicated.

You characterize the current situation quite well: "Unpredictable spikes in wind+solar power make it less profitable to run base-load power plants." It's important to add that subsidies for renewables mean that the baseload providers have to compete with artificially cheap power, at the same time. This double whammy is important to bear in mind.

In Germany, the spikes are up to 25% of national energy production. So that side of the double whammy is pretty intense. On the other side, the renewables subsidy is also very painful. Power companies must, by law, buy consumer surplus renewable power at a fixed, much-higher-than-market price. So not only do they have to compete with cheaper-than-free, they have to pay for it, too! This is why German electricity prices are some of the highest in the world, and yet profit margins are some of the slimmest in the world.

It's hard to overstate the precariousness of the situation for energy producers in Germany. The largest one (Eon) has lost over 75% of their share value in the last 8 years. Since 2008, energy providers have been the worst performing sector in the Morgan Stanley index of share prices. This is not "less profitable", this is "almost impossible". As a result, most of them are getting out of the power generation business. Where that ends is anybody's guess. But what we see today is with only 22% of the energy infrastructure provided by variable renewables. What will happen if we hit the 35% target in 2020?

In order to survive, power production companies turn to the cheapest forms of power they can. Because of shale-gas boom in the US displaced coal use there, the cheapest option in Germany is brown coal. This is also happening at a time when Germany decided to decommission all it's zero-emission nuclear plants, so there's a lot of baseload support being built, which ends up as coal. End result: the more renewable power generation you have, the more baseload comes from dirty coal. Germany's CO2 emissions from energy production have actually gone UP since these policies came into effect, even though renewables make up an enormous percentage (almost 34%!) of our power generation.

You seem to think that gas power might be competitive here. I don't know the rest of the world market, but that is not the case in Germany. LCOE calculations I've seen are that "ideal case" lignite costs between 2,7 - 5 euro cents per kWh. Combined cycle gas costs between 4,1€ - 7 cents. Not much competition there. Solar is between 3,5 - 18 cents per kWh, so even though the price is lower than gas, the risk is much greater.

Currently/Soon: "Solar+battery costs fall below natural gas costs." I mean, that's nice. But when? And how? And who will do it? The variability of solar costs is a massive obstacle. In Germany, we subsidize combustion engines and diesel. Electric car adoption is actually on the decline in the last couple of years. So while I like the vision you lay out, it's far from a fait accompli.

Near future: I don't even know where to start on this. This phase is a pipe dream as far as I can tell. The infrastructure costs are outrageous. Are you aware of a country that is doing this?

Further future: "baseload is entirely wind+solar" is just not possible. Wind and solar have variability measured in multiples. Baseload is typically estimated at 35-40% of total power consumption. If 40% of our power is supplied by wind/PV, then you're talking about handling spikes of more than 40%, when demand is already at its peak! What infrastructure can you imagine, that can occupy 40% of a country's power production... and switch on and off periodically, and scale rapidly? For a sense of scale, in the US, you could manage this by heating up Lake Erie by 3 degrees celsius in an hour. That would burn about 40% of the total energy production of the country. Furthermore, what energy grid can handle that? And who will pay to upgrade it? The cost to upgrade the EU energy grid to a "smart grid" is estimated at just over $1 Trillion. No energy company can afford to pay that; especially after taking such brutal losses for the last decade.

So while this seems like a stage in an orderly progression, that's an illusion. The reality is much more chaotic, where our best-laid plans end up with counter-intuitive results (renewable subsidies RAISE CO2 emissions?!?), there are no silver bullets (PV and wind cannot provide baseload power), and there are no guarantees (the big power companies might just fold or move into other areas).

Based on the results of the grid battery system in South Australia it looks like this is the next step for Germany.

Add the batteries for peak smoothing and then you can start to take off the more problematic (carbon foot print wise) base load sources.

Exactly, they can't remove base load power plants because they need them for times when solar and wind output are low, and 'peaker plants' are incredibly expensive. (which are activated in minutes, instead of hours/days) By adding battery (like the 100MW project in Australia) they can remove a few older base load plants, and handle spikes with batteries, instead of peaker plants.

Not being a power engineer, I'm still wondering if/when somebody is going to try to build a grid capacitor bank. Traditional advantages: long lifespan, high charge/discharge rate, low complexity. Traditional disadvantages: large, heavy.

Maybe the cost doesn't work out or something, but seriously, a fixed land power station seems like the ideal use for caps.

They're fundamentally DC, but so are batteries. I wonder if you could make yourself a massive LC tank, and bypass conversion losses...?

Wouldn't it be! There are some interesting issues though with capacitors (my current favorite are graphene ones).

At the end of the day, we're talking about charge waiting to be used sitting around in a capacitor. So looking at how much charge and what are the ramifications of that charge 'at rest' as it were, are really interest.

For example, did you know that if you charged yourself negatively with a few dozen Columbs of charge (in a vacuum) you would float off the ground? You would find yourself repulsed from the earth (which has a huge store of electrons holding negative charge). If you tried it in air however you would find yourself the victim of an extremely vicious lightning attack as the positive charge in the air helped itself to your electrons to balance itself out!

Part of the issue of trying to hold so much charge is that as raw charge, it actually exerts quite a bit of force. It can lift you off the ground, it can pull capacitors toward each other, it can deform the very structure you have created to contain it.

The other issue is keeping it from its mate, if nature abhors a vacuum she really really hates two opposite charges separated by a small gap. You need a really good dielectric separating your charge. You can't use air unless you have a lot of separation and the more separation the less charge your capacitor can hold. So the ideal dielectric would be the evil twin of graphene, one atom thick and impervious to any charge transfer at all[1]. The compromise is you can't hold as much charge (which keeps the voltage potential down below the dielectrics failure point) and you are back to using a lot of space.

Batteries in this case work because they store the charge in small chemical compounds that act as 'buckets.' The process of moving charge restructures those compounds taking an electron or two and leaving behind a different chemical structure or an empty bucket. This is a "win" because you never have to hold so much charge in one place that it is either acting mechanically on the mechanism (beyond the chemical bonds) or threatening to convert your insulating dielectric into an unwilling conductor. The down side is that assembling and disassembling the chemical compounds is an imperfect process at best.

Ideally, a grid scale capacitor would have some sort of mechanical/physical way of automatically organizing trillions of small individual capacitors which could be processed through and drained or charged as the needs required. That would make them not quite 'ideal' capacitors, capable of delivering all of their charge in one go, but it would allow you to side step the mechanical and dielectric challenges. You would also avoid the challenge of having a chemical transition that was not be 100.0% reversible.

I am always interested in reading papers on interesting research in this area. There are a couple of labs doing work on 'liquid' batteries where the electrolyte can be charged externally through one chemical process and discharged in the battery through another. Graphene capacitors are also pretty cool but they still need a better dielectric and a way of creating them cost effectively. Patterning a few billion connected in parallel seems to be a research target to try and avoid some of the high K issues. But there are many graphene labs and not many are focused on any one thing so it is harder to find.

[1] Even with that you'll get tunneling as the electrons find their probability function landing on the other side of the dielectric, nothing is ever perfect!

Doesn't the grid already use capacitor banks and reactors for power factor correction?

A bit dated (2011) though touching on the economies of power generation, "The High-Stakes Math Behind the West's Greatest River" ( https://www.forbes.com/sites/jonbruner/2011/10/20/the-high-s... ) is an interesting read.

From the NYT article about Germany:

> At the same time, other mainstays of the country’s electricity supply, especially some coal and nuclear power plants, are unable to dial back quickly enough, leading to negative prices on electricity trading markets.

From the Forbes article about the Columbia river (Oregon / Washington):

> issue is what happens when too much electricity is on offer. The enormous supply of hydroelectricity during spring runoff can push electricity prices to zero—the BPA gives away electricity to local utilities for free when it’s forced to produce more than it wants to. Since wind producers enjoy production subsidies, they can push rates below zero, effectively paying other utilities to switch off their generators. Last winter, the BPA told wind producers under its balancing authority that it wouldn’t pay negative rates to them during high-water events.

This gets more complicated when you also take into account the non-power constraints on hydro generation. Environmental concerns limit how much water can go over the spillway (which hyper-aerates the water and increases turbidity... which is bad for the fish. http://www.oregon.gov/deq/FilterDocs/Coltmdlwqmp.pdf gets into this including the water standards act.

> The concentration of total dissolved gas relative to atmospheric pressure at the point of sample collection shall not exceed 110 percent of saturation, except when stream flow exceeds the ten-year, seven-day average flood. However, for Hatchery receiving waters and waters of less than two feet in depth, the concentration of total dissolved gas relative to atmospheric pressure at the point of sample collection shall not exceed 105 percent of saturation;

The interconnectivity of all of these factors is quite interesting to me and one of those things that is much deeper than a simple management of the power market.

I’ve always wondered: is it not possible to simply “unplug” some of the turbines from the grid? Would an “unplugged” turbine that was still spinning result in damage to its self?

Turbines have brakes, you can stop it. Usually it's done to prevent it from spinning too fast in strong winds.

The problem is that green energy subsidies are paid usually per kWh regardless of the need. They are often way more than the energy price.

So even if your energy price is negative 2cents/kWh, and your subsidy is 10c/kWh then it makes sense to still run despite it causing near carnage on the grid.

And all these contracts are very long terms (20-25 years), so no easy way to change terms.

The energy does have to go somewhere. The natural solutions are speedup and friction heat, so, yes, I'd guess they do self-damage eventually.

So, I work in this field, and I have to find it really annoying to see the NYTimes miss the big picture.

The price for electricity tomorrow from 12 to 1 was set in the Day Ahead Market already, by all the participants (generator owners, utilities, big consumers.) At that market (making up numbers for the sake of explanation), let's say the utilities together bought 22000 KWH for that one hour. The amount of money changing hands is quanitity times price, let's say at $30 per KWH.

12 o'clock comes around, and for whatever reason, consumers are just not flipping enough switches and consumption is 20000. Now at the Real Time Market, money changes hands to get enough generators to dial back production, and enough big time consumers to dial theirs up.

Some times utilities don't buy 100% of their power on Day Ahead, taking the risk that they can get a decent deal at Real Time for the small amount of top-up they will need. SOmetimes they overbuy because of bad forecasts. That's when negative pricing kicks in.

Back to our example: Consumers only need 20000KWH for that hour. So 2000KWH's worth of dials need to turn. The people turning the dials get paid for it, at that negative price.

But the amount of money changing hands is small compared to what happend the day before when forecasted power was scheduled.

TLDR:This is not a big deal.

I'm a bit shocked your first hand explanation was down-voted. Facts should be appreciated even if they do not fit what one would prefer to be the case.

Another fact bit: Germany electricity retail prices were forecasted to go up next year. There is a fair amount of subsidizing of the build-out of renewable energy still going on. Also the network is not geared towards the new energy source distribution and requires investments for which consumers are billed in part up-front before seeing the benefits.

Another fun fact: The subsidies have angered the liberal party (which has become the bearer holder of liberal markets ideology and is anything but left). To stop the build-out they have started putting up significant building permit regulations in NRW, a state where they have recently risen to power. Explaining how the restrictions on land owners fit with their platform requires a few mental twists.

I'll admit it was not my best written comment I was rushing to catch a plane.

BTW, here's a live picture of the New England power market, both real time and day ahead. Older nuclear plants require a day's notice to change their power output, so day-ahead is the norm, but some markets also arrange purchases n hours ahead where n < 24 as well.

https://www.iso-ne.com/isoexpress/web/charts/guest-hub?p_p_i...

Negative prices occur all the time in the US. Not every day, but often enough when load is low and the wind is blowing. As more and more renewable are built, this will occur in increasing amounts. We still have to have non-green generation online as wind and solar can massively fluctuate. For the time being, the state commissions help out the utilities via legislation and increasing rates. This isn't some conspiracy, but what you do if you want available power 24x7.

Perhaps its time we started to design power-consuming devices to take advantage of fluctuating electricity costs. That would be one application of "the internet of things" that I don't immediately find creepy and pointless. Alternatively, it could simply spur the private investment of increasing battery technology as consumers would have an incentive to simply charge up their own energy supplies to get a reduction in their overall utilities bill.

Commercial buildings typically have a "demand charge" based on your peak energy usage, plus different electric rates for on/off peak hours. Some building systems have already tackled "load shifting" to move energy demand to off hours.

One common method is "cold storage" where you run chillers overnight to store a bunch of coolant or ice in tanks and use that for your air conditioning during the day.

> "Perhaps its time we started to design power-consuming devices to take advantage of fluctuating electricity costs."

If your goal is to make money, then sure. If your goal is to reduce the damage caused by burning fossil fuels, I'd suggest reconsidering.

A better use of these negative prices is reducing the number of actively used power stations based on fossil fuels. We would need to keep them until further load balancing capacity could be introduced (i.e. until we no longer had the need to turn the polluting power stations back on). The ultimate goal is a flexible power grid that kept environmental pollution to an absolute minimum.

If my IOT freezer could reduce the temperature of the freezer by a further 5c when power is negative and let it rise a couple of c when price rises above 1 standard deviation from the median price then the price signals could be used to modulate demand.

This would save me money, and reduce demand on the grid when there is no renewable energy. My freezer would effectively become a battery, storing energy as a reduced temperature. Multiply this across all households and add in other devices like tumble driers and you could have a real impact.

This approach is used for air conditioning. When power is cheap (at night), a building's air conditioning system freezes a large block of ice. During the day, the ice is used to cool air which is then circulated in the building rather than drawing power to cool air through a traditional air conditioner.

http://money.cnn.com/2013/07/30/news/companies/new-york-ice-...

> "you could have a real impact"

You could have a real impact on what? Your wallet?

My point is, we ultimately want to reduce demand on non-renewable sources of energy. With that in mind, running additional devices to soak up the excess demand of the current grid is a mistake, as it hides the fact that not all the electricity was truly needed, and therefore gives no incentive for the electricity producers to reduce supply, which means they'll keep running all the non-renewable power plants they currently do.

You may think that the actions of an individual don't add up to much, but collectively they do, so small acts of reducing electricity usage can have a real impact, both on your wallet and the environment.

Crypto mining (bitcoin et al.)/incentivized node hosting will figure this whole thing out.

But seriously, civil power generation/storage via solar will allow folks to escape the patchwork rules, regulations, laws, etc. that are already here and coming to a jurisdiction near you. Power utilities may not buy your power but your mining rig will make you crypto that will allow you to escape that control.

We need ways to store the excess power. Otherwise, wind and solar use will have their limits. Fossil fuels will need to power half the grid.

“Battery storage capacity, meanwhile, is not yet advanced enough to take in all of the excess generation.”

Agreed, your comment is accurate. It will be quite a while I think before we get there (my guess is 20 years)

This is a process systems issue more so than a market one. The inflexibility of traditional energy sources and unpredictability of renewable energy sources coupled with the inability to store energy conspire against the balance of supply and demand. When there’s too much energy suppliers can’t simply shut it off on a daily basis nor can they store is for excess use and so to deal with market forces they allow prices to go below zero which helps no one, especially not the consumer. What if we created more flexible energy distribution channels from energy stored and not generated daily? Is this possible?

Just as a curiousity. Is this negative power often enough to make a business model of battery supply to the power system feasible?

I mean having a company with a massive bank of batteries. When power goes negative they try to take as much as they possibly can from the network and when it goes positive they try to sell it back at the higher rate. Essentially win-win. You only power up on negative days and you sell when you make money, otherwise you just sit on it. And since you were paid to take the energy in the first place losing it over time when you don’t sell isn’t a loss because you didn’t pay for it at all.

I've also heard that negative power prices are an indicator that excessive subsidies are present in the market. Is this true? I think I saw it here on HN in the comments a year or two ago when it happened in Texas.

Yes, of course. The German energy grid is one of the most incredibly (over) subsidized grid in the world. Incredibly low wholesale costs, incredibly high retail costs. The difference is the enormous amount of subsidies paid to green energy producers.

If there weren't subsides in play everyone would be going bankrupt.

That's a damn shame. I'm "pro whatever is cheapest" energy, and theoretically, that should be renewables like solar and wind. In my opinion, subsidies hurt more than help after the R&D phase of deployment. It makes an investment into the technologies complicated and dependent on regulatory climate.

And on German news sites: http://www.spiegel.de/wirtschaft/service/strompreise-steigen...

Strom wird zu Jahresbeginn noch teurer

Die Strompreise sind hoch wie nie - und es geht noch weiter: Das Verbraucherportal Verivox rechnet für das kommende Jahr mit einem Preissprung. Obwohl die Versorger Nachlass geben könnten.

Why did they go negative instead of zero or just very low? Why did the power company encourage people to needlessly waste electricity? Do excess generated electricity cause problems for the companies? If yes, won't shutting down some generators get rid of the excess?

This is my first questions to the headline. The answer is not obvious for me, but I can't find an answer in the article.

Electricity should be consumed to avoid overload on net. Shutting down generator then starting it up again could be more expensive.(labor, excess amortization due startup etc)

All the electricity produced must be consumed, roughly at the same time. It has nowhere else to go.

Shutting down generators is a process that may take hours (or days if it's nuclear) and may be expensive.

Ah. Can't you just press buttons to turn off generation on windmills or solar panels for example?

You can disconnect solar panels, yes. You can disconnect a windmill turbine from its generator too (what carries a small cost).

You can't just disconnect thermal solar generators, but shutting them down is relatively fast and cheap.

When the price goes negative, it's usually because consumption is smaller than the coal + nuclear supply.

Or hydro can't put that much over the spillway because of regulations (environment, down stream flooding, etc...) - it has to go through the powerhouse.

Or (for hydro again), there was a release of water upstream in anticipation of demand (it takes a few hours to go from the Grand Coulee to the bottom dam) and that demand didn't appear (or other sources produced more - such as a sunny and windy day).

Hawaii and its island power issues also has the "well, you can turn off the centralized solar power systems, but the distributed residential ones are difficult to curtail."

Creating the electricity market was one of the biggest mistakes humans have ever made because it created the potential for Enron. And now we don't even question the existence of the market. There's a lot of good history to discover here. The merchants of power by John Wasik is a good place to start.

Do consumers really get paid to consume? Never heard of anyone having a negative item on the electricity invoice.

These are negative wholesale prices, it's in the internal electricity market, which consumers don't really interact with.

No, residential customers still pay retail. I believe only major industrial customers ever see the negative wholesale rates.

Ironically, the "related coverage" article was how Puerto Rico was still without power..

Article says price was $60/megawatt-hour, and that the inversion lasted "for much of Sunday and the early hours of Christmas Day".

How much current can a typical industrial user draw from their connection?

Maybe there's a market for large internet connected resistors.

Isn't this supposed to be solved by better batteries? I'm confused why the supply of energy matters, unless there's a limited amount of time to use it.

I'm not an electrical engineer, so if anyone understands this better, please correct me :-)

Batteries simply don't really exist to store grid level amounts of energy. You have to stack lots and lots of batteries which costs lots and lots of money and still only stores something like ~10 MW when we have 1500 MW coal plants. Electricity is used immediately, so we really can't economically store it in the levels we need. In the future (this is just starting to occur), large batteries will charge (as a load) when the price is low and discharge (as a generator)when it is high which allows the owner to make money and helps the grid as these resources can provide power nearly instantaneously. Right now they're small and few in number, but they will get bigger and more prevalent assuming battery technology continues to get better.

-Source electrical engineer in this industry

Isn't 10 MW a unit of power and storing energy would be in MWhs or Joules? I understand that the grid needs to balance the power it is using, but to provide that power over time you need to store energy. Surprised an "electrical engineer in this industry" would use these terms, but maybe I just don't quite grok the lingo. An explanation would be great.

You are correct, I used to work with batteries for 3 years, people count capacity in Ah or Wh, but never in W. More often in Ah.

Why Ah instead of Wh? Because V is constant, making Ah proportional to Wh. Wh = Ah * V; V is the rated voltage the battery is designed for (12V for instance). By definition the capacity is how much energy you can get out of your battery at the rated voltage under standard temperature at a standard discharge rate. Voltage will go down as the battery depletes. When the voltage output is too low and cannot power the circuit anymore we consider the battery empty. Therefore, as we stop using the battery when V is too different, we can consider V constant over the usage period.

So Ah = k x Wh, k = 1/ V being almost constant. Ah is a easier unit to manipulate in charge rates, lifecyle etc.

One important note: due to technology limitations, energy one can get out of a batter greatly depends on the discharge rate (+-50% energy) and environment temperature (+-50% energy). Capacity cannot be taken literally as how much energy you can store and restitute. Design a grid that can still operate with lower voltage, charge at a lower rate and operate in hot weather and you suddenly have way more capacity (x3).

You're correct, but in the industry we really just talk in terms of Power at the transmission grid level and usually in millions of watts or MW. So if a coal plant is currently generating 2000 MW and you have a battery that can only consume 5 MW or 0.25%, then that isn't very much storage. Put another way, let's say the load in your region is 60 GW and you have 200 MW of energy storage. That is only a tiny fraction of storage relative to what the demand is.

So the main constraint on the battery is throughput, not storage capacity?

Nope, the main issue is indeed the fact that it can't store a whole lot of energy (also important that they can't maintain a high output for too long), but we still talk in MW as that is what we're primarily concerned with (MW flow on a line going over the line's rating...not having enough generation (MW) to meet load (MW)...etc). Saying a battery can't store enough MW isn't scientifically accurate, but it is the slang of the industry if you will. If you worked in the water industry they're probably very concerned with water flow rates. In high voltage transmission we're concerned with the flow of power (MW (real power) & MVAR (reactive power))

You have the read in the implied math about the length of the demand cycle and how long it takes to fill capacity at the quoted throughput. for example, 12MWH battery can handle 12MW of peak throughput for 12 hours, and then discharge over 12 hours of trough throughput. "12MWH" and "12 hours" are ouputs to the battery formula, "12MW" is the output.

Currently, it seems like thermal storage is likely to achieve widespread grid-scale capacity before battery storage.

But there are battery storage systems that have capacities over 100MW, so even today it's not just in the 10-20 MW range.

How many 100 MW batteries exist and how economical are they? 100 MW is much better than 10 MW, but still small if you look at the current load in MISO, SPP, PJM, ISO-NE, NYISO, CAISO...etc. So we have a long time before we can get rid of all fossil based sources...and even then how long can that battery provide 100 MW?

The new Tesla installation in Southern Australia is 100MW. I don't know the specifics, but the combined battery capacity of the two big Southern California utilities is at least 120MW, including one 80MW installation (also by Tesla). The three big CA utilities are mandated by law to have at least 1,800MW of battery storage by 2024.

None of this is intended to provide a consistent source of electricity. They're intended to fill in the gaps from uneven renewable energy production or other disruptions. Apparently, it's been working very well in Southern Australia.

Thermal storage is a promising solution because it will likely end up being considerably cheaper than batteries. The most promising type is salt storage for concentrated solar plants. They can potentially store enough heat energy to maintain consistent output all night long. Wind doesn't get that same deal - currently unused Wind power can only be stored as electricity.

Out of curiosity, why isn't "physical" storage used more?

Like pumping a bunch of water up high, or spinning a big ass flywheel.

I understand a flywheel might not be realistic at these scales, but water pumping seems like it could scale stupidly high.

Pumped storage has the same problem as hydro, namely, the number of places suitable to placing the large reservoirs required by it is limited.

Pumped storage is actually quite common where you have a lot of dams. The Bonneville Power Administration in the upper Westside of the US can essentially press a button and have quite a bit of power due to all the dams.

Yes thats exactly correct. There is a balance between what is made and what is used, it must balance out. So it takes time to ramp up or ramp down, or even control ramping when the wind is blowing...it seems. So to keep that balance (i guess) at times it makes more sense to drop the cost to below zero.

At least that's what i picked up from a youtube video about the topic a few weeks ago.

The article touches on the battery that is being used:

> In one case, it takes advantage of negative prices by being paid to pump large volumes of water into a mountain lake in Austria. When prices are higher, the company releases the water, using turbines to generate electricity.

This is Pumped Storage hydroelectricity - https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...

Pump the water up when the power is cheap, use the stored water in a hydro dam when the power is expensive. The storage capacity is quite significant and while not as fast to respond to the grid as batteries, its substantially faster than other power generation systems when wind or solar power generation dips.

I think the problem is that it's early days with larger grid-scale batteries, and deployments are limited so far, but I expect this will change quickly. One example project that's rolled out is in Australia: http://money.cnn.com/2017/12/01/technology/tesla-battery-sou...

It would be cool if there were some home automation devices that monitored power prices and they would atomatically turn on the washing machine and such when the prices went negatice + there was stuff to wash in the machine for example.

I don't want that when I'm not there to put wet clothes in the dryer. And although I once had a combination washer/dryer it didn't work well.

> What causes negative prices?

> Basically, when the supply of power outstrips demand for it.

What does this even mean? Why would demand for being paid to use power be finite?

It doesn’t make sense to view demand as separate from the price of consumption.

I'll ship you 100 tons of refined uranium, and I'll pay you $50 for it. But you've gotta be able to take delivery in the next 20 minutes.

Are you trying to make the point that consuming electricity is as difficult as storing uranium?

I’m not making a general statement about negative prices. I’m making a statement about being paid to connect a resistor to the end of a power cord.

Not as difficult, but consuming large amounts of energy on short notice is also not trivial.

"connect a resistor to the end of a power cord" is supposed to make it sound trivial, but operating the resistors needed for absorbing the extra power on the grid is a large scale operation with non-trivial safety concerns. Also, you need to own and maintain all that equipment, &c &c.

Of course it's much easier. If it was as difficult there would be big companies living just on properly getting rid of electricity.

But it being easier does not make it free. The price is negative exactly because it costs the generating company something to put a resistor at their side. If you have a resistor around that is cheaper, you can get some nice payment out of using it.

Why doesn’t the power producer just disconnect the generator from the grid? A turbine spinning isn’t a problem in and of itself.

I don’t disagree with you in theory, but in practice I don’t believe that it’s cheaper to send out power over the grid, and pay people to consume it, than it is to just not produce it in the first place.

The spinning energy MUST be consumed. Otherwise the turbine will accelerate until it breaks, what may take a block away from some city.

Powering down generators take some time, and powering them back up costs quite a bit (both vary widely from one tech to another). For short durations it is just cheaper to pay somebody to take the energy.

Someone needs to make a movie about this. Obviously starring Jason Statham.

https://medium.com/@datarade/the-germans-and-their-renewable...

and other countries still suffer from clean energy resources. Only because of economic interests for energy sales. In some countries the environment is being destroyed only for some hydropower plants, here is an example: http://www.ecoalbania.org/ebrd-confirms-negative-impacts-of-...

Yes, I think it's negative for me that the energy prices are rising.

I'm in Germany and the local news here is different from the Utopia I have to read on Hacker News and Reddit.

If you have to pay for the grid to take the electricity you generate, the sensible thing to do is stop generating it, even if your costs are all fixed.

The real question is would the bill in the end be lower like this or with a positive energy price, but no green-power taxes?

Now that we've seen negative interest rates and negative power prices, what's next?

So, is Germany going to pay me for mining BTC/ETH/XMR? :D

What kind of energy consumer adjusts their electricity usage based on price?

Seems like this doesn't apply to households - people will just switch stuff on when they need something, they probably don't even monitor prices. I'm guessing this is good for energy-intensive industries that have large battery storage capacity?

*didn't read, paywall

If they remade The Graduate, I think the key industry would be: Batteries

The fun thing is that three-phase EV charging is common in Europe. Renault Zoe even support 40kW+ charging.

Time to mine coins in Germany...

how is this sustainable in the long term?

if the energy companies are paying their customers, won't the companies run out of money eventually?

and if they run out of money, then won't they have to be subsidized by the government? and if that happens, isn't that basically people paying taxes, which go to the electric company, which go back to the people?

The companies here (not Germany) can afford to pay for the right to put electricity in the grid because they are guaranteed a fixed compensation by the state for all the renewable electricity produced – at a rate that's several times the market price. Thus even at times when they have to pay, they still make more money than if they shut down the plants – which itself would just cost money.

- The negative prices are always temporary, bounded in time and price by the cost to spin down a generator

- Only the major industrial customers actually see the negative rates (residential customers are still paying retail)

- In many regulatory environments the electric utility and power generators are different companies, so only the generators are at risk of losing money and shutting down plants

Yes, very large government subsidies created the current market situation in Germany. But, note that "very large" is only relative to typical subsidies of wind and solar in other countries. Also, all electricity markets in developed countries are pretty much completely regulated and the economics of electricity are determined much more by a combination of regulation and indirect subsidies than they are by anything remotely resembling a simple definition of market forces.

In the United States, for example, we have an extremely complicated mixture of local and state-level economic, infrastructure, and supply regulations, environmental regulations that are mostly federal (though also state), zoning, eminent domain, and other kinds of permitting. Then, alongside all those, we have massive subsidies of electricity distribution infrastructure, extraction of coal and oil, transportation, and "homeland security." Finally, we also have relatively small subsidies for wind and solar.

Germany made a policy decision some years ago that public subsidies of renewables would create large positive social externalities. So, yes, the money goes around in a circle, but -- to over-simplify -- in theory creates more money (technology development, improved resistance to economic shocks, jobs, public health) and better outcomes of various other kinds (public health, reduction of climate change risks of various kinds, reduction of risk from nuclear plants, perceived electoral advantages by the political parties in power) as it goes around.

Germany has

1) one of the highest prices per kWh for the normal consumer

2) prices are still increasing http://www.spiegel.de/wirtschaft/service/strompreise-steigen...

3) produces more CO2 than France.

So what's the news?

1) Related to how the EEG is more a subsidy of energy-intense industry rather than regenerative energy, at the expense of the consumer.

2) "Die meisten Stromanbieter halten an ihren aktuellen Preisen fest, und 78 Versorger senken ihre Preise sogar im Schnitt um 2,2 Prozent. Zugleich aber heben 64 Versorger ihre Grundtarife im Schnitt um knapp drei Prozent an" --> Most utilities keep their prices fixed, 78 reduce prices by ~2.2%, 64 increase by ~3%.

3) More than France (nuclear), Spain (nuclear, wind), Sweden (nuclear, hydro) and Norway (hydro). It is unsurprising that countries heavily invested in nuclear and hydro produce less CO2.

Germany's energy policy is far from perfect, but probably one of the most future-proof in Europe (which costs money). France will have huge issues with decommissioning in the next decade; nuclear is not a silver bullet.

"Germany's energy policy is far from perfect, but probably one of the most future-proof in Europe (which costs money)."

Really? Germany has one of the LEAST future proof energy politics. I would like to see a country that actually has more than a 2 years energy plan and would invest in something meaningful, like Thorium reactors.

Germany invested into Thorium in the second half of the last century. Turned out to be a bad investment.

Because it was not developed to the final stage?

Worst investment yet, was solar Energy.

PS: Fixed this for you. Sorry, did not know you are a bullshitter!

It started generating electricity on April 9, 1985, but did not receive permission from the atomic legal authorizing agency to feed electricity to the grid until November 16, 1985. It operated at full power in February 1987 and was shut down September 1, 1989.[1]

https://en.wikipedia.org/wiki/THTR-300

Germany's energy policy is fucked:

https://icmvv6qxwpktq0do-zippykid.netdna-ssl.com/wp-content/...

Inverse Robin Hood. Take from the poor, give to the rich.

Of course, when Capitalists read this article, it is bad news for them because they can no longer make money off people. Better stick to oil and coal for maximum profit! #MAGA

Germany actually needs to pay other nation states around it to take the energy they can't use (they don't want it). Using the energy intelligently (demand managment) only lowers smoothes the energy spikes of renewable energy only by 11% (when you do it monthly, on a daily base its nearly nothing.) Pump stations are a good idea but the amount of pumpstation we would need only for the current German electricity demand exceeds already what you could build in all of Europe.

Currently when there is a lot of wind we stop coal burning power plants and the government pays its owner for what they could have been produced in that time. Because stopping the plant makes it more inefficient, there are some fix costs around it to operate it.

See this interesting video about the topic (its in German sorry): https://youtu.be/ZzwCpRdhsXk

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