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Comment by maerF0x0 | Hacker News Reader

> It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity.

Good. That's a well functioning market economy. Those who make poor investment choices need to feel the sting of losses else the market fails to work correctly.

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Low/negative prices (caused largely by various regulation/policies) have been putting a lot of economic pressure on existing nuclear power generation - sometimes causing it to close [1]. Generation that is largely replaced by natural gas plants. So maybe this very non-free-market state is actually not helping make forward progress on what many would consider to be one of the most important issues relating to energy - climate change.

[1] https://www.forbes.com/sites/jamesconca/2016/05/16/natural-g...

An energy industry where the bulk of energy production is wind & solar with natural gas plants to handle peak demand spikes is significantly more environmentally friendly than an industry where the bulk of production is oil & coal with a few nuclear plants thrown in.

Yes, but we want the coal to be displaced. Not the nuclear.

Coal already has been displaced. The reason there's less of a downturn is because there's a lot less of it to begin with:

https://www.iso-ne.com/about/key-stats/resource-mix/

There's 20x more nuclear than coal energy in New England. Proportionally, the drop in coal energy (~50%) was a lot more than the drop in nuclear energy (~15%).

Neither of the alternatives you propose are what we currently have or are where we are currently heading (IMO). As long as we are speculating - I think a future with good storage tech and 100% solar+wind would be better than one with gas plants thrown in the mix. If climate change is as big a deal as people claim, than why would we sacrifice existing non-carbon-emitting capacity for natural gas? We don't currently have anything remotely resembling a largely renewable grid nor the technology to even accomplish it at scale.

The article suggests that solar + wind with natgas for peaks is exactly where we're headed. At least in the regions being talked about (mostly Europe + California).

The Forbes article you linked is about New England. New England will probably be the last region to get decent renewable adoption. Solar panels don't work as well because they're far north and get a number of cloudy days, the winds are not that strong outside of the Cape Cod and certain parts of the Maine shoreline, and there are few rivers that are suitable for hydro.

Natural Gas "Peaker" plants are VERY expensive to run. (Mainly because of their low utilization compared to high costs). In many cases, battery storage is already cheaper than peaker plants.

Regarding the cloudyness... Has anyone ever tried to levitate photovoltaics into the stratosphere? Blimpy-space-elevator kinda thing? Is such a thing even possible?

I feel like it's far easier just to transmit it 1000 miles or so from a sunnier place.

Not necessarily, because 1000 miles of a transmission line is a lot of metal, land, construction, and electricity losses.

Unfortunately, a power station at 100-200 miles above Earth, where sunshine is eternal, and which is relatively accessible, will not stay above the same spot, and GEO is way high (22k miles) and thus even more expensive to build at (and already pretty crowded nevertheless).

I looked into this in a lot of detail about 5 years ago. There were a couple of studies, and one somewhat-active company I saw (Stratosolar - didn't seem to be very well resourced/capable).

My main focus was on aerodynamic modelling and panel positioning methods for various structure sizes, and the resulting LCOE. Main issues I found were: - Weather conditions in the stratosphere aren't well understood; most of the time pretty benign, but there are a bunch of extremes which could have a significant impact on the structural requirements. - It's basically a tradeoff of panel-cost/conventional-installation-cost vs aerostat-cost/non-conventional-installation-cost. The aerostat is definitely not going to be cheap, so having your panels on an aerostat has to result in a bunch more energy per PV-element than having them on the ground. - Having the aerostat option come out on top gets more difficult as PV gets cheaper. Let's say you get 2x energy from PV on an aerostat vs installed on the ground. That means the aerostat option will be competitive with the ground option as long as the total installed cost (per watt) is less than 2x the terrestrial installed cost. If the terrestrial installed cost reduces by a factor of two (and it's reduced by more than that since I did the analysis!), you suddenly have to reduce the marginal cost of your aerostat option by 50% just to remain competitive! - To be economic and sufficiently robust to expected weather, these structures have to be enormous; the architecture that seemed most promising to me (from memory) was cylinders of length 4km and diameter 1km (roughly 1GW electrical output peak, more like 500-600MW annualised). They're at least semi opaque, and are tethered around 20km altitude (and can drift within a ~10km radius around the tether point). At that altitude they're visible from several hundred kilometers away, and they look huge - 15x the width and length of the largest cruise ships. - It doesn't help THAT much with seasonal variation away from the equator. Summer output in northern europe is still 2-3x winter output, so you need long term storage or an energy dump.

So... I think it's super interesting, but I don't think it'll ever be commercially attractive vs either terrestrial installations, or space. The main nice thing is that it's still pretty easy to get the power back down to earth with high efficiency... in contrast to orbital solar.

Gah, what a formatting train wreck :-/ sorry...

Don’t apologize, this is super informative! :)

I cited natural gas being used for baseload power. In the last several years, gas has been installed frequently as baseload generation.

All I'm saying is that I think governments' approaches to incentivizing energy production are very suboptimal for mitigating (negative) effects of climate change. And negative energy prices are one of the red flags that this is the case.

FWIW, my understanding is that the bulk of the baseload natural gas plants are being installed as replacements for older coal plants that are being decommissioned.

Considering that the latest project to construct new nuclear plants in the USA nearly put Toshiba - like, the whole company, not just their power plant division - into bankruptcy, I'm not certain, on purely economic grounds, how realistic an option "more nuclear" is.

Toshiba was hit because they acquired Westinghouse, I remember reading that Westinghouse had some accounting irregularities before the acquisition that then Toshiba continued until recently.

I don't think it was the projects and the cost of them themselves but previous underlying problems in the companies.

The big problem was that Westinghouse signed a contract that put them pretty much exclusively on the hook for cost overruns, without any good way to get out of it. That explains why it hit them so hard, but it doesn't necessarily explain the cost overruns in the first place. A lot of that can at least be partially explained by other, deeper problems. For example, they kept reworking the design even after breaking ground, which seems symptomatic of the loss of engineering expertise in the field over the past few decades.

The whole saga has also led to two major manufacturers - Toshiba and Westinghouse - exiting the market, which I'm inclined to take as an omen that, at least in the North American energy market, a lot of these deeper problems can be expected to worsen instead of getting better.

I think battery storage peaker plants are where we are going, like the one in australia that tesla built.

> New England will probably be the last region to get decent renewable adoption. Solar panels don't work as well because they're far north and get a number of cloudy days...

Wrong. Most of Europe (especially Germany) is actually at a higher latitude than New England.

...but tends to be windier. My understanding is that renewable use in Germany is largely driven by wind power.

Germany has 5 times as much solar capacity as wind power, and the highest PV watts-per-capita in the world.

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

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

The chart you linked to shows wind at 45GW in 2015 and solar at 41GW in 2016, and this page [1] shows net generated energy in 2016 at 77TWh for wind and 37.5TWh for solar. Are you sure you weren't looking at the "New installed capacity" for wind and comparing it to the total capacity for solar? (The solar numbers are admittedly bigger than I expected to see, though it appears that wind is growing 4x faster than solar, which is the opposite from the U.S, where the installed wind base in greater but solar is growing 2x faster.)

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

I'd much rather have solar/wind/nuclear than solar/wind/gas.

I would too, but that's not a possible combination. The issue is that at any given moment, the amount of electricity produced must equal the amount consumed. Solar and wind have production curves that are defined by the sun and wind, and typically peak early morning (for wind) and mid-day (for solar), which are often not the times of peak demand. So when everyone turns on their lights, TVs, stoves, and laptops in the evenings, there needs to be a quick-responding power plant to meet the excess demand. By far the preferred technology for this is a natural gas turbine, because it's one of the few technologies that can adjust its output within seconds. Nuclear power plants take several hours to days to respond to shifts in demand, because the control rods must be moved, the nuclear chain reaction must speed up, it needs to generate more heat, that heat needs to boil water, and the steam needs to make its way to the turbines.

There's more information in the wikipedia pages for "base load", "load following", and "peaking" power plants:

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

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

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

Interestingly, solar-thermal is apparently coming online as a potential technology for peaking power plants, which could reduce the need for natural gas.

Afaik the problem is that the currently installed nuclear generators cannot stop their operation in the middle of a fuel cycle.

The green fantasy of renewables + nuclear doesn't work with the current generation of nuclear power plants. US nuclear plants either run at 100% power, or they are shutdown for refueling. That's pretty much the only way they are economical.

HN seems to have some macho fascination with nuclear power. Or at least that's the only reason I can think of why people would advocate for it, considering nuclear power is simply far too expensive.

Yes, maybe the population at large lacks statistical understanding and needlessly fears nuclear power[0]. But it's still too expensive, as demonstrated by the complete lack of new construction. It'd be rather strange for every single energy company and government to succumb to irrationality, simultaneously.

Even solar + storage has now crossed nuclear's costs. I

[0] And they may just have all read 'Black Swan'

I don’t know why you’re getting downvoted, it’s 100% about cost. It’s far too expensive, and the ROI horizons are far too long (multiple decades)

Edit: and that’s only if you cut a nice deal where the state picks up the insurance tab, because private insurance markets aren’t going to.

> I don’t know why you’re getting downvoted

Probably the oddly aggressive "macho fascination" bit.

> macho fascination

What does this mean?

If negative externalities such as carbon were properly priced, the dynamics could possibly change (guessing, I'm not quite sure what a fair price on carbon would be, and what the difference in price between nuclear and natural gas is)

Investment into traditional generating capacity is not a "poor investment choice." To the contrary, it's a necessary one. For better or worse, a fundamental premise of modern electric grids is that they should be able to meet all needs essentially 100% of the time. Electrical markets are then built on top of that basic guarantee.

With current technology, that means you need sufficient generating capacity from traditional sources to cover nearly 100% of your peak capacity needs--otherwise, on a day where the wind isn't blowing and the sun isn't shining, you can't produce enough electricity.

Current renewables subsidies results in a broken market structure: the market needs conventional generators, but the subsidization of renewables makes it unattractive to build those generators. A "well functioning market economy" does not eliminate incentives to produce products that people need.

There are two things happening, both because of the negative externalities that traditional sources produce, but aren't factored in to prices. One is subsidies, the other is source prioritization both of which favor renewables. Plants that can provide that peaker gap on windless+cloudy days should be rewarded by the market by very high kwh purchase prices, but that's all. The current benefits that renewables receive are aligned with the true costs. Alternatively you could replace the prioritization and subsidies with a heavy carbon tax on traditional sources but the result would be the same.

> The current benefits that renewables receive are aligned with the true costs.

So energy storage / building heavily underutilized plants is free in this theory?

No, it comes at a severe cost. The upside is that it removes the negative externalities of legacy plants.

Not only is this good, this is great! Hitting negative energy rates just incentivizes more and better storage technologies to accelerate. We need more grid-storage online fast and nothing could incentivize storage tech more than being paid both ways for electricity management. Get paid for storing it during the day and get paid for delivering it at night. It's not the best case for power plants right now, but once this new grid storage market settles the double-incentive will go away and things will even out a lot more.

I think that negative prices are prima facie evidence of a market economy not functioning "well".

Negative prices seem to me to be to be equivalent to fines for doing things that aren't socially useful. If they proliferate, that's a suggestion something is out of whack.

Only if they stay negative

That's reasonable. The headline says it's spreading though.

It's spreading because the market is oversatured with renewables because of government subsidies. A sound investor would stop (or go bankrupt) when the negatives outweigh the positives.

Subsidies seem to be on the decline. In fact, I was just reading that due to the Chinese government cutting back, people are predicting PV prices will plummet in the next year.

In this case "spreading" means "happening more often". And you could have a stable rational market where power prices go negative for an hour every day.

It's certainly not a free market economy because almost every electricity utility is a state monopoly.

When markets get "out of whack" it's almost certainly due to government regulation. In this case, it's the government setting fixed electric rates for consumers.

It depends on whether or not someone is able to demand delivery at that price and what other forces are in play. i.e. presumably there are regulatory requirements that some minimal amount of capacity must be available as generators typically can't quickly spin up based on the whims of the sun/wind... but what if the generator provides it and there are no takers which a zero/negative price would indicate? Of course that's not sustainable for long it becomes a persistent situation: at some point the generator must be subsidized, or can absorb a loss over brief periods for the 'privilege' of being a provider the rest of the time, or goes bankrupt.

Running parts of businesses at a loss isn't unheard of provided the governments responsible for overseeing it are OK with and/or mandate it (a wide variety of services to rural customers here in the U.S. comes to mind) and the impacted business makes up for the loss elsewhere.

"Running parts of businesses at a loss isn't unheard of"

A negative price seems fundamentally different than just running at a loss though.

I admit I’m confused by negative pricing. Presumably solar can be curtailed for free.

But with something like wind, I think production is all or none, and switching back and forth is a bit slow. It’s more economical to pay a tiny amount to get someone to dump the power.

On a smaller scale, it’s common for off-grid hydro to have a giant heater waste power as needed.

Negative prices a perfectly possible in the ideal free market. The market of course requires the overall prices be positive, but given the very low ongoing costs of wind/solar it makes sense to build even if prices are sometimes negative - the alternative is to shutdown, but then the wind/solar operator needs to do something with that power, which in itself has costs. So long as the times the times of positive prices balance out you are fine with some negative.

In addition, there is probably some advantage to encouraging other parties to develop uses for cheap power as part of long term planning.

Of course as others point out nothing is every an ideal market.

You are right, although it's not clear for me if you refer to the old/traditional coal plants or not. If you refer to the coal plants I agree, the 'negative prices are prima facie evidence of' coal plants 'not functioning "well"'.

For many utilities, it's not as simple as that. They're heavily regulated and their prices are generally set, capped or otherwise limited to give them a certain percentage profit. They often have to get price increases approved by their regulators. If they have debt outstanding on underperforming gas power plants, they may need to make this argument publicly so they can adjust pricing.

You're referring to distributors, the energy companies that are responsible for managing the wires/gas pipes to your house (Think ConEd, EverSource, etc). This effects the energy generators, which don't have prices regulated but are still regulated by FERC.

> Good. That's a well functioning market economy. Those who make poor investment choices need to feel the sting of losses else the market fails to work correctly.

You say that - up until the day there is a brownout on a cloudy, yet boiling hot day, because there is little sun and no wind, and no one wants to build non-economical power plants.

FTR i also believe there should non-regulated prices. If the price on that day goes up to $1/kwhr (or whatever) so be it. The market prices incentivises the right solutions to problems

eg: batteries and home generators for cloudy days for those who _must_ have power, but those who see the price is $1/hr will turn off their TV or dishwasher etc.

or maybe consumers will start to buy contracts from plants like "I will use 1K of continuous power if you provide it at 16c an hr"

Exactly - this will finally make them think twice about installing more generation capacity and will force them to consider installing battery storage or other solutions to fix issues on the grid.

These non-generation solutions exist, but utilities love to just install more generation because it's in their playbook and they don't want to innovate.

> utilities love to just install more generation because it's in their playbook and they don't want to innovate.

I'm curious, how did you reach this conclusion?

Utilities make a guaranteed rate of return (up to 10%) when they build new generation plants and when they build new transmission lines. This is payed for by rate basing the new costs to customers. The system works great for utilities because they know how to build these plants/wires and the get paid regardless of whether they are truly needed or not.

Local governments and state regulators have finally started to push back against and are now forcing utilities to consider new solutions to grid congestion. https://www.utilitydive.com/news/non-wires-alternatives-what...

Electricity isn't a great market. End-users with solar power are allowed to use the grid as a perfectly free battery, which is why everyone is dumping power on the grid at high noon.

Where I live its about 25c (of Australian Dollar) for 1kwh but you only get 7c back. So a real battery would be much preferable.

Due to subsidies, in the US people dumping home solar into the grid usually get back more than the market rate.

I don't think that's the case. Depending on where you are, you either get paid retail or wholesale rates, and still have to pay some monthly service fee regardless of surplus or deficit. I've never heard of any utility in the US buying solar production at more than retail rates.

> I've never heard of any utility in the US buying solar production at more than retail rates.

That doesn't refute the parent's claim of it being greater than the market rate. The residential retail rate [1] usually doesn't change, except on a long time scale, after regulatory approval, while the market rate changes intra-day, based on supply and demand.

If peak sun doesn't correspond to peak demand (and, from what I've read, it doesn't), those periods are where the utility could be taking a huge loss. For example, if PG&E has a customer in the top marginal usage tier is "selling" power at 25c/kWh when the wholesale market is selling it at 4c, that's a pretty tremendous loss.

[1] Often not even a single rate but a tiered one, so a heavy residential user could be "selling back" power at a particularly high retail rate, much higher than average.

> you either get paid retail or wholesale rates

So above market rates. Sorry, your 10kw of intermittent unreliable power provided at your whim into a random neighborhood grid is not worth the same amount per kwh as reliable base/load following generation. And that's wholesale.

Retail priced net zero metering is even worse - that's simply poor people subsidizing rich folks with solar panels.

Maybe the subsidization is ok overall due to the system changes it (might) bring about - but man it's bothered me for decades that rich folks who can afford to blow $25k+ on solar installs act so smug about net-metering - when it's them simply stealing from other ratepayers for their free battery.

> Where I live its about 25c (of Australian Dollar) for 1kwh but you only get 7c back

I've read about places that don't actually do "net metering" and implement this with two separate meters, one for inflow and one for outflow.

Is that the case where you are? Are there any time-of-use options available that might sweeten the deal?

> So a real battery would be much preferable.

Assuming it were free (even to purchase, with only charge/inverter efficiency losses), of course it would. However, as much of the discussion in the thread points out, storage is very capital (if not maintenance) intensive, even at utility scale.

It doesn't need two meters, you can just keep separate track of the times that the connection is a net exporter and the times it is a net importer.

That's true, in that, if the metering is purely electronic, the only thing "separate" would be two different readouts. For electro-mechanical metering, I'd still expect a need for two physically separate ones.

Regardless, substituting "readouts" for "meters" is irrelevant to my question.

Its a single digital meter.

For a few weeks we had the old style meter. It span backwards on a sunny day. So for that time period it was same rate in and out.

End-users who produce electricity aren‘t a problem for the grid, they produce electricity very close to where it‘s mostly consumed (typically they consume most of it themselves). Wind farms on the other hand are built where it‘s cheapest and yields are best, often far away from any relevant consumers.

With their own batteries for 24h+ (soon...), end-users will be the best thing that can happen to the grid.

> Good. That's a well functioning market economy. Those who make poor investment choices need to feel the sting of losses else the market fails to work correctly.

Unless it affects grid reliability. Energy is not just a market. It's something that underpins modern society and the modern economy. I, for one, do not want my power to go out at 7pm because demand is peaking, traditional plants had to close, and the sun is going down.

You've defined a rapid peaker plant, which no one is implying we should lose. The destruction of the market for this type of bad-actor legacy baseload is a market opportunity for those who can provide the services you're talking about. Whoever can provide it should earn a premium for doing it.

It is well functioning economy, but is it good for the environment, CO2 emissions in particular?

Because with negative electricity prices, the obvious "good" investment is in peaking power plants. And considering that the best spots for hydro are already well exploited, it means fossil fuel. Natural gas is the best but newer coal plants, like the one they are building in Germany can do that to some extent.

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