Comment by jetrink | Hacker News Reader

Comment by jetrink | Hacker News Reader

Context:

> For wind developers, federal tax credits also are a contributing factor, even allowing the wind resources to make offers at negative prices. However, low and/or negative offers are not limited to any particular resource, and it is not uncommon for thermal generators to submit negative prices to decrease their chances of being dispatched below their desired or capable levels.

> ...

> Market prices tend to go negative when there is low consumer demand and the thermal generators that have chosen to remain online cannot be backed down further to allow the available, lower-cost wind generation to serve consumer demand. In situations like this, some wind generators will be curtailed to balance generation with load. In these cases, since wind is the marginal generation, it sets the market price, which may be low or negative.In 2019, system-wide negative pricing occurred for 58.5hours, or less than one percent of the year.

http://www.ercot.com/content/wcm/lists/200196/Wind_One_Pager...

If your job is to establish a stable market between producers and consumers, and the market price you set swings positive and negative, through 6 orders of magnitude in just 72 hour...you are not doing a good job.

...or, hear me out, this system is far more complex than an armchair specialist from HN can understand from reading a couple of headlines, and the actual experts in this subject matter are doing everything in their power to make the system work as best as they can, balancing a zillion opposing forces.

Hmmm... It's almost like solving massive-scale real-life problems is harder than hacking some code together based off medium tutorials

That's a lesson many CS or maybe even all STEM grads have to learn at some point. Especially politics is more complicated than any code you can design.

There is quite a bit of elitism when programmers talk about real-life events but admittedly less here on HN than in many other forums.

Ah yes, the appeal to authority argument. I can’t have anything valuable to say because I am not an authority.

I am sure running a power grid with thousands of producers and millions of consumers is incredibly complex. Did you know every wind turbine and generator is spinning exactly in sync across the whole grid. I am amazed that it works.

What obviously does not work is the libertarian fantasy of live market pricing for turning generators on and off. What are the chances of rolling blackouts on Monday as oil cracking plants come online to take advantage of free power?

> libertarian fantasy

So what do you recommend? Mandatory lights/heaters/AC on/off times, so the power produced is actually used, and the power needed is actually produced?

The british have the problem that during a football game half-time, a bunch of people start their tea kettles at the same time, and there is a relatively huge spike in electricity usage... this means, that the electricity providers have to plan for this and import electricity and/or shut down other cunsumers for those 15 minutes. Now imagine an unplanned half-time, without the time to prepare, and a magnitude higher changes, that happen suddenly (eg, three/ice brings down cables)... there's no way to predict everything and deal with every problem.

What variable pricing does is, that it gives incentive to consumers to use electricity when it's cheaper and not use it when it's more expensive. For homes that means washing clothes in the evenings and on sundays (cheper electricity here then) and not during peak usage hours, and for industry that means shutting down the highest consumers when there is not enough power available, and having them use up extra power when needed.

The British have a plan for this and many other things on the National Grid. For decades they have used pumped hydro to manage this. Paired with a TV in the control room showing Eastenders or the football as appropriate.

That's why the UK has external sources - both inteconnects with other grids, and stored power - that can be brought up in seconds.

My understanding is Texas doesn't even have connections to other grids?

Historically the UK had "economy 7" usage, where domestic electricity was cheaper at night. It's not convenient, it stems back from the end of the socialist era of the 70s where individuals took a backseat to the good of society. Most users only use it to boil a hot-water tank and 'night storage' heaters.

It's a shoddy solution for a problem that shouldn't exist in an advanced economy.

Texas has DC ties to other grids, much like the UK does. The UK also has its own independent grid that isn't synchronized with anyone else, much like Texas (though smaller-scale because UK industry is basically dead and we generally use gas for heating).

In which case they can export electricity at a very low cost. Or are the interconnects full? And all the energy storage facilities full?

Perhaps related: https://xkcd.com/277/

The system is complex because Texas designed it that way. This is in no way a technical problem, is it a political problem.

Just because something is complex, it doesn't mean there is no one with the required expertise. Texas chose Ayn Rand levels of deregulation with its energy market, and it will keep struggling with black swan events since those are the types which the private industry tends to chronically underinvest for, since they are the easiest to cut and turn into profit.

When the solution leads to deaths... It is fairly easy to side on the "it was done wrong" side.

Is it complicated? Of course. But evidence is pretty damning in this event.

It makes perfect sense. When there was not enough power, because generation was frozen, electricity was in demand. Now that those power plants are unfrozen and there is enough power, over-generation is a liability.

The real question is does the spot price being able to go to $9,000 produce a useful market signal? Or is it just a pointless hazard to ensnare the unprepared? Normally this kind of question doesn't make sense because if there are still transactions at a high clearing price someone has decided they're getting $9k of utility. But in this case the market is a post facto settlement system decoupled from most usage, rather than something built on deliberate transactions.

Also, does anyone know who ends up paying for energy usage that cannot be attributed to any specific customer? Like if someone jumps their meter while the spot price is at $9/kWh, does the local transmission company just end up eating that or what?

The PJM market also operates capacity markets, where energy produces are paid for being available to produce energy when called upon. This would be one way to pay people to at least think about reliability, in that they are explicitly getting paid for it.

However, I believe that in the last polar vortex incident, something like 20% of people paid on the capacity market failed to be available. Unless there are steep penalties built into these contracts for failure to produce when needed, there still might not be proper incentive to perform proper design and maintenance.

As we go forward, it will be interesting to see which incidents fall under force majeure, and which incidents result in actually breaking contracts.

This particular incident was foreseen: the 2011 FERC report on smaller similar outages in ERCOT recommended fixes to prevent this. And I know of at least one energy expert who was tweeting days before this happened that he hoped Texas had fixed their problems that were identified in 2011.

Personally, I favor regulating the ever living hell out of it, and having the state force carbon free electricity by 2035. I think that's the only way we will see movement towards more reliability and less carbon: guarantee that there's a market for such products.

>The real question is does the spot price being able to go to $9,000 produce a useful market signal?

If electricity was like gas the pump would refuse to operate since your wallet is too light.

I live in rural Texas. Tuesday it was 10-20 degrees here, today was high 60s, tomorrow will be 70s. Thursday I was wondering where to evacuate to if I ran out of propane, today I turned off the furnace because it was too hot in the house.

To think this would not have an effect on energy demand, and thus price, is delusional.

Why is there low demand right now? It’s still pretty cold in Texas.

It has warmed up a lot. It’s 50 degrees in Austin right now. On Monday it was 9. Yesterday it was 20 something in the morning.

It's sunny and 72F in Dallas today, up 74 degrees since Tuesday. That kind of swing is not unusual although the magnitude obviously is.

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