Electricity That's Too Cheap to Meter
shkspr.mobi
shkspr.mobi
I wonder if we will find another such situation in a future where there might be an abundance of electrical energy due to renewables.
Perhaps there's another research area that just isn't worth pursuing unless electricity has a zero or negative cost.
Bitcoin, the world’s largest cryptocurrency, currently consumes an estimated 150 terawatt-hours of electricity annually — more than the entire country of Argentina, population 45 million: https://news.climate.columbia.edu/2022/05/04/cryptocurrency-...
More likely the sink will be - as it already is in commercial steel projects like Hybrit - electrolysis.
Texas Paid a Bitcoin Miner $31.7 Million to Use Less Electricity During the State’s Hottest Month: https://www.texasmonthly.com/news-politics/texas-bitcoin-min...
Of course such a thing hasn't been done on a industrial scale, but it's a great way to save the energy for later or transport it to another region.
One of my favourite reads [1]. (Darker if similarly-fascinating thread [2].)
[1] https://acoup.blog/2022/08/26/collections-why-no-roman-indus...
[2] https://acoup.blog/2020/03/20/collections-why-dont-we-use-ch...
In his models, you over-provision PV and wind (doable because it is so cheap, and getting cheaper) so it can cover peak loads. Then during the 90+ percent of non-peak time there is super-cheap excess power available which he dubs “super power”.
Using pricing signals, this can be used to enable activities which would normally be cost-prohibitive under current models. When power is cheap, crank up the desalinators, electric steel and aluminum mills, pumped storage, hydrogen converters, bitcoin miners, and anything else smart people can devise to do with inexhaustible, inexpensive clean power on a somewhat intermittent basis.
His model also shows that you can choose trade offs between how much battery you invest in and how much generation you build, allowing you to optimize costs depending on how much or little of this “super power” you want to generate. More batteries = less generation and less excess power, and vice versa.
I think many find this unintuitive because they formed their opinions of renewable energy during the early, high cost parts of its ramp and have not adjusted their thinking to the current part of the S-curve.
But renewable energy is already the least expensive source of electricity in most markets. It is our amazing good fortune that it is also environmentally fairly benign, extremely safe, has very low maintenance costs, can be geographically distributed to reduce grid distribution costs, and is able to scale with few limits aside from simple land availability. And its Wright’s law cost declines appear unconstrained for the foreseeable future.
Standard thermal electricity generation is a very mature technology, no matter the heat source. Turbine-based combined cycle natural gas generation was a bit of a step up, but it used already mature tech: jet turbines.
Solar and wind and batteries are fundamentally different, and more like integrated circuit technology or DNA sequencing: falling in cost at a tremendous rate.
Looking at current prices or current installed bases of solar or wind or batteries is not very informative for assessing the technologies. You really need to see the history of prices to project their future, then you need to start seeing that for each application, adoption is non-linear once the tech becomes the cheapest option for that application.
What I'm most surprised about on HN is how few commenters here seem to understand tech curves. The HN audience, of all audiences, should have the clearest view of how traditional energy industry assumptions are about to be disrupted in the coming decades. We don't know the full extent of the disruption, but views like Seba's of huge amounts of surplus energy, seem inevitable. Arbitrage in time and geography will be the money making opportunities.
There is no one here that doubts the renewable future and we‘re quite sure we can finish building the necessary grid until the end of the decade (with around 6 times the capacity of the current European grid).
Otherwise...not so much. All the electrical infrastructure, from the wind turbines to your electrical meter, still has to be planned, built, and maintained. If there's isn't some perpetual* government subsidy involved, then the cost of doing all that still has to be paid from selling the power, and your ability to "play the market" - without sinking a metric buttload of money into energy storage equipment - is gonna be limited. And the more popular such market-playing becomes, the lower the spot price fluctuations will become.
*Yes, I know that "perpetual" never really lasts in this context.
But in a historical lens, that the -UK-, i.e. His Majesty’s Coal Fire, has such abundant wind generation that it can be free every once in a while when The Great Smog was only ~71 years ago is an incredible feat.
MWh-scale quantities of electrical power
But all such cases suffer from the "only if it doesn't get popular" problem.
(I also have solar on the roof and am a net exporter)
And its distributed, no need to add new transmission lines, available to every grid, today.
>> [...] is gonna be limited. And the more popular such [...]
> Yes, EVs [...]
If there there are a zillion EVs, which cleverly charge up when the spot electrical price gets low, then those free-or-negative prices for electricity - which really seem to push people's buttons - will not actually happen.
> No need to build specialized energy storage systems.
I am not aware of either the electrical grid, or most current EV's & their charging hardware, being built to actually do this. A whole lot of specialized stuff will still need to be built.
Its already done, but not yet widely deployed. Virtual Power Plant. Tesla Electric customers report making as much as $150 a day: https://electrek.co/2023/07/05/tesla-electric-customers-repo...
That's desirable, isn't it? You're trying to get to a point where the demand curve matches the supply curve. You want there to an expectation that supply-peak energy is going to be worth something at some point in the future, even if it isn't right now. (Assuming we're doing this in the private sector, of course).
> I am not aware of either the electrical grid, or most current EV's & their charging hardware, being built to actually do this.
I think it's called bidirectional charging.
It's a horribly painful and slow way to die.
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For low power dc loads, running completely separate DC circuits wastes a lot of copper for minimal theoretical benefits.
There ate several other models as well, with lots in experimental stages.
But new cars are sold every day. So you don't need everyone to upgrade their vehicle. Deployment will happen automatically - just like USB-C charging on phones & laptops.
No that's a pipe dream. People are recommended to charge at night, when half of renewable energy is missing by definition (no sun is shining) and want to be charged at the morning, not discharged because there was no wind blowing and we needed to keep lights up in local town.
Never saw this recommendation. Some people do, because they have time of use plans which offer completely free and renewable charging or cheaper[1]. And there is no time restriction on charging, cars are parked 22+ hours a day, you can charge anytime except when you drive.
EVs can charge anytime power is negative or close to zero.
1) Your home charging is 100% free from 7:00 p.m. to 1:00 p.m. and 100% renewable all day, every day: https://www.txu.com/electricity-plans/free-ev-miles/electric...
In reality, the low price is the recommendation. When day time power becomes cheap, that's when people will charge.
The potential for energy arbitrage with Asia is just too great for us to not find a way to achieve it.
No, it didn’t. The grid must always be in balance. Wind power production can’t be ramped up or down as needed. Overproduction could cause a surge on the grid, that would in fact be a massive liability for the power company.
Power became free for those periods because it was the cheapest option for the producer.
Kind of how it happened when crude oil was trading at negative $57 per bbl. The contracts came with an obligation that was impossible to meet, thus it was easier to pay someone to take them off your hands.
In better functioning markets negative prices generally stem from large thermal producers, nuclear and coal, being unable to ramp fast enough and thus bid negative so they can produce at 100% when prices are expected to increase again.
Issue is that they got insane contracts that pay beyond market rates.
I am on the "agile" price, which means that I have a different price per kwh every 30 mins.
Pros: I get negative pricing, ie, they pay me to take away power.
Cons: I can also get "surge" pricing upto to £1 a kwh.
It only really makes sense for me personally because I have both an electric car (second hand) and a house battery (with solar)
about 2-4 times a month, I get paid to charge my car.
edit you can see what my prices are here: https://agileprices.co.uk/?region=C they are published daily at 16:00 for the next day, more or less.
Of course you shouldn't do that, but I wonder how their business model looks like. I assume the negative price comes from subsidies, and those probably are limited?
edit: with "wasting", I mean literal wasting, basically discharging the grid without using the energy for anything (say, by putting a heater outside)
There’s no reason you _shouldn’t_ do the behavior you describe: the more power you can sink during negative pricing, the better the efficiency of the grid! You’d rather any kind of productive use.
This is the boundary of my ignorance, though: I don’t know what the actual equilibrium system dynamics are. But I believe that using the market to induce demand is ~always going to be more (globally) efficient than curtailing generation or providing grid-scale radiators: the economy has almost certainly got a more productive use for marginally cheaper power than simply returning it to heat. In this margin, only the transmission costs matter.
The price is a function of the spot price, so its an indirect function of the way electricity prices are set. As a producer you get a guaranteed minimum price per kwh. some magic of contracts happen and the price paid is not always the price the producer gets.
They are generally unfit for modern grids which require dispatchable energy, and is why "baseload" is an outdated term on the power generation side, while it of course still exists on the consumer side.
If that's not the case, what is the most efficient way to waste energy?
Disclaimer: I don't know anything about the energy grid.
It is far far more common to have wind/solar offering in negative prices as they want to run at any cost to take advantage of the extremely lucrative subsidies. There is limited transmission available, so those various wind farms are competing against each other to just run. Also, you can have negative prices just due to congestion.
That's pretty much what Octopus Agile is designed for. We turn on all the electric heaters on plunge pricing, which is a very welcome addition in a cold house.
Heating up the hot water is a grand way to save money.
"It's cheap except when you use it."
Even PG&E's estimate says stick with flat rate. It's cheaper.
More accurately, charge a higher rate when everyone is using it, and increasing supply would be expensive (roughly late afternoon to early evening in places that use solar PV and air conditioning) so incentivize the shiftable demand (charging EVs for example) to move to low demand and/or high supply times.
Without the A/C running, PG&E rates my home better than "energy efficient" homes. I just don't use much electricity except in summer, and the savings from heat pumps, solar cells and batteries would never pay back.
I suppose that I could afford a vacation at the coast if I just took off and didn't cool the home in the heat. I'll run the numbers.
> I just don't use much electricity except in summer, and the savings from heat pumps, solar cells and batteries would never pay back.
I think it's a little unfair to expect the tech to pay itself off quickly, but it _is_ reasonable to expect the savings to cover the difference between a gas furnace and a heat pump for example.
Fundamentally this can be changed if, and only if, there are higher standards our homes are built to, more cost effective methods of storage, and the vast majority of the solution being automated.
But there will be winners out of users paying the real cost of their energy.
If they succeeded, the demand would increase (by new uses people would find for cheap electricity, and by people who would move into Wyoming to take advantage of the price) which would affect production.
And the State would use it as a source of income, not start giving it for free or at a fixed price.
We can provide everyone with terabit internet without taking up more than a tiny amount of surface space, so inducing demand on that front isn't a problem.
And I think road network improvements are actually quite good at achieving their throughput related goals. From that perspective, there isn't actually a problem at all.
Internet traffic absolutely "suffers" from induced demand. It just happens that we've been able to keep ahead of the worst of the congestion problems.
a) ISPs traffic shape. ISPs have more control over their traffic than cities/highways typically do.
b) ISPs don't guarantee minimal speeds, or even give you a sense of their distribution. The inability to provide a minimal tells you that probably at peak traffic, there is significant contention (induced demand has kicked in). It just happens that... internet usage demand is probably less coupled than traffic on a highway.
c) The largest traffic loads on the internet (streaming video) are majority provided by centralized corporations that can provide a 'parallel' service (through CDNs/edge caches... oh and I guess really degrading video quality) that minimize the load onto the 'main internet'. This is like taking the train or public transit or something.
One can write a nifty article by assuming that huge geothermal power plants are somehow free. Similar for assuming that FTL drives are easy to build, or ...
Correct.
Advanced geothermal and thermal batteries will be a large part of the solution. Those nascent markets today are where PV and Li-ion were in the 2000s: proven technologies that have climbed onto the cost-learning curve ladder, now just need capital and time.
We're so close to having all the necessary solutions we need to achieve net zero, and then push forward to net negative (to get CO2 back down to 350ppm).
Lets see you provide jobs in factories which depend on renewable energy.
Yup. Even the jobs that will be created by switching to renewable industry depend on products and materials created by Chinese heavy industry that cannot depend on renewable energy.
The wishful fancy self-congratulatory thinking of Westerners on renewable energy knows no bounds.
I see what you did there.
Oh and there's a nuc plant I'm in meltdown range of, but don't get any pricing benefit
[1] https://www.construction-physics.com/p/why-are-nuclear-power...
Power is cheaper to store than people think.
Nuclear power is worse on all dimensions than people think.
We get it in the form of gas peakers. So does France, when it's nuclear power stations aren't matching demand.
>nuclear power is great because the materials are cheap and abundant
It is by far the most expensive form of power humanity produces, nearly all due to capital costs. Its main benefit is that it shares some of the costs of building nukes and preparing for nuke readiness - this being why Iran, Sweden and South Korea build them and why the US military industrial complex keeps trying to greenwash it.
One thing the nuclear-military industrial complex hasn't pointed out is that the materials are very Russia dependent. Gas from Russia = bad. Uranium? Peachy. It is cheap though.
>the power is very stable.
Not worth 5x the cost to have a steady 1GW output when you can pair something 1/5th of the cost with some pumped storage.
>Even the disposal is much safer
If you do it safely it's much more expensive than people think.
The operation of nuclear power plants isn't particularly safe though, which is why the private sector point blank refuses to insure against a Fukushima type event. This is why the government says don't worry if that happens, joe taxpayer will foot the $1 trillion bill. You. Me.
>How do you store power cheaply?
Gas turbines fit this scenario much better, you turn them on when wind and solar is down. The same with batteries. Batteries aren't in the news much, but there are quite some huge batteries online already, and that might pay off for the owner (buy low, sell high).
It has solar panels, batteries, and a gas generator.
Last year, I used the generator one time, for four hours. So, with a half gallon of gasoline, I ran a 1000sq ft home for 365 days.
We can build a grid, today, the same way. It will produce 95-98% less CO2 (depending on which papers you read), while keeping enough gas capacity as backup for those few hours or days, just like my cabin.
While we work towards 80-90% clean capacity, we commercialize the tech to replace the gas.
That's actually a symptom of the current issues with renewables: production is highly variable and unpredictable (to an extent) and cannot be controlled, and electricity produced cannot be stored.
Interestingly, if electricity indeed becomes too cheap to meter then why bother with heat pumps, etc. at home? It is much easier and cheaper to just install an electric boiler and electric heaters.
Despite intense lobbying against them pumped storage plants like coire glas and snowy 2 are under construction.
Regarding your last point, we should not sacrifice efficiency when we still need incredible amounts of power to sequester excessive atmospheric CO2 with carbon capture (paying back the energy debt), and HVAC system lives are measured in decades. As the post mentions, a component of the story is energy efficiency, and we shouldn’t throw that away going forward.
I don't think this will happen anytime soon, though. Renewables are still expensive and in many cases rely on price guarantees by the government, and we're still in a phase when production has to increase significantly to keep up with demand. So overall the market reality and incentive is to push for efficiency while prices remain relatively high (at least in the UK)
> why bother with heat pumps
Unless you say "install a heat pump" then heatpumps are reasonably cheap. If you want non super thin radiators, then some domestic aircon is not actually that much more expensive than electric.
Heat pumps could save money in new construction by reducing the amount of copper, too. Builders will be all over that if it becomes acceptable.
I think we’ll find that there are other benefits that come with new technology beyond the direct electricity consumption.
Worst cases, though, if all the electricity is produced in clean methods, how much does it matter that we’re not using it as efficiently as we could be?
My point is that if electricity is effectively free then there is no incentive to invest in energy saving. The same goes for any resources. In any case, I don't think it is a realistic prospect to expect electricity to become effectively free at least in the medium term.
in one place. Once. And the author is making it sounds like it's valid everywhere. Well, no.
https://ourworldindata.org/grapher/solar-energy-consumption?...
We are in the middle of an energy technological leap. It'll take a decade to unfurl, but it's nothing short of astounding.
If prices become negative on average, then there is no financial incentive for anyone to build a new power plant. Except if that plant can follow the load and generate only during the times when the prices are positive, and are above its breakeven generation cost. Natural gas power plants fall in that category. Battery storage too, twice better actually, as they can charge when prices are low or even negative, and discharge when prices are high.
One could claim that solar plus batteries is fine. Except that whoever plans to build solar plus batteries can quickly figure out that the ROI is even better if they do battery only and no solar at all. The same goes for wind.
The Economist ran a fairly informative article about this in September [1].
[1] https://www.economist.com/finance-and-economics/2023/09/21/r...
1. Negative/low/volatile prices => Storage is worth constructing to arbitrage the price rather than new generation.
2. Prices smooth out.
3. More power generation get built to take advantage of smoothed out prices.
4. And the cycle repeats.
Looking at the market as frozen in time will never match reality.
It’s partially a useful thing - large generators paying to avoid stopping - but largely it’s because peoples rooftop solar doesn’t curtail and so produce huge surpluses that someone needs to take. We saw this over and over in several of the markets we trade in last spring.
Right now, negative prices shut down production, wasting all the free production, called curtailment. Instead, EV owners can charge and be paid for charging. In fact, EV owners can get paid twice, once for charging and again for supplying power back to the grid as part of a virtual power plant. In a pilot this year, participants in VPP with their powerwalls made $150/day. It is entirely possible to do this with EVs.
And, very few needs 100% charge/range. 52% of all trips, including all modes of transportation, were less than three miles, with 28% of trips less than one mile. Just 2% of all trips were greater than 50 miles.[3]. You can set a range, keep my car charged between 60 - 90% at all times, give me money both for charging and supplying power back to the grid! I'm sure there will be some people who'd be interested in free money.
[1]https://electrek.co/2023/07/05/tesla-electric-customers-repo...
[2]Wholesale prices went negative about 200 million times across the seven US grids in 2021, more than twice as often as five years earlier: https://www.bloomberg.com/news/articles/2022-08-30/trapped-r...
Given 31,536,000 seconds in a year, a more descriptive aggregate statistic might be how much of total capacity was at a negative billing rate.
We’ve already gotten to the point where over-construction of renewables and energy storage to scale to peak seasonal demand is the cheapest way to get energy. The only barrier to get there now is we don’t have the production capacity to transition faster.
It’s now basically inevitable that renewables will result in energy too cheap to meter most parts of the year in most places. It’s just a matter of time to build it.
Check Tony Sebas recent presentation on The Great Transformation. If you want more practical/empirical details you can check Mark Z Jacobsens studies.
It’s kind of funny that people are now saying that solar is “only” providing 10% of electricity or whatever it may be in a given region. Just a decade or two ago people like Tony Seba was thought to be crazy for predicting that solar would reach this point this fast.
Look at any instance of technology transitions “logistics curves” (“S-curve”). When you get to past the 10% point the new technologies take over incredibly quickly.
London, where I live, has about 9 million people. So I suppose it also applied to them as well.
And, I also pointed to a chart of the UK's energy mix. That was supposed to indicate that my blog post was about the UK.
As others have pointed out, these <= £0 prices happen fairly frequently.