Comment by Mvandenbergh | Hacker News Reader

Comment by Mvandenbergh | Hacker News Reader

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I know how re-dispatch works.

The issue is that the physical reality of the network and the location of generators and loads is fixed at time of [re-]dispatch. Regardless of how you reconfigure the dispatch mechanism, there is energy that cannot be moved through the network from the wind in the North to the load centres in the South. The only way to avoid that physical reality is to either massively increase the N-S transmission capacity or to put generation capacity closer to load.

Once these generators have been placed where they are and pending extremely challenging network expansion being realised, it will always be the case that some party or set of parties bears the cost of the constraint.

If you moved the ownership and control of the transmission network and all generators into a single operator that was responsible for optimising its operation in near-real-time and that bore all the costs within a single accounting perimeter, it would do more or less what the the existing market based mechanism does: turn off the wind generators and instruct the thermal plants in the South to run instead.

Yes, it's true that in that case there would not be a "market price" paid to wind turbines that actually cannot run, nor would there be a higher re-dispatch price paid to the thermal generator. However the total system cost would still be the same. Even though the wind turbines would "lose" money because they can't run and the thermal plant wouldn't receive its market price for relieving the congestion.

Of course you could argue that this efficient single operator simply wouldn't have built the wind assets in the first place in a location where they often couldn't run but that assumes that the same policy makers who created the current outcome wouldn't have engineered the exact same outcome through the direct control they presumably would have had of the integrated operator. I will note that many American utilities actually are vertically integrated like this (banned in the EU under the Third Energy Package) and they build in the exact same pattern and bear the constraint costs internally.

> If you moved the ownership and control of the transmission network and all generators into a single operator that was responsible for optimising its operation in near-real-time and that bore all the costs within a single accounting perimeter, it would do more or less what the the existing market based mechanism does: turn off the wind generators and instruct the thermal plants in the South to run instead.

But it wouldn't count a profit in the North and build yet another pointless wind turbine in the North. Whereas the current system, because it pays the Northern producer the market rate, for electricity that isn't needed, shape the grid in a nonsensical way! That's the core of the criticism.

> Of course you could argue that this efficient single operator simply wouldn't have built the wind assets in the first place in a location where they often couldn't run but that assumes that the same policy makers who created the current outcome wouldn't have engineered the exact same outcome through the direct control they presumably would have had of the integrated operator.

There's literally no reason to assume they would have done the same choice given they would have responded to completely different incentives (minimizing the total cost, instead of individual actors maximizing their profit under the artificial price scheme).

My reason for assuming that they would have made the same choices or in any case a broadly equivalent one is the fact that the BNetzA, the BMWE, and political stakeholders knew from the beginning of the renewable buildout that the combination of current grid connection arrangements, network tariffs, energy markets, and subsidies would lead to this situation and they went ahead anyway. [The BNetzA regulates the networks and the BMWE is the relevant ministry in the German context]

They did so for political and ideological reasons that I think are pretty clear to anyone who follows European politics.

Had those same political stakeholders had more direct executive control of a single national electricity system, they would have done the same thing and for the same reasons.

Yes, of course a vertically integrated system optimising for efficiency would never have made these choices but the same political decision makers who shut down Germany's nuclear fleet would never have permitted such an integrated system to operate in such an efficient way if it meant not building wind assets.

We can see the impact of a different political direction in the French electricity system, which despite being structurally similar to the decision making of the German system is in practice much more centrally directed and which despite absurd attempts to sabotage it from within France and within the EC continues to operate in a much more optimal way.

It doesn't do this through formal centralisation and integration but by the careful design of grid codes and subsidy regimes to avoid these absurdities.

Gosh, what kind of conspiracy theory is that?!

The “copper plate” rule appeared in 1998, long before the phaseout of nuclear and the move to wind power. Your argument completely confuses cause and effect: the reason why wind was pursued was because the market model made it look like it was the most economically efficient.

Thinking that someone made a plot to favor wind against more than a decade in advance by designing the market this way is laughable.

And by the way, I'm French and your point about my country couldn't be more inaccurate: the market rules are equally absurd, if not worse, the only reason the system works the way it does is that EDF is big enough (both in terms of electricity production and economic power) to be able to perform the central damage control. It severely affects their ability to make profits though (which is why the company was pulled back from the stock exchange).

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