The market in power should only exist to optimise. Its become a rei-ified good in its own right, and is being gamed by bad faith actors with stranded assets (coal, oil) to make a point about green power and capital investment money they want.
It's possible no power network could have avoided some of this, but its patently obvious a regulated power utility function needs investment, and the market is not the best model to get it: its the one federal and texan politicians wanted.
A public utility model is not perfect. I argue it would have been better than this, and identified the capex required for systems resiliency before this crisis hit.
The energy market is not the solution. The energy market is the problem.
Honestly, I reach a very different conclusion. Comparing ERCOT to other grids (PJM or CALISO), ERCOT system has delivered very low prices and very high levels of renewable penetrations. PJM wastes billions of dollars a year in capacity payments to coal plants for no reason.
What you write, "The market in power should only exist to optimise" well, that is exactly what ERCOT does.
As for the disaster last week, that was a energy system failure as Texas regulations did not require the natural gas infrastructure to be winterized. Climate change creates more extreme weather events (in all directions but on average warmer) so polar air meant there wasn't enough methane ('natural gas') to power the turbines and heat.
So the issue is the winterization standard in the natural gas infrastructure, but nothing about the structure of the electrical market.
Certainly we need stronger resiliency standards! Events people once thought occurred "1-in-100 years" are actually like "1-in-5 years" in their frequency. And this will only get worse. But that's not a market structure issue it's a standards issue.
The only way to exclude the market from the equation is for the state to have total control over the entire energy pipeline, from pulling natural gas out of the ground to the power plants to delivery.
You can't simply mandate that energy prices will be a certain amount if the power plants still have to buy natural gas and other power sources from the free market. If you tried, the power plants would simply shut down when it wasn't profitable according to the legislated rate, making the problem even worse.
If you tried to legislate that power plants or energy producers must sell energy at a fixed cost no matter what it costs them to produce and they can't shut down, they have to price that risk into their long-term model. You're now paying more for the same service just to make it worth someone else's while to take the risk.
The energy market at least provides a feedback loop to large, energy-consuming businesses. Large consumers of electricity like manufacturing facilities will simply decide to shut down when energy prices are too to be profitable, and wait for the cost to go down. You don't see this as a homeowner, but there are industries that adjust their schedules around energy pricing.
I could argue that there isn't really a market as the Texas grid is (almost fully) isolated from the rest of USA.
The first change should be a federal law that all electric grids in USA are well connected so there is one big market place and Texas would be able to get electricity from other states.
To avoid such outages in the future, Texas needs to build more nuclear reactors.
No other source of energy is weather-independent, can store fuel supplies for several years on site, is emission free and extremely high capacity factors.
I seems to me that the owners of natural gas fired power plants in Texas are being incentivized to find a way to store a few days of natural gas on site, and winterizing that storage, so they can win the lottery the next time things freeze over.
[edit - back of the napkin math]
Extrapolating from https://www.eia.gov/tools/faqs/faq.php?id=667&t=3 it looks to me like it takes about 8 ft^3 of natural gas for 1 kwh of electricity. So, to run a 1 GW plant for 24 hours would take 192,000,000 square feet... a cube about 575 feet on each side. That's a huge tank farm.
Reading about natural gas, it sounds like storage in underground natural geological pockets is common. And also in tanks, but liquified/LNG which is 600x more dense.
As for coal, it sounds like they already typically receive coal in 120 train car shipments daily which is close to your 12000 ton figure. I imagine keeping lots of spare train cars around isn't a big engineering task.
As someone who just went 6/7 days the past week without power, I'd love to incentivize them via rigorous government regulations requiring winterizing. Just to be sure they're properly incentivized.
I was not sure I was reading the map correctly, but it is true. If you rushed to get a power plant online because they were begging for power and offering $9k/MWhr, they are now charging you $30.
http://www.ercot.com/content/cdr/html/20210220_real_time_spp
You can see the massive excess capacity which is why pricing has gone negative now, total opposite of earlier in the week, grid may fail now from overload instead of brown out.
> 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.
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.
Access Denied
Error 16
www.ercot.com
2021-02-21 13:10:47 UTC
If you believe you have a valid business reason for accessing ERCOT resources, please contact the ERCOT HelpDesk at 512-248-6800 or 1-866-870-8124 (USA) or [email protected].
If large negative-price swings, on account of higher power variability, become commonplace it could very elegantly pay for storage. It would also let storage be compared, apples to apples, dollar to dollar, with base load power supplies.
strangely every time i have tried to access the ercot site i keep get an "access denied" error. i wonder if it is because it thinks i am in europe, or maybe some other reason.
I've noticed that happen when browsing from outside the US on many sites recently, including Ercot. Extremely annoying. It's companies paying for Imperva's web firewall ("Cloud Application Security") that just blocks IPs based on country for no reason.
My understanding is that electrical markets are physical markets in that you literally have to either provide capacity (electricity) or take delivery (use the electricity) to participate. And you need a utility level power meter (for buyers/users) or to pass a detailed interconnection queues (for sellers/providers) to participate.
The reason prices go negative is federal production tax credits incentivizes wind power producers to be able to bid a negative price and still make money. Said differently, the negative price in the market is outweighed by the positive revenue from the production tax credit.
Am I missing something here about the structure of the 15-min real time power market? I'm asking as I'm genuinely trying to learn more about this stuff.
This link is specifically for real-time market pricing. This is a marginal rate.
Presumably, power companies locked in their pricing using the day-ahead rates yesterday according to their forecasts and risk models. Now there is a surplus of energy production, and it actually makes sense to pay companies to take that electricity out of the grid.
You can see the current day-ahead rates by selecting DAM-SPP from the Select Data dropdown at the bottom.
The negative marginal rates is an interesting phenomenon, of course, but the real-time marginal rates alone don't show the whole picture.
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2021-02-21 14:25:55 UTC
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at 512-248-6800 or 1-866-870-8124 (USA) or
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My understanding is that this was largely deliberate on the part of the state of TX to minimize the impact of federal energy regulations on the TX grid.
The idea being that the federal regulations devise their authority from the regulation of interstate commerce via the commerce clause, but if TX chooses not to participate in interstate commerce, the federal regulations don't have authority to apply to TX.
Not that I know of, but my understanding is that electricity is basically back for everyone, except for some isolated cases where the transmission lines are still being repaired.
can someone give me free money like the ones during the recent oil tanker thing? i was late to the party (timezone thing) and missed out on a lot of cash, darn you physical time barriers
I’ll point out that it’s already 50 degrees in Austin today with a projected high of 70. Plus it’s a Sunday, so many businesses are closed. Plus we just had a freak storm that required a lot of 24/7 industrial operations to shut down, and they likely haven’t powered back up yet since the roads were still icy as recently as yesterday.
TLDR; demand is now very low, and since the electrical supply has to be matched very closely to demand, this is how ERCOT tells plants that can shut off easily to shut off.
[+] [-] ggm|5 years ago|reply
It's possible no power network could have avoided some of this, but its patently obvious a regulated power utility function needs investment, and the market is not the best model to get it: its the one federal and texan politicians wanted.
A public utility model is not perfect. I argue it would have been better than this, and identified the capex required for systems resiliency before this crisis hit.
The energy market is not the solution. The energy market is the problem.
[+] [-] mrDmrTmrJ|5 years ago|reply
What you write, "The market in power should only exist to optimise" well, that is exactly what ERCOT does.
As for the disaster last week, that was a energy system failure as Texas regulations did not require the natural gas infrastructure to be winterized. Climate change creates more extreme weather events (in all directions but on average warmer) so polar air meant there wasn't enough methane ('natural gas') to power the turbines and heat.
So the issue is the winterization standard in the natural gas infrastructure, but nothing about the structure of the electrical market.
Certainly we need stronger resiliency standards! Events people once thought occurred "1-in-100 years" are actually like "1-in-5 years" in their frequency. And this will only get worse. But that's not a market structure issue it's a standards issue.
[+] [-] PragmaticPulp|5 years ago|reply
You can't simply mandate that energy prices will be a certain amount if the power plants still have to buy natural gas and other power sources from the free market. If you tried, the power plants would simply shut down when it wasn't profitable according to the legislated rate, making the problem even worse.
If you tried to legislate that power plants or energy producers must sell energy at a fixed cost no matter what it costs them to produce and they can't shut down, they have to price that risk into their long-term model. You're now paying more for the same service just to make it worth someone else's while to take the risk.
The energy market at least provides a feedback loop to large, energy-consuming businesses. Large consumers of electricity like manufacturing facilities will simply decide to shut down when energy prices are too to be profitable, and wait for the cost to go down. You don't see this as a homeowner, but there are industries that adjust their schedules around energy pricing.
[+] [-] silvestrov|5 years ago|reply
The first change should be a federal law that all electric grids in USA are well connected so there is one big market place and Texas would be able to get electricity from other states.
https://en.wikipedia.org/wiki/Texas_Interconnection
For a reference: see how many other countries that a 3-million citizens part of Denmark is connected to: https://www.electricitymap.org/zone/DE?page=highscore&solar=... (Needs Chrome/Firefox due to WebGL).
[+] [-] cbmuser|5 years ago|reply
No, unreliable power sources such as wind, solar and gas are the problem.
Except for a short outage due to a sensor failure, the four nuclear reactors have been steadily supplying electricity.
The overall availability of nuclear across the United States is >90%. It’s far more reliable than any other source of electricity.
> https://www.energy.gov/ne/articles/what-generation-capacity
To avoid such outages in the future, Texas needs to build more nuclear reactors.
No other source of energy is weather-independent, can store fuel supplies for several years on site, is emission free and extremely high capacity factors.
[+] [-] mikewarot|5 years ago|reply
[edit - back of the napkin math]
Extrapolating from https://www.eia.gov/tools/faqs/faq.php?id=667&t=3 it looks to me like it takes about 8 ft^3 of natural gas for 1 kwh of electricity. So, to run a 1 GW plant for 24 hours would take 192,000,000 square feet... a cube about 575 feet on each side. That's a huge tank farm.
Coal is about 1 lbs/kwh, according to https://michaelbluejay.com/electricity/fuel.html#:~:text=Nat.... so the 24 Gwh pile would be 24,000,000 pounds, or 12,000 tons. (an 80 foot cube)
This matches up fairly well with https://www.brighthubengineering.com/power-plants/52544-basi...
[+] [-] twistedpair|5 years ago|reply
Isn't that why most gas is stored as LNG?
[+] [-] tyingq|5 years ago|reply
As for coal, it sounds like they already typically receive coal in 120 train car shipments daily which is close to your 12000 ton figure. I imagine keeping lots of spare train cars around isn't a big engineering task.
[+] [-] pjc50|5 years ago|reply
[+] [-] wavefunction|5 years ago|reply
[+] [-] guywhocodes|5 years ago|reply
[+] [-] asmithmd1|5 years ago|reply
[+] [-] spacemanmatt|5 years ago|reply
[+] [-] bretpiatt|5 years ago|reply
Here's overall grid conditions in real-time http://www.ercot.com/content/cdr/html/real_time_system_condi...
You can see the massive excess capacity which is why pricing has gone negative now, total opposite of earlier in the week, grid may fail now from overload instead of brown out.
[+] [-] lostlogin|5 years ago|reply
[+] [-] jetrink|5 years ago|reply
> 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...
[+] [-] asmithmd1|5 years ago|reply
[+] [-] selestify|5 years ago|reply
[+] [-] baybal2|5 years ago|reply
If you believe you have a valid business reason for accessing ERCOT resources, please contact the ERCOT HelpDesk at 512-248-6800 or 1-866-870-8124 (USA) or [email protected].
Imperva
[+] [-] baybal2|5 years ago|reply
[+] [-] JumpCrisscross|5 years ago|reply
If large negative-price swings, on account of higher power variability, become commonplace it could very elegantly pay for storage. It would also let storage be compared, apples to apples, dollar to dollar, with base load power supplies.
[+] [-] m463|5 years ago|reply
[+] [-] iso1210|5 years ago|reply
[+] [-] Matheus28|5 years ago|reply
[+] [-] LatteLazy|5 years ago|reply
[+] [-] tankenmate|5 years ago|reply
[+] [-] tankenmate|5 years ago|reply
[+] [-] herpderperator|5 years ago|reply
https://www.imperva.com/why-am-i-seeing-this-page/
[+] [-] idlewords|5 years ago|reply
[+] [-] hlieberman|5 years ago|reply
[+] [-] mrDmrTmrJ|5 years ago|reply
My understanding is that electrical markets are physical markets in that you literally have to either provide capacity (electricity) or take delivery (use the electricity) to participate. And you need a utility level power meter (for buyers/users) or to pass a detailed interconnection queues (for sellers/providers) to participate.
The reason prices go negative is federal production tax credits incentivizes wind power producers to be able to bid a negative price and still make money. Said differently, the negative price in the market is outweighed by the positive revenue from the production tax credit.
Am I missing something here about the structure of the 15-min real time power market? I'm asking as I'm genuinely trying to learn more about this stuff.
[+] [-] cosmolev|5 years ago|reply
[+] [-] PragmaticPulp|5 years ago|reply
Presumably, power companies locked in their pricing using the day-ahead rates yesterday according to their forecasts and risk models. Now there is a surplus of energy production, and it actually makes sense to pay companies to take that electricity out of the grid.
You can see the current day-ahead rates by selecting DAM-SPP from the Select Data dropdown at the bottom.
The negative marginal rates is an interesting phenomenon, of course, but the real-time marginal rates alone don't show the whole picture.
[+] [-] rocky1138|5 years ago|reply
If you believe you have a valid business reason for accessing ERCOT resources, please contact the ERCOT HelpDesk at 512-248-6800 or 1-866-870-8124 (USA) or [email protected].
Please provide the HelpDesk with the information supplied below.
Your IP: x.x.x.41
Error code: 29 SSL is not supported
What happened? SSL is not supported Your IP: x x.x.41 Proxy IP: x.x.x.144 (ID 101293-100) Incident ID: 1293000130192584352-408476159010734922
[+] [-] remoquete|5 years ago|reply
[+] [-] happyconcepts|5 years ago|reply
[+] [-] aaur0|5 years ago|reply
[+] [-] ncallaway|5 years ago|reply
https://www.king5.com/mobile/article/news/verify/texas-indep...
My understanding is that this was largely deliberate on the part of the state of TX to minimize the impact of federal energy regulations on the TX grid.
The idea being that the federal regulations devise their authority from the regulation of interstate commerce via the commerce clause, but if TX chooses not to participate in interstate commerce, the federal regulations don't have authority to apply to TX.
[+] [-] visarga|5 years ago|reply
[+] [-] burlesona|5 years ago|reply
[+] [-] 2Gkashmiri|5 years ago|reply
[+] [-] burlesona|5 years ago|reply
TLDR; demand is now very low, and since the electrical supply has to be matched very closely to demand, this is how ERCOT tells plants that can shut off easily to shut off.
[+] [-] haunter|5 years ago|reply
>This request was blocked by the security rules
GDPR?
[+] [-] iso1210|5 years ago|reply
[+] [-] cbg0|5 years ago|reply